The Impact of a Crisis or Disaster on Corporate Organisations in the Digital Era: A Better Management of Crises and Disasters

2020 dissertation for MSc. Crises, disasters, accidents, catastrophes, and emergencies are part of experiences of life, and overcoming and managing the negative effects of such occurrences are important to overall human development. Businesses, irrespective of size, sector and the environment they operate in, are faced with potential risks of serious incidents or occurrences that may develop in the process of carrying out their day-to-day operations.
Continued success in today’s business environment can only be assured when organisations develop strategies to prevent and mitigate against potential crisis or disaster and avoid or cope with the reputational damage that may result from its improper handling.
A 2013 study by the international law firm, Freshfields Bruckhaus Deringer on Crisis Management outlined four major areas where a crisis may develop, as operational, behavioural, corporate, and informational. Business organisations must therefore develop strategies to adequately prevent or tackle the different types of crisis to ensure business continuity and maintain their competitive advantage in the global market.
This paper examines and discusses the current approaches to crisis and disaster prevention and management by internationally listed business corporations. The negative impact of any disaster or crisis on the overall business performance of different organisations in the aftermath of a crisis is examined. Data for the study comprised actual incidents in some selected global business organisations and brands that have a worldwide market representation or appeal; and are listed on at least one major international stock exchange. A longitudinal study of a sample of disasters and crises using the framework of the indicators developed in the 2013 Freshfield survey together with a cross-sectional study to ascertain what new threats have emerged in view of continuous developments in IT, AI, cloud computing, cyberattacks and loss of data. The study discussed the level of disruption and trauma faced by those impacted by a crisis or disaster and the long and shortterm impact of a crisis on stock prices of international businesses.