Valuable Lessons in Understanding, Planning for, and Mitigating Risk in China

Thursday, February 5, 2009 18:51
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Earlier this week, old friend Dane Chamorro (General Manager of Control Risks Asia) sat down to discuss how business risks are changing/ increasing in China as the ripples of the economic crisis come ashore.

[youtube]http://www.youtube.com/watch?v=z1ywVVkO5Rg[/youtube]

One of the most important issues he addresses is how employees can be impacted by the economic downturn, and how they will react. That a once trusted and loyal employee may participate in out of character behavior when they are uncertain about their job security, a behavior that may also arise should members of that employees family lose their job, their stock portfolio, etc.

Another important subject of conversation was the role that the recent turmoil may have on supply chains. That regardless of the direct impacts to your business, and how that impacts your order, if you competitor is ordering from the same supplier and they go under… your supplier may go under as well.

With his years of experience in risk management in China, Dan’s advice basically boils down to reach out to employees and suppliers to understand and anticipate how the economy will impact them, dust off contingency plans, and keep their ears to the ground. That in many ways, this situation is no different than normal in terms of how business should plan for risk – there is always risk – but it is the firms that fail to try and understand it or plan for it – that get hit the hardest.

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