Abstract
Disaster preparedness is very important for business continuity, but the determinants of disaster preparedness in business organizations have not been explored much in existing research. Therefore, in this article we undertake to analyze the influences of organizational and decision makers’ characteristics on business disaster preparedness. In 1997, eight years after the Loma Prieta earthquake, the Disaster Research Center at University of Delaware conducted a large-scale mail questionnaire survey in Santa Cruz County, California, which was hard-hit by the 1989 earthquake. A total of 933 completed surveys from business organizations were obtained. Our analysis is based on this historical dataset. The results revealed that larger companies are more likely to engage in disaster preparedness activities, which is consistent with previous studies. Companies in finance, insurance, and real estate sectors tend to prepare more for disasters compared with wholesale and retail trade firms. Disaster experience has a significant and positive impact on business disaster preparedness, and the degree of lifeline loss can be a reasonable indicator of the disaster experiences of business organizations. One interesting finding is that the better a company’s financial condition is, the less it will engage in preparing for disasters. Finally, the risk perception of business owners or decision makers has a statistically significant and consistent positive effect on business disaster preparedness activities.
Highlights
Disaster preparedness is very important for business continuity, but the determinants of disaster preparedness in business organizations have not been explored much in existing research
The Disaster Research Center (DRC) at University of Delaware initiated a series of systematic studies with large and representative samples exploring the disaster-related experiences of business organizations in communities around the U.S between 1993 and 1998
In Dahlhamer and D’Souza’s (1997) studies using the data from Memphis/ Shelby County, Tennessee and Des Moines/Polk County, Iowa, the larger businesses were more likely to engage in preparedness activities than their small counterparts—size was the strongest predictor of preparedness among business organizations in both communities
Summary
Disaster preparedness is very important for business continuity, but the determinants of disaster preparedness in business organizations have not been explored much in existing research. The Disaster Research Center (DRC) at University of Delaware initiated a series of systematic studies with large and representative samples exploring the disaster-related experiences of business organizations in communities around the U.S between 1993 and 1998. Firm size Prior research suggests that the most consistent firm characteristic related to disaster preparedness is firm size, usually measured by the number of full-time employees Quarantelli and his colleagues (Quarantelli et al 1979) were among the first to address disaster preparedness within the commercial sectors. These studies revealed consistently that the size of a company is a strong predictor of its disaster preparedness
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