Disaster related risk management practices in IHG Essay

Disaster related risk management practices in IHG - Essay Example Risk management in this context can be stated as an ongoing process which sustains throughout organizational life cycle. With these considerations, the essay discusses disaster risk management practices in an organization namely InterContinental Hotels Group (IHG) in Japan. Disaster usually follows natural threats and its severity depends on the level of impact on the organization. On the other hand, the level of impact is subjected to the choices made by organizations (U.S. Department of Health and Human Services, â€Å"Risk Management Plan†). THESIS STATEMENT The essay is based on understanding the disaster related risk management practices in IHG which faced losses due to recent earthquake in Japan, in the year 2011. The objective of the study is to discuss the event along with its consequence on the risk management activities of IHG. Furthermore, it also describes the learning gained from the incident. BUSINESS OF THE ORGANISATION IHG is a British hospitality organization and is also considered as one of the biggest hotel brands in the world. IHG operates in excess of nine hotels under its name and its business strategies concentrate on driving the demand of the brand. IHG operates the business in three different ways namely franchising, joint venture and ownership. Franchising is the biggest part of the business of IHG, however, it also uses the bricks and mortar model of business (InterContinental Hotels Group, â€Å"Overview†). ... This natural disaster had created a drastic impact on the performance of IHG. Its ANA Holiday Inn, which is situated in Sendai, had to be closed down for new reservation. The organization also became vulnerable in terms of safety of its people and guests due to the disaster. Furthermore, the property of ANA Holiday Inn which was situated in the close proximity to Fukushima Daiichi nuclear plant also faced the risk of disruption. The share price of the organization also fell drastically after the incident occurred in Japan (Telegraph Media Group Limited, â€Å"Japan Earthquake: The Companies Most Affected by the Disaster†). RISK MANAGEMENT IN IHG IHG has an established international risk management procedure and outline which is entrenched in every operation and activity of the organization. The objectives of risk management of IHG are to create a vigorous, reactive and strong procedure along with a successful, respected and liable business over the long run. With respect to ri sk management, the key objective of the organization is to recognize and manage risks, in line with the strategic objectives and long-term value of the business (InterContinental Hotels Group PLC, â€Å"Corporate Risk Management†). Risk Screening The risk management process is characterized by risk screening procedure which determines the risk severity and frequency. According to risk severity and frequency, risks can be separated into minor risks which do not necessitate much management attention and significant risks which require considerable management attention. There are two types of risks an organization can face such as internal risks and external risks. Internal risks comprise management, cost and cash flow related risks. On the other hand, external risks are usually related with