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Contingency Planning and Its Importance for Present-Day Organizations

A contingency plan serves the purpose of enabling an organization, institution, or enterprise to resume normal operations. The recovery should be as fast as possible after an unanticipated occurrence. This plan works by safeguarding resources, reducing customer disturbance, and identifying essential personnel by allocating particular roles throughout the recovery process. It identifies potential problems and takes action to prevent them from happening; therefore, contingency planning stands out as very useful in case of a wrong occurrence.

Benefits of Contingency Planning:

A well-documented contingency plan will enable the team to overcome fear, make sound judgments, minimize loss, and improve trust, hence faster transitioning into recovery mode.

Overcome fear

With panic avoided, the administration is better positioned to concentrate its efforts on reestablishing normal company operations. This helps staff overcome their first worries, make sound judgments, therefore transitioning quickly into recovery mode. The organization management can overcome fear by emphasizing the importance of the plan, establishing a reasonable budget, engaging the stakeholders, assigning roles and responsibilities, and addressing the training required (Black & Glaser-segura, 2020). Zero panics overcomes the challenges of contingency planning.

Make Sound Judgments

Making correct decisions and solving the arising problems is necessary for every administration that is working on contingency planning.

When creating a contingency plan, Leaders should evaluate the alternative outcomes regarding the intended goal hence aiding in the identification of company possibilities, strengths, and weaknesses, as well as the development of a more methodical strategy for avoiding, reacting to, and recovering from a catastrophe, (Samson, 2009). When making routine judgments or important, time-sensitive decisions in an emergency, using a standard problem-solving paradigm can assist guarantee the choices that are sensible and logical. Sound judgements promote a high level of assessment.

Minimizes Loss

A contingency plan is implemented when danger presents. The objective of the program is to mitigate the impact of the risks if it happens. Without a risk management strategy in place, the full effect of the trouble might have a significant influence on the project. Traditionally, business activities halt in the event of an interruption. A contingency plan in place enables firms to withstand these unanticipated events without ceasing operations. While developing and maintaining a contingency plan incurs expenses, these costs become little when contrasted to the cost of operational loss. (Sikka et al., 2016). Contingency plans serve as the last line of protection against risk

Improves trustworthiness 

Trust can be gained by ensuring all step is correctly emphasized during contingency planning. When a crisis is handled poorly, customers and workers are likely to abandon a firm. A contingency plan demonstrates to stakeholders that firms are robust and prepared to deal with any potential tragedy or emergency without hurting their ability to operate. Trust is most economically valuable when it is found on no contractual processes rather than contractual ones. (Dyer & Chu, 2003). This concept strengthens a brand’s tenacity and instils confidence in a firm.

Questions to Consider When Implementing Contingency Planning:

While addressing the case of contingency planning, consider the questions such as: What must be done? Who can do it? How to do it? When to do it? And Where to do it?

What Must Be Done?

In addressing the situation, one needs to describe all necessary tasks and quantifications required during an emergency; this involves establishing the sequence in which responsible personnel must be contacted in the event of an emergency. Generally, during an emergency, communication must be regulated. This specifies who will get which information, when and how it will be delivered internally and externally. Apart from resuming operations as soon as possible, it is critical to gather documents and folders from workstations and servers and create a central backup. External accommodation providers capable of providing supersession workstations or stand-by data centres should be contacted in advance to assist with crises.

Who can do it?

Persons involved in the planning should be highly considered as the process cannot be taken by a layman. Planning of Contingency should clarify who the competent person meant to fulfil specific duties and tasks in case of an emergency, considering that particular person may not be accessible. For instance, for provision of health authority managing bodies and clinicians with technical documents and qualifications addressing aspects of identifying the healthcare needs of critically ill patients in the event of a pandemic caused by the new SARS-CoV-2 virus are required to enable integrated and realistic planning of Intensive Care Medicine departments at the national and regional levels, as well as in individual hospitals. (Rascado Sedes et al., 2020). Therefore, it is essential to define functions and roles with their associated obligations on the substratum of scenarios without assigning them to specific humans. As a vital component of contingency arranging, designated personnel are sanctioned to abandon emergency procedures as this typically cuts short the traditional approbation procedures. The management has to leave their worries and trust the workers when it is up to them to decide (Rascado Sedes et al., 2020). Choosing who performs tasks in planning determines the success and efficiency of the contingency planning process.

How to do it?

Performing contingency planning depends entirely on the guidelines and protocols put in place by the team. Before implementing the contingency plan in its entirety, the handling unit should thoroughly review the scientific performance and efficacy of extreme situations in the response process (Rascado Sedes et al., 2020). Explanations and checklists assist responsible individuals in handling responsibilities in an emergency. Complex instructions may gloss over minor details, simple lists, graphs, and organized forms (in PDF, Word, or hardcopy format) provide a practical summary without requiring prolonged browsing.

When to do it?

The necessity of contingency planning should raise concerns. After prioritizing your list of possible risks, you should prioritize your strategies and develop contingency plans for the most severe threats to your firm (Wu, 2018). Planning to counter the problem should be put in place depending on tasks to adhere to. Schedule for activities and explicit injunctive authorizations on the sequence in which chores must be completed is formulated (Wang et al., 2020). This may not be easy to undertake since planners must include into their workflow idea the fact that several operations must be run simultaneously to deal with the crisis.

Where to do it?

The sponsors for the project should determine and approve the location of contingency and the mechanism for applying it. It should be used at the start of the project based on assumptions, known risks, and execution confidence. Since some duties must be completed in a particular area, the location of each team should be specified and, to the extent feasible, and achieve similarity as well (Lestari et al., 2018). This can be confirmed in an instance of backup workstations and data centres.

Common types of Contingency planning

Contingency planning is discussed under various categories/types such as Business Continuity and Recovery, protecting Assets, Investment Positions, and Cyber security.

Business Continuity and Recovery

Contingency plans are significant for overall business continuity strategy as it guarantees the firm for anything. A disaster recovery plan is a strategy for regaining access to all vital information. The plan helps to ensure you are prepared for what may happen; a crisis management strategy permits you to handle the reaction when the disaster occurs (Lestari et al., 2018). Businesses must prepare ahead to ensure that they can continue operating during and after an occurrence. This contingency plan is often referred to as business continuity or business recovery plan (BCP) or a business recovery plan.

Protecting Assets

A contingency plan should contain a detailed procedure outlining what to do if the incident occurs and address the issue to protect assets. Contingencies may include contingent investments and benefits rather than losses that accrue to a business or private if a questionable future event is resolved. A favourable court ruling or an inheritance are both examples of contingent assets.

Investment Positions

Plans should have risk management and business continuity management components to ensure that a firm can cope with disruptions and the performance of obligations. Investors safeguard themselves against unforeseen events that might result in financial losses associated with the investment. They may use a variety of hedging tactics, including stop-loss orders, which automatically exit a trade at a certain price level.


Cybersecurity contingency plan writes the risk management document that details how a business should recover its information technology services and data in the case of a security breach, natural catastrophe, or system outage. Cybercriminals attempt to use a crisis to hack into a company’s networks and glom data or disrupt commercial operations (Lestari et al., 2018). Contingency plans are ingrained in our culture to detail cybersecurity teams’ steps to protect a company from threats and malicious assaults.


Black, S., & Glaser-segura, D. (2020). Supply Chain Resilience in a Pandemic: The Need for Revised Contingency Planning. Management Dynamics in the Knowledge Economy8(4), 325–343.

Dyer, J. H., & Chu, W. (2003). The role of trustworthiness in reducing transaction costs and improving performance: Empirical evidence from the United States, Japan, and Korea. Organization Science14(1), 57–68.

Lestari, P., Paripurno, E. T., & Nugroho, A. R. B. (2018). Disaster Risk Reduction Based on Community through a Contingency Plan for Mount Sinabung. Jurnal Ilmu Sosial Dan Ilmu Politik21(3), 231.

Rascado Sedes, P., Ballesteros Sanz, M. A., Bodí Saera, M. A., Carrasco Rodríguez-Rey, L. F., Castellanos Ortega, A., Catalán González, M., de Haro López, C., Díaz Santos, E., Escriba Barcena, A., Frade Mera, M. J., Igeño Cano, J. C., Martín Delgado, M. C., Martínez Estalella, G., Raimondi, N., Roca i Gas, O., Rodríguez Oviedo, A., Romero San Pío, E., & Trenado Álvarez, J. (2020). Contingency plan for the intensive care services for the COVID-19 pandemic. Medicina Intensiva (English Edition)44(6), 363–370.

Samson, R. (2009). Decision Making and Problem Solving. Leadership and Management in Nursing Practice and EducationNovember, 59–59.

Sikka, A. K., Bapuji Rao, B., & Rao, V. U. M. (2016). Agricultural disaster management and contingency planning to meet the challenges of extreme weather events. Mausam67(1), 155–168.

Wang, J., Qi, H., Bao, L., Li, F., & Shi, Y. (2020). A contingency plan for the management of the 2019 novel coronavirus outbreak in neonatal intensive care units. The Lancet Child and Adolescent Health4(4), 258–259.

Wu, Y. (2018). Current Situation and Countermeasure of Heavy Pollution Weather Contingency PlanApssh, 716–719.


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