Firms must keep plans in place: analyst

According to an article titled “Managing in Times of Political Disruption” by Dr Sahanon Tungbenchasirikul, an associate director for business development at the firm, it appears that disruptions caused by political protest has become a new norm in a number of nations worldwide. 

The “Bangkok shutdown” campaign initiated on January 13 has, to some degree or other, affected almost every business in the capital. Even today it is hard to predict when this conflict will be resolved. If it is prolonged and, in the worst case, triggers violence, businesses in Thailand will inevitably face difficulty in protecting their assets and their shareholders. 

It is clear that the current Thai political disruption is having impacts on a wide range of businesses, from logistics and supply-chain interruptions, to revenue slowdowns, and even temporary shutdowns of the businesses themselves. In addition, Japanese investors are worried that if the situation drags on, it will erode confidence and delay new investment. 

However, those companies with well-established business-continuity practices are in the best position to mitigate the impacts of political disruptions on their operations, and to exploit opportunities from the unpredictable future. In short, the ability quickly to respond to and recover from the current chaos is now a key to business success.

In this respect, businesses must identify what they should do in both the near and long terms in response to political disruptions (as well as other severe crises), and have both BCM and BCPs in place. 

To implement business-continuity measures effectively and on a timely basis, senior management must play a leading role to deal with a given crisis situation and fully commit to providing necessary resources to protect their shareholders’ interests. As the current protests have been taking place in several discrete key locations, organisations can selectively adopt short-term BCM/BCP initiatives best suited to their business, for example as follows:

_ Human capital management: to maintain the minimum workforce necessary for pursuing business operations with customers. 

_ Cash and liquidity management: to ensure access to adequate financial support sources and sufficient levels of funds to maintain necessary operations. 

_ Price reduction/adjustment: especially for hotel and accommodation service providers, to minimise customer attrition rates and sharp falls in revenue.

_ Reduce operational costs: by adopting flexible policies and as much as possible maintaining normal business operations with customers (for example, work from home, electronic meetings). 

_ Business interruption claims (BIC): companies should check whether their insurance policies cover business opportunity loss and how to complete the claim process, which may be unlike the flood-crisis claims in 2011.

_ Sales and operation planning: must be adjusted and kept up to date in response to crisis scenario changes. 

_ Managing a profit downgrade: to retain shareholders’ confidence the management team must assesses the impacts of the political crisis on profitability.

If the political disruption continues into the second quarter, organisations should implement long-term BCM/BCP initiatives to establish new business architecture more suitable to the unusual circumstances. 

In summary, senior management’s attention must be dedicated to implementing both short- and long-term BCM/BCP initiatives that drive shareholder value (revenue, costs, asset efficiency and stakeholder expectations) amid the current political chaos in Thailand. These initiatives will help them prioritise efforts and focus resources on  areas that matter the most.