Think water scarcity isn’t a risk for your company? Think again!
“Let’s use a hypothetical example. You run an apparel company, and the areas where the majority of the world’s cotton is grown are experiencing droughts; several problems may arise. The price of cotton could rise, the amount of cotton you can source may be limited, or your main source of cotton may no longer be available because farmers can’t plant their crop. What happens to your company if it can no longer find enough cotton, or to your profit margins if the price of cotton rises dramatically? Cotton as a crop is highly susceptible to water shortages and yet most of the production occurs in water scarce regions of the world: China, U.S. (primarily Texas and California), India, and Pakistan. If the governments in countries where cotton production occurs, decide they need the water for food production instead, your company will have suffered the next type of water related risk.”
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Bang on with your comment on Risk (and Crises)!
This type of “wide-angle” perspective is exactly what we at Riskope (http://www.riskope.com) teach in our courses and it is the subject of at least 80% of our world-wide consultng activity for companies of a wide array of horizons.
I hope you and you readers will find interesting this recent post http://foboni.wordpress.com/2010/04/27/a-few-comments-on-a-recent-paper-entitled-%E2%80%9Cnot-up-in-the-air-risk-management-lessons-from-the-volcanic-ash-cloud%E2%80%9D-pubished-by-economists-com-on-april-20th/ that talks about a closely related subject.
Also, as you will see from http://foboni.wordpress.com/2009/12/01/crisis-forecast-one-year-later/ and its update http://foboni.wordpress.com/2010/03/05/crisis-forecast-one-year-and-3-months-later-reality-check/, the key is to use “risk” information to develop pertinent and well balanced decision making that will promote your activities meanwhile protecting your assets. The methods exist,we use them for large corporations, but they are available for smaller companies as well.
Keep up with your excellent job!
Kindest regards,
Franco