Contingency Plan

Abstract

When developing a strategic plan it is important to implement the plan effectively. An important component of this would be a contingency plan. Contingency plans are optional but very effective when used in an effort to manage and address issues that might arise.

Contingency plans: Needed or not

When developing a strategic plan, organizations may want to develop alternative strategies as a way to accommodate unexpected events such as economic recessions or natural disasters. The main purpose of a contingency plan provides a strategy for lessening the effects of these unexpected circumstances (Jeanty, 2012). Contingency plans increase the chances that a business' main operations will be able to continue without major losses or damages.

Contingency plans cannot predict future events and what will come from these events but by developing possible scenarios, plans of action can be developed that will provide possible solutions for different circumstances. The organization will develop different scenarios that will address each of these possible challenges and ways to overcome these challenges.

A contingency plan can be used any time during the implementation of a strategic plan. It aids in implementing alternative actions when the current plan of action fails for any reason. A successful contingency plan has a seven-step process (Swayne, Duncan & Ginter, 2006):

1. Identify both desirable and undesirable events that can cause problems within their strategic plan.

2. Identify any issues that might arise that will need a contingency plan and predict when they might occur.

3. Possible benefits and disadvantages of each occurrence.

4. Develop a contingency plan ensuring that it is possible with current strategies and is economically useable.

5. Decide whether the effects of the contingency plan will counteract the potential obstacles.

6. Identify the warning signs that will identify these possible quick responses to these warning signs.

7. Prepare action plans that will provide quick responses to these warning signs.

If all these steps are followed than the organization will be ready for whatever may come their way.

Let's take a surgical center that has just made their 5 year strategic plan. They want to develop a contingency plans so that they will be ready for whatever my come its way. They have already identified losing their main supplier of surgical equipment as their biggest problem. If they lose their main supplier of equipment they will