Page 196 - Introduction to Business

170 PART 2 Managing Business Behavior

sure that excellent lines of communication had been established between the
company’s researchers and its marketing team. Pfizer’s marketers were quickly
made aware of a possible new blockbuster drug for the company. Today, Viagra is
one of Pfizer’s best-selling products.

CONTINGENCY AND CRISIS PLANNING. For better or worse, today’s business world is
not always very stable. More simply put, things change. Oil prices change, interest
rates change, world politics change, and companies need to be prepared for such
contingency planning Planning for changes. Contingency planning involves planning for change and trying to identify
change and for business dynamics that in advance important business dynamics that are subject to change.
are subject to change
A number of major companies have formal organizational groups that engage in
contingency planning. Many companies also use computer models and programs to
help them plan for possible changes in their business environment. Royal
Dutch/Shell Group, for example, in 1972 started a formal scenario planning depart-
ment to help it look into and plan for possible changes in the future. The former
head of this department at Royal Dutch/Shell once described his role as “hunting in
a pack of wolves, being the eyes of the pack, and sending signals back to the rest.” 15
One important contingency planning issue currently facing many U.S. corpo-
rate executives is how to plan for possible significant increases in anti-U.S. senti-
ment in other parts of the world. Is there a possibility that consumers in other parts
of the world might boycott U.S. products like Starbucks coffee, McDonald’s ham-
burgers, and Coca-Cola soft drinks? Interestingly, McDonald’s Corporation has
recently sought to preempt the impact of any such general product boycott in the
Middle East by launching a new product there, called McArabia, which is a chicken
sandwich on special Arabian bread. 16
crisis planning Planning for very high- Crisis planning is very similar to contingency planning, but involves planning
magnitude, unthinkable events for a very high magnitude change, for the unthinkable, for a crisis. For example,
the American Express Company’s international payment processing subsidiary
formerly based at 7 World Trade Center in New York City had engaged in crisis
planning to prepare for any major disaster that might threaten to totally shut down
its vital international payment processing operations. Unfortunately, on Septem-
ber 11, 2001, this disaster did occur, but American Express was ready. It immedi-
ately moved 85 employees from the World Trade Center to a parallel payment pro-
cessing facility it had established at a “warm site” somewhere (undisclosed!) in
New Jersey. In the meantime, customers all over the world could continue to count
on American Express! 17
While not a positive commentary on the state of the world, comprehensive cri-
sis planning has now become quite common in today’s business world. The well-
known management consulting firm Booz Allen Hamilton, for example, recently
conducted a planning exercise for its clients that involved dirty bombs being found
in containers shipped to various U.S. ports. Planning for possible terrorist attacks
of this kind is a good example of crisis planning. 18

reality Were any businesses in your community particularly impacted by the
CH ECK events of September 11, 2001?

Organizing

Once strategic plans are set, businesses need to set up organizational structures to
carry out these plans. If Whirlpool wants to be in China and has formulated specific
plans toward this end, it will need to establish a specific division, branch, or depart-
ment within its organization to coordinate and supervise its Chinese operations.

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