PERCEPTION OF CRISIS MANAGEMENT: A COMPARATIVE ANALYSIS OF GUATEMALAN AND U.S. SMALL BUSINESSES

Transcription

1 PERCEPTION OF CRISIS MANAGEMENT: A COMPARATIVE ANALYSIS OF GUATEMALAN AND U.S. SMALL BUSINESSES Joh E. Splla, Ph.D. Assocate Professor of Bess Pe State Uversty Dubos Dubos, PA ( jes40@psu.edu ad Chrstopher Zemowcz, Ph.D. Professor of Bess School of Bess Uversty of North Carola-Pembroke Pembroke, NC zemow@ucp.edu Abstract Orazatos may be cofroted wth a crss that stras ther resources ad mpact ther msso. Crss maaemet seeks to mmze the mpact of these evets. The crss maaemet lterature foces o larer besses, there has bee less wrtte compar small eterprses the Uted States ad those a fore coutry. Ths study exames ad cotrasts percepto of crss cdets U.S. ad Guatemala small besses. A survey coducted amo small frms both coutres dcates that, for most of the crss types studed, there were sfcat dffereces the level of cocer ad/or the occurrece rates betwee the two coutres. Reasos for ths are dscsed ad mplcatos for maaemet are preseted. Itroducto Numero evets, scares, ad scadals have hhlhted the mportace of be prepared for a crss. Maaers have aalyzed ther vulerabltes ad examed orazatoal prortes. Ths topc has bee extesvely researched the Uted States. However, the experece wth other atos has ot bee as thorouhly studed. For example, Guatemala oe of the major crss maaemet evets that have had a lo hstory bess s corrupto (Mller, Its mpact o stablty ad survval of besses s substatal. Orazatos should have a crss maaemet pla to cope wth uexpected crses sce be prepared typcally lesses some of the trauma ad costs of a crss. The most sero error s to assume that a crss wll ever occur. A deal atttude s a formula for effectve respose to ay crss. Effectve crss pla ad executo of a pla has show to cotrol the crss ad eve tur the crss to a advatae for the bess (Wlderoter, There are also may more examples where the lack of preparato resulted rreparable damae, from dvdual cases of employee embezzlemet (Daels, 2002 or mass dsrupto bess cotuty due to atural evets lke Hurrcae Adrew (Kre, These problems uversal to orazatos worldwde ad demostrate that bess maaers

2 eed to develop plas of acto to ether prevet the occurrece or mtate the damae from a crss evet. Crss maaemet s a method for pla for deal wth a uexpected evet a orazato. Most lare orazatos have ow developed crss maaemet plas ad teams to be prepared the evet that some crss would occur. O the other had, maaers of small besses seem to avod prepar for crss maaemet. Ther vew s crses do t happe our dtry/feld or we have a well maaed bess ad could maae our way throuh a crss wthout a pla (Caporo, Typcal assumptos clude: (1 Crss evets oly happe to other orazatos or that they are somehow protected from a crss (Mtroff, (2 Isurace polces cover losses or work terrupto that may emere from the crss. (3 They do ot have the resources or the tme to establsh plas or readess requremets (Barto, (4 Today s problems are so dffcult ad tme cosum that makes t hard to pla for tomorrow s ucertates (Caporo, Whle these are uderstadable pots of vew, they may be detrmetal to the success of the small bess operato. Crss maaemet ad cotecy pla deas have bee dscsed bess perodcals ad academc lterature for over several decades. The bess evromet seems to be faced wth ew ad more sophstcated teral ad exteral threats, terrorst plots, or other ucertates that may affect orazatoal vablty or survval. The experece ad research wth the Uted States may th provde sht or udace for small bess maaers other atos. As these ssues become essetal to staable bess developmet, ths paper foces o a overvew of crss maaemet perceptos of maaers the Uted States ad Guatemala. It emprcally vestates: (1 the dfferet perceptos of Guatemala ad Amerca small bess maaers reard the cocept ad practces of crss maaemet, (2 the explaatos for the dffereces perceptos ad practces that exst amo besses both coutres, ad (3 the alteratves or recommedatos that ca strethe the preparedess of U.S. ad Guatemala small besses. A summary of lterature s preseted ad fve major areas of potetal crss are detfed: operatos, publcty problems, fraudulet actvtes, atural dsasters (althouh we do ot aalyze ths cateory, ad leal crses. Two hypotheses about crss maaemet teams ad the potetal for a crss a small bess are preseted. These are tested, aalyzed, ad evaluated. A dscso foces o the reasos why the dffereces exst. Lterature Revew A crss ca be defed as a tur pot where evets or actvtes ru the rsk of escalat testy, terfere wth the ormal operatos of the bess, edaer the bess s publc mae, or damae ts bottom le ay way (Fk, Ths defto s assocated wth a broad cateory of evets ad cdets that ca mpact a orazato. Small besses may be cofroted wth varo types of crss dur ther exstece. Ther ablty to maae the crss successfully ca mea the dfferece betwee survval ad dsaster. Revews of crss preparedess by Fk (1986 ad Offer (1998 dcated that half of all besses strcke by a crss wll ot survve f they do ot have a adequate bess recovery pla place. Pedoe (1997 offers a pessmstc observato dcat that 90% of besses wthout a dsaster recovery pla would fal wth two years of a dsaster. The relevat questo maaemet ad pla s ot whether a crss wll occur, but what kd ad whe t wll occur (Caporo, 2000; Kre, Accord to Caporo (2000, crss maaemet s the fucto that works to mmze the eatve mpact of a crss ad helps a orazato a cotrol of the stuato.

3 Crss Defto ad Idetfcato Smbo s work (1993 dcated that oe of the major reasos besses do ot have effectve crss maaemet plas s becae they have ot detfed the major crss evets that could mpact ther orazato. Cosequetly, they have ot developed the crtcal tools for develop comprehesve crss plas for deal wth crss stuatos. Fk (1986 asserts that crss detfcato s mportat for two major reasos. (1 Whe the crss s properly defed, t ca be maaed. (2 Oce the crss s defed t allows the maaer to determe the deree of fluece they have over the desred outcome. Sce crses are eerally followed by a varety of dversoary problems, t s mportat that the maaer detfy the real problem ad foc tervetos o the core ssues rather tha be dstracted by other ssues. Warwck (1993 pots out that oe of the major staes mportat to preparato of a crss maaemet pla s perform a rsk assessmet of potetal problems. The probabltes of a crss a partcular area of a bess actvty vary. Maaers should detfy vulerabltes or crss evets that could affect ther orazato. The lterature replete wth classfcatos for crss evets ad there s lttle areemet. Several scholars have arraed crses roups two by two matrces (Marc & Goodma, 1991; Meyers & Holha, Others have ed clter aalyss (Pearso & Mtroff, Althouh classfcato systems are mportat to the researchers, maaers eed to be cocered about ther uque vulerabltes (Caporo, McCartey, Cradall, & Zemowcz (1999 have developed a effcet method of vew crses. Ther framework orazes crses to fve types: (1 operatoal crses, (2 publcty problems, (3 fraudulet actvtes, (4 atural dsasters, (5 ad leal crses. Exhbt 1 summarzes may of the crss evets that cofrot small bess small bess maaers. As maaers detfy crss evets ad determe ther bess s possble vulerablty, they ca seek addtoal formato to develop proper pla to prepare for a crss. Operatoal Crses Exhbt 1 Fve Cateores of Crss Evets Loss of records permaetly due to fre Computer system breakdow Loss of records permaetly due to computer breakdow Computer system vaded by hacker Major dtral accdet Major product/servce malfucto Breakdow of a major pece of producto/servce equpmet Death of key executve Fraudulet Actvtes Publcty Problems Theft or dsappearace of records Boycott by cosumers or the publc Embezzlemet by employee(s Product sabotae Corrupto by maaemet Neatve meda coverae Corporate espoae Theft of compay property Employee volece the workplace Natural Dsasters Leal Crses Flood Cosumer lawsut Torado Employee lawsut Sowstorm Govermet vestato Hurrcae Product recall Earthquake Adapted from: Cradall, W., McCartey, M., & Zemowcz, C. (1999. Iteral audtors ad ther perceptos of crss evets. Iteral Audt, 14 (1,

4 Iformato Needs The maaer should ask the questos, what crss s of most cocer to our bess ad has such a evet or ay crss evet actually happeed our bess? The aswers are mportat becae (1 whe potetal crses evets are detfed, the maaers ca pla for them ad (2 recoto of potetal evets ca eable maaemet to eact measures to prevet the occurrece of that crss. A maaer who lacks suffcet formato about the crss caot develop a pla to address t. For example, oe of the most dffcult evets a orazato s the o-ste death of a employee. If the worker was crtcal to the day-to-day operatos, plas mt be avalable to replace the deceased worker wth comparable skll ad experece (Wek, Crss Maaemet Teams There are very covc arumets support the formato of crss maaemet teams (Barto, 1993; Caporo, 1998; Hckma ad Cradall, 1997; Pearso ad Clar, 1998 that ca take chare of pla for a crss before ts occurs, as well as maa the problems that emere dur the crss. Fk (1986 states that t s ecessary to establsh a crss maaemet team before a crss pla ca be developed. Pearso ad Clar (1998 report that those orazatoal maaers wth crss maaemet teams show a reater cocer for ad atteto to potetal crses tha orazatos wthout crss maaemet teams. Moreover, Fk (1986 arues that orazatos that do ot have a pla reported that the crss lasted two ad oe half tmes loer tha those for orazatos that had a crss pla place. Caporo (2000 states that the best way to help sulate a bess from the dama effects of a crss s to establsh a crss-maaemet culture the orazato. Most orazatos develop a crss maaemet team becae ther bess culture recozes the cosequeces of ot be prepared for a crss. They value the team s cotrbuto achev a proper level of preparedess. Addtoally, prevo crss evets have tauht besses sero lessos ad have sfcatly hehteed ther awareess. The awareess the orazato that a crss could happe wll lead to pla for that evet, ad such preparatos volves the formato, at least formally, of a crss maaemet team. Secodly, accord to Perose (2000, experece from actos or actvtes that proceeded the creato of the crss maaemet team has tauht mportat lessos. A terest questo emeres dur the dscso of crss maaemet: why s there more cocer for crss evets some besses tha others? Is the crss evet the catalyst for cocer, or s t merely a cosequece of hav a maaemet team that cosders pla for crss evets to be a teral part of the bess s stratey? A assortmet of maaemet lterature dcates that orazatos are jt aturally reactve cocer potetal future crss (Mtroff, Pauchat, ad Shrvastava, 1989; Pearso ad Mtroff, 1993; Perose, 2000, Shrvastava, The crss evet may be the oly cetve for a bess to tate the pla process to prevet aother occurrece of the same or smlar evets. Crss Pla Small Besses The dscso of eeral ssues brs the questo of what are the crss evets that are of most cocer to small besses? Ivestat ths provdes eful shts to some of the worst-case scearos that should be plaed for the crss maaemet process. Three cosderatos ca be evaluated: (1 has the crss evet occurred the recet past, (2 what s the curret level of cocer for that partcular crss, ad (3 are there ay uque characterstcs of the coutry that would crease the lkelhood of a certa type of crss? A crss that has occurred the recet past ca become a caddate for future worst-case scearo pla. Crss maaemet matas that a potetal crss mt be mtated ad hopefully preveted from occurr the future. For example, computer system breakdows occur frequetly ad ca cae a major dsrupto the ru of a bess. Maaemet

5 wll wat to take steps to prevet ther re-occurrece f possble. Cosequetly, some pre-pla mt take place. A commo practce larer orazatos s to have back-up computer facltes place (hot stadby before a major dsrupto occurs. Past experece wth a specfc crss ca be a catalyst to pla for future occurrece of that same crss. The actual cocer for a crss s mportat to worst-case scearo pla. Whle t s expected that cocer wll crease f a crss has already occurred, t s also possble that cocer may be elevated eve f the specfc crss has ot occurred at the orazato. For example, the September 11 terrorst cdets the Uted States elevated orazatoal cocers about smlar attacks. Elevated cocer for a specfc type of crss ca make that evet a caddate for worst-case scearo pla. The partcular characterstcs of a reo may dctate what types of crses should be cluded worst-case scearo pla. For example, parts of the Uted States such as Florda, weather cocers such as hurrcaes are cluded worst-case scearo pla (Kre, Ivestat other atos, such as Guatemala, provdes ew perspectves. For example, crme ad corrupto are prevalet parts of Guatemala. Therefore, besses elsewhere may be wse to pla coteces for some of these evets. Guatemala Guatemala s a develop ato that s the larest ad most desely populated coutry Cetral Amerca. It faces may challees ad s amo the te poorest coutres Lat Amerca. The ecoomy s bult o two major ecoomc sectors, arculture ad retal servces. Both of these semets provde the ee for ecoomc developmet. The ato ejoys sfcat factors of edowmet ad s rch meral, ol, ad other atural resources. Toether wth ts low labor cost, Guatemala ow has a row lht dtry sector. It has the larest dtral base Cetral Amerca ad s a mportat maufacturer of pharmaceutcals, chemcals, cloth, wood, ad food products, (Mahler, However, North Amerca style of bess crss maaemet s a relatvely ew cocept for besses Guatemala. Crss evets Guatemala A major barrer to ecoomc developmet has bee ts hstory of cvl strfe. Guatemala has bee eaed crses due to cvl war, corrupto overmet, or volece the streets (Kcad, The ecoomy has suffered becae of the ucertaty ad a lack of cotuty the bess clmate. I other words, Guatemala has bee a crss mode for a lo tme. Moreover, dstrt of the overmet flters dow to eeral bess actvtes. Corrupto s a major crss maaemet ssue wth a lo hstory wth overmet ad bess (Mller, Becae waes are low ad jobs are scarce, survval s a perpetual thouht o the mds of may Guatemala ctzes. Corrupto ca be a opportuty to escape the problems of poverty. It also may be perceved as a meas of wealth accumulato otherwse ot avalable throuh the ormal job creato process. Aother problem s a-actvty that threates volece o dvdual ctzes ad besses. These as ca be traced to poltcal problems, as well as the uequal dstrbuto of come (Saltz, Poltcal problems have led to sporadc uerlla attacks, kdapps, ad hh profle murders (Rarck, The uequal dstrbuto of come has exposed small besses to problems of teral theft, robbery, murder ad extorto. Problems of corrupto ad volece -- alo wth other bess crss problems such as Iteret hack, dtral accdets, ad computer malfucto -- have made Guatemala vulerable ad th crss maaemet s a cocer wth socety ad bess.

6 Respose Crtera Research Methodoloy There were three possble ways whch a respodet could aswer each questo about the cocer for a partcular crss evet: Hh, Low, ad by fal to aswer; the occurrece questos were ether aswered yes or ot aswered. As exploratory research the statstcal aalyss of dffereces, was performed a maer that allows statstcal proof of dffereces. As the proporto of respodets aswer a partcular way s a type of averae, the Cetral Lmts Theorem uaratees that the measured proporto s a asymptotcally ormal dstrbuto about the true proporto of respodets that would aswer that way. Furthermore, as the U.S. ad Guatemala aswers are both ormally dstrbuted, the dfferece betwee the measured values for each coutry wll also have a ormal dstrbuto. I partcular, f there s o dfferece betwee two coutres, p! p ~ Z (1 p s or N(0,1, where p ad are the proportos for the Uted States ad Guatemala, respectvely ad s the stadard error of the relevat proporto. Hypotheses The test bes wth a ull hypothess that the atttudes ad expereces are the same both coutres or H 0: there s o dfferece the proporto of U.S. frms ad Guatemala frms that are hhly cocered about crss evets ad crss occurreces H 1: there s a dfferece the proporto of U.S. frms ad Guatemala frms that are hhly cocered about crss evets ad crss occurreces If the ull hypothess s true, the measure of dffereces proporto should, o averae, be zero. Values sfcatly dfferet tha zero are ulkely f there s o actual dfferece, ad th allow to coclude that, for that cateory, the coutres are dfferet. Th Table 3 shows FtoR, for fal to reject, for small dffereces. Ths meas that we caot prove that they are dfferet. The result s that coutres are the same (but does ot prove t; the result s smply coclve. Etres of Reject mea that the dfferece was lare eouh that we ca be at least ety-fve per cet certa that there s a dfferece. Ths happes for a reported Z value of 1.96 or reater, ad for 1.96 or less, wth postve mea that more respodets the U.S. aswered that maer, ad the eatve mea that more Guatemalas aswered that maer. Fally, whe calculat the dffereces of hh cocer, the falure to aswer was treated as low cocer, whle falure to aswer was treated as hh cocer whe work wth low cocers. Ths coservatve approach sures that the dffereces are at least as stro as that clamed by the statstcs. Aswer a questo a partcular maer ca be treated as a Beroull varable, hav a success (or value of 1 whe aswered that way, ad a falure (or value of 0 whe aswered ay other maer. p s the uderly parameter dcat the proporto of the populato that wll aswer that maer, also called the frequecy. It s ctomary to defe q = 1! (1 p The fracto of respodets aswer ths matter s the a sample mea, ad ca be calculated as x p = (2 p s

7 For lare samples, the Cetral Lmt Theorem uaratees that ths varable wll be asymptotcally ormal dstrbuted, ad the well-kow varace of the Beroull tral, & pq # p $! ~ N p, (3 % " where s the umber of resposes. Geerally, a lare sample s take to be thrty or more. I the partcular case of frequeces, the addtoal requremets are eerally made that! 5 (4 p Ad q! 5 (5 whe ths s ot the case, the dstrbuto s ot suffcetly ormal for the test. For the preset data, the ull hypothess for ay ve survey questo wll be that the Amerca respose ad the Guatemala are detcal. Uder ths hypothess, p ca ad p are separate observatos of the same uderly parameter; p That s, f the hypothess s true, p s the true frequecy for both Amerca ad Guatemala frms, whle p ca ad p are two separate varables draw from the dstrbuto. Lear combatos of ormal varables are dstrbuted ormally themselves; the case of strahtforward addto ad subtracto the combed varace s the sum of the varaces, whle the combed mea s the sum or dfferece of the meas. I ths case, the meas are the same uder the hypothess; ther dfferece s hypotheszed as mea zero, ad s dstrbuted 2 2 p " p ~ N 0,! +! (6 (, P, P, wth the dvdual varaces be of the form 2 pq! = P, (7 whch combe as ( & # 2 pq pq $ 1 1 = + = +! p ' p pq G %,, " ad therefore the quatty p! p z p " 1 1 pq + (9 has a stadard ormal dstrbuto. G Equato (9 stll requres a calculato of p, whch tur yelds a able q. Retur to the hypothess that both roups are the same, the best estmate of the true frequecy wll come from the uderly frequecy p ca be best estmated by the derees of freedom for each observato to form a wehted averae, p + p = (10 + whch substtuted to yelds the fal dstrbuted test statstc of: p

8 z = = = p q ( p + p [ 1! ( p + p ] 2 ( + ( p! p ( + ( p + p [ 1! ( p + p ] p! p p! p 1 1 whch ca easly be calculated partwse o a spreadsheet (11 Survey Istrumet The ut of aalyss was the small bess maaer. The objectve was to measure ther perceptos about bess crses ad crss maaemet. The survey strumet was based o that ed by Cradall, McCartey, & Zemowcz (1999 ad developed aroud the crss evets lsted Exhbt 1. Data collecto For U.S. frms, a drectory of small besses was obtaed from the state Small Bess Forum ad from the uversty s cotu educato statewde small bess database. The survey was maled to 1,000 radomly selected small besses Pesylvaa ad New York. Each survey cotaed a stamped, self-addressed evelope, ad was addressed to the huma resources or executve offces of each compay. Oe hudred ad sxty two eable surveys were receved for a respose rate of 16.2%. The survey was traslated to Spash ad the back traslated to Elsh to assure cosstecy ad accuracy of the questos. For the Guatemala partcpats, bess owers ad maaers from 212 eterprses located 6 major ctes (Guatemala Cty, Coatepeque, Sa Marcos, Quezalteao, Mazalteao, ad Retalhuleu were cotacted ad asked to complete the survey. All of the partcpats were recruted o the bass of accessblty ad partcpated volutarly. Procedure Each respodet completed oe survey that asked for formato o four dfferet sectos. The frst secto asked for demoraphc formato o the type of bess, umber of employees, ad umber of year the bess. The secod secto foced o the type of crss evets such as operatoal crss, publcty problems, fraudulet actvty, atural dsasters, ad leal crss that the bess may have expereced. The thrd secto requested a dcato as to whether the orazato had a crss maaemet team. Fally, the fourth secto asked ope-eded questos o how the orazato reports crses to maaemet ad what other crses they have ecoutered that were ot o the survey. Each partcpat was asked to aswer all survey questos by mark the approprate box or crcl a respose. For secto two, the respodet could choose a level of cocer about a crss by crcl a scale from oe for low to a fve for hh. Results Partcpats The frst phase of the aalyss developed the descrptve uderstad of the besses ad ther composto. Table 1 lsts the sze of the orazatos terms of umber of employees that respoded to

9 ths survey. I the U.S., ety-four orazatos (64.4% had less tha 25 employees. Twety-seve orazatos (18.5% had betwee 25 to 99 employees. Netee orazatos (13.0% had betwee 100 ad 499 employees whle 6 orazatos (4.1% were over 500 employees. Sxtee orazatos dd ot respod to ths questo o the survey. I Guatemala, the sze of the orazato terms of umber of employees s reported Table 1. Oe hudred ehty-e orazatos had betwee 2 to 49 employees for a total of 93.6% of the respodets. Eleve orazatos (5.4% were composed of 50 to 499 employees. Oe orazato had over 500 employees ad oe dd ot respod to ths questo. Table 1 Sze of U.S. ad Guatemala frms survey Sze of U.S. Frms Frequecy Percet Cumulatve Percet Less tha 25 employees Betwee 25 ad 99 employees Betwee 100 ad 499 employees Over 499 employees Total 146 Note: 16 orazatos dd ot report o ths varable Sze of Guatemala Frms Frequecy Percet Cumulatve Percet Betwee 2 ad 49 employees Betwee 50 ad 499 employees More tha 499 employees No- respose Total Exstece of a Crss Maaemet Team Table 2 lsts the respose to the questo: Does your orazato have a crss maaemet team? I the U.S., sevetee orazatos (11.0% dcated they had such a team whle 138 orazatos (89.0% respoded that they dd ot have a crss maaemet team. Seve orazatos dd ot respod to ths questo. Amo Guatemala besses, etee respodets (9.4% dcated that ther orazato had a crss maaemet team. The majorty, 183 respodets dcated ther orazatos dd ot have such a team whle 10 respodets dd ot aswer the questo. Table 2 Frequecy of crss maaemet team U.S. ad Guatemala frms Does your orazato have a crss maaemet team? U.S. Frequecy Percet Yes No Total Note: seve orazatos dd ot report o ths varable Does your orazato have a crss maaemet team? Guatemala Frequecy Percet Yes No Total Note: te respodets dd ot aswer ths questo The secod phase of the aalyss foced o the deree of cocer for a specfc crss evet occurr small besses. Table 3 summarzes the relatoshp of the crss occurrece ad cocer that s assocated wth the specfc crss evets ths bess type. Crss evet by crss evet comparso reveals that there are some sfcat dffereces betwee the two coutres. The fal phase

10 of the statstcal aalyss requred calculat the Z statstcs for each crss evet for both coutres. Ths procedure produced the results that are summarzed Table 3. Colum A ad B dsplays values of the proporto of respodets who dcated ther cocer a crss ad the occurrece of a crss. Colum C calculates the Z value for both coutres ad presets the results of ths calculato. The follow dscso provdes a perspectve o the dffereces that exst betwee the types of crss each coutry. Table 3 Comparso betwee crss cocer ad crss occurrece U.S. (A Guatemala (B Z of Dfferece (C Crss Evet: H Lo Occur H Lo Occur H Lo Occur Theft or dsappearace of records Lost records permaetly due to fre Lost records permaetly due to computer breakdow Computer system vaded by hacker Major dtral accdet Major product/servce malfucto Death of a key executve Breakdow of a major pece of producto or servce equpmet Iteret ste dsrupted due to hacker or some other act of veeace Boycott by cosumers or the publc Product sabotae Neatve meda coverae Embezzlemet by employee(s Asset msapproprato for employee's beeft Corrupto by maaemet Corporate espoae Theft of compay property or materals Employee volece at the workplace Flood Torado Sowstorm Hurrcae Earthquake Cosumer lawsut Employee lawsut Govermet vestato Product recall The Z scores hhlhted ray dcate scores that preset o dfferece resposes o ther respectve crss evet. Guatemala bess maaers faled to aswer questos far more frequetly tha dd the Amercas, whch shows the data. A postve z value dcates that that a larer umber of Amerca respodets aswered ths maer, whle a eatve value dcates that more Guatemalas aswered ths maer. Whle the cocer rates frequetly have opposte ss o ther z values, ths s ot always the case. For example, for the secod questo about record loss due to fre, Amercas reported that they

11 were hhly cocered 60% of the tme, compared to 50%, a statstcally sfcat dfferece. However, 25% of Amerca ad oly 17% of Guatemalas aswered that they had low cocer, a dfferece that s statstcally sfcat. Ths apparet paradox s resolved by ot that a far larer umber of Guatemalas faled to respod to the questo: 33% as compared to the Amerca rate of 15%. I may areas, the data shows coclvely that Amerca ad Guatemala atttudes ad expereces wth crss maaemet are dfferet. Ay value wth a matude reater tha 1.96 allows the hypothess that the respose s the same for both coutres to be rejected at the 95% level. Smlarly, values wth a matude of or reater ca be rejected at the 99% level. Values beyod 3 are rejected at ay reasoable level. The subsequet dscso presets the results from the aalyss as they relate to seve major crss evets besses each ato. Theft of records The frst questo, the theft or dsappearace of records, s eful for lltrat most of the possble outcomes of the questos. Note frst that the Hh ad low resposes do ot total 100%. Ths s due the fact that ot all questos were aswered o all surveys. Addtoally, the o-respose rate s lower o all questos for the Guatemala data. Accordly, the statstcs developed the methodoloy secto cosder both a aswer of Low ad the lack of a respose as ot hh whe compar Hh, ad smlarly compar Low. Ths treatmet assures that overly stro clams wll ot be made. Wth a z value of +4.34, t s clear that theft or dsappearace of records s of far reater cocer to Amerca besses tha those Guatemala. Ths value s extreme eouh to reject a hypothess that the cocer s the same at ay reasoable level. The z value for low cocer s 2.21, wth the s reflect the fact that Guatemalas were more lkely to express low cocer. Ths, too, s a statstcally sfcat dfferece, but at the 90% level. Note that the matude of the two values s ot the same, or eve smlar-ths s a artfact of the dfferet o-respose rates. Fally, most compaes both coutres had a theft or dsappearace wth the last three years. The z value of s suffcet to reject the hypothess that the rate s the same at the 99% level. Loss of records due to fre Amercas were more lkely to report both hh ad low cocer tha Guatemalas. Aa, ths s a cosequece of dfferet o-respose rates for the two coutres. I ths case, the dffereces result reject oe hypothess whle fal to reject the other. The z of s suffcet to coclude that the coutres are hhly cocered at a dfferet rate, whle the allows the coclo the rate of low cocer s dfferet wth 95% cofdece. Fally, the occurrece rate s dfferet. Computer crses The two computer questos yeld startl dffereces betwee the U.S. ad Guatemala. Frms the U.S. are far more lkely to have a low level of cocer tha hh, each case; whle Guatemalas are more lkely to be hhly cocered tha to show low cocer. The z of 3.56 ad 3.44 for the hh cocer yeld the coclo at the 99% level that ths rate s dfferet, ad the ad values show coclvely at ay reasoable level that Guatemalas are less lkely to have low cocer for computer breakdow or hacker vaso. Whle the dfferece tro rate s statstcally sfcat, early twce as may Guatemalas have had data loss, wth a z of a staer Major product or servce malfucto Hav a major product or servce malfucto s clearly a sfcat problem whe t happes. Not oly are reveues lost, but also the frm's reputato s tarshed. A barely sfcat statstcal dfferece exsts for low cocer, ad s sfcat for hh cocer, wth the U.S. respodets be more lkely to ve both aswers. A terest dfferece s the occurrece rate where U.S. frms are more tha twce as lkely to report that they have had ths problem. The z statstc of 7.78 makes t amo

12 the hhest reported ay cateory. It ca be cocluded that U.S. frms have ths problem far more ofte tha Guatemala frms. It s uclear why a more developed coutry wth reater resources would have such a problem. The techcal resources would seem to provde a reater ablty to avod catastrophc falure. Oe possble explaato s that these resources also allow more complcated products ad servces, th mak them subject to more falure modes. Product sabotae Whle there s a small statstcal dfferece the proporto of frms suffer from sabotae each coutry, ad almost o dfferece the umber of frms report low cocer. The U.S. frms are a tme ad a half as lkely to be hhly cocered about the matter, at early three quarters. Embezzlemet ad Msapproprato by Employees A area that shows partcularly stro dffereces s that of embezzlemet by employees. U.S. frms are almost twce as lkely to be hhly cocered, whle Guatemala frms are more tha twce as lkely to express low cocer. Both dffereces are sfcat at well past the 99.9% level. Furthermore, the evet s far more lkely to occur the U.S. as well. Perhaps most terest s that Guatemalas express low cocer eve wth a hh cdece of the problem. Whle 62% report a problem, oly 36% have hh cocer, ad 35% express low cocer. Surprsly, eve frms suffer from the problem express low cocer. The asset msapproprato by employees ad maaemet corrupto questos show smlar patters, the dffereces are all the same drecto, ad are all statstcally sfcat save for low cocer about employee msapproprato. Cosumer Lawsut Whle the Uted States has a reputato for a hhly lto, cosumer lawsuts appear to be a far more sero cocer Guatemala. Whle the dfferece hh cocer s sfcat, at about half for both coutres, early four tmes as may U.S. frms report a low level of cocer. I fact, the oly cateores for whch fewer Guatemalas reported low cocer tha the 10% for ltato are torados ad sowstorms. Furthermore, ths low cocer s spte of a statstcally hher reported rate of ltato Guatemala, whle most frms reported such suts both coutres, oly half as may Guatemala frms do ot report the problem. Product recall Whle most cateores are terest for the dffereces see, the product recall cateory s more terest for the smlartes see. Frms the U.S. report a statstcally hher rate of hh cocer. The low cocer rate, however, ad eve the occurrece rate, s early detcal. Whle t s ot possble to prove the ull hypothess statstcally, values ths small stroly suest o dfferece. The fds ths study reveal o sfcat dfferece the meas for the deree of cocer for a potetal crss besses that have a crss maaemet team ad those that do ot. However, there was a sfcat dfferece meas for the deree of cocer for a potetal crss besses that had expereced a crss vers those besses that had ot expereced a crss. At frst mpresso, these are uexpected results. The Uted States eerally es far more techoloy, ad more advaced computers, ad th could be expected to have more sero cocers. However, the U.S. also has more sklled IT workers avalable to secure ad mata the systems, ad the ewer computers wll be more lkely to have more up to date ad more secure software, as well. Smlar results were foud o the Iteret ste questo. A outrht majorty of U.S. frms report a lack of cocer to ste dsrupto due to malco actos, whle a majorty of Guatemalas report hh cocers. For both cocer levels, the statstcs are smlar to the other computer questos. Addtoally, the cdece s far hher Guatemala where fve out of sx frms report hav had the problem, early twce the rate of the U.S.

13 Coclos Ths study has looked at the perceptos ad expereces of Guatemala small besses relato to crss evets ad crss maaemet. The results dcate that eeral, small besses are ot that cocered about crss ssues ad subsequetly, few hav crss maaemet teams. Oe reaso ths may be the case s that smaller besses experece fewer crss evets relatve to larer orazatos. As a result, the perceved eed to pla for a crss s ot as stro. However, there s a paradox. Small besses are also very lkely ot to recover fully f they do experece a crss evet. I fact, small besses ofte have fewer resources ad less expertse to hadle the b oe should t occur. As a result, ths study cocludes that small besses, lke ther larer couterparts, should adopt sophstcated crss maaemet plas. Ths cludes the formato of a crss maaemet team, the detfcato of worst-case scearos, the practc of mock dsasters, ad the uprad of these plas as eeded. These results come from a moderately szed sample ad a smple statstcal aalyss. At ths level, t ca be see that sfcat dffereces exst betwee both the expectatos ad the expereces of besses the two coutres. However, a larer data set, draw from a larer cross-secto of both coutres, would strethe the fds; the coclos jtfy such a effort. Addtoally, further statstcal aalyss of the preset data set s possble. Refereces Barto, L. (1993. Crss orazatos: Maa ad commucat the heat of chaos. Ccat: South-Wester Publsh Co. Caporo, J. (1998. The crss couselor: The executve s ude to avod, maa, ad thrv o crses that occur all besses. Southfeld, MI: Barker Bess Books, Ic. Caporo, J. R., (2000. The crss couselor: A step-by-step ude to maa a bess crss. Chcao: Cotemporary Books. Chasta, C. (2000. Reroup, rebuld, ad rema: Dsaster recovery from a small bess perspectve. Cotecy Pla & Maaemet, 5 (1, Coombs, W. (1995. Crss respose stratees: A exploratory study. Proceeds of the 3 rd Aual Coferece o Crss Maaemet, Las Veas, Nevada. Cradall, W. (1997. How to choreoraph a crss. Securty Maaemet, Aprl, Cradall, W., McCartey, M., & Zemowcz, C. (1999. Iteral audtors ad ther perceptos of crss evets. Iteral Audt, 14 (1, Daels, C. (2002. Cofessos of a embezzler, FBS- Fortue Small Bess, May Fk, S. (1986. Crss maaemet pla for the evtable. New York: AMACOM Gorsk T. (1998. A blueprt for crss maaemet. Assocato Maaemet, 50 (1, Hartley, R. (1993. Bess ethcs: Volatos of the publc trt. New York: Joh Wley & Sos. Hckma, J., & Cradall, W. (1997. Before dsaster hts: A multfaceted approach to crss maaemet. Bess Horzos, 40 (2, Irve, R., & Mllar, D. (1997. Multply the effects: Factors fluec meda coverae of bess crss. Proceeds of the 6 th Aual Coferece o Crss Maaemet, Las Veas, Nevada.

14 Kovoor-Msra, S., & Natha, M. (2000. Tm s everyth: The optmal tme to lear from crses. Revew of Bess, 21 (3, Kre, C. (1993. Dsaster plas stads the test of hurrcae. Persoel Joural, 72 (6, Marc, A., & Goodma, R. (1991. Vctms ad shareholders: The dlemmas of preset corporate polcy dur a crss. Academy of Maaemet Joural, 34 (2, Marra, F. (1998. Crss Commucato plas: Poor predctors of excellet crss publc relatos. Publc Relatos Revew, 24(4, pp McCartey, M., Cradall, W., Zemowcz, C. (1999. Why pla for someth bad f t may ot happe? (Or- s crss maaemet stuff jt aother fad?, Iteral Audt, 14 (1, Meyers, G., & Holha, J. (1986. Whe t hts the fa: Maa the e crses of bess. Bosto: Houhto Mffl. Mtroff, I., Pauchat, T., & Shrvastava, P. (1989. Crss, dsaster, catastrophe: Are you ready? Securty Maaemet, February, Mtroff, I.I., (1989. Proramm for crss cotrol. Securty Maaemet, October, Offer, J. (1998. Pessmst s charter. Accoutacy, 121 (4, Pauchat, T., Mtroff, I., ad Vetolo, G. (1992. The dal toe does ot come from God! How a crss ca challee daero stratec assumptos made about hh techoloes: The case of the Hsdale telecommucato outrae. Academy of Maaemet Executve, 6 (3, Pearso, C., & Mtroff, I. (1993. From crss proe to crss prepared: A framework for crss maaemet. Academy of Maaemet Executve, 71, Pedoe, R. (1997. Dsaster recovery are you prepared for bess dsrupto? Lo Islad Bess News, Nov. 3, Perose, J. (2000. The role of percepto crss pla. Publc Relatos Revew, 26(2, Rchardso, B. (1995. Crss maaemet ad crss stratey Tme to loop the loop? Proceeds of the 3 rd Aual Coferece o Crss Maaemet, Las Veas, Nevada. Salero, C. (2000. Walk o sushe. Cotecy Pla & Maaemet, 5 (3, Shrvastava, P. (1993. Crss theory/practce: Towards staable developmet. Idtral & Evrometal Quarterly, 7(1, Smbo, A.K. (1993. Catastrophe pla ad crss maaemet. Rsk Maaemet, 40 (2, Smth, D. (1990. Beyod cotecy pla: Towards a model of crss maaemet, Idtral Crss Quarterly, 4(4, p Warwck, M. (1993. Dsaster recovery: Come hell or hh water. Commucato Iteratoal, 20 (10, Wlderoter, D. (1987. Crss Maaemet : A New Pla Is Necessary. Natoal Uderwrter (Property/Casualty/Employee Beefts, 91(33, & Wek, R. (2000. Help employees recover. Cotecy Pla & Maaemet, 5 (4,