Knowledge@Wharton

"The hardest hit companies in any industry are likely to be those with worldwide operations, global supply chains, and/or international customers," states a report published in January 2006 by Marsh, a New York-based consultancy. "Already, some local, state, and national governments are setting in place plans to curtail travel, close schools, quarantine individuals and communities, and ban public gatherings." Such steps were taken during the SARS epidemic, especially in Asia where the disease was most prevalent.

Other companies, according to [Gary] Lynch, are taking a more thoughtful, holistic approach. "They say, 'We have to address this and we have to look at this in a way that allows us to leverage whatever it is we do for other types of disasters.'"
These firms analyze "a landscape of threats," Lynch adds. "They are trying to move away from [focusing only on] individual threats. Independent of what the threat is, the outcome is going to affect four things — people, technology and processing, their physical environment, and their relationships. So, if they can understand two things — what their current risk-mitigation and transfer strategy offers and to what extent that will protect them and how they can model other threats -- they can get a sense what sort of adjustments they have to make in their risk-management philosophy."