Understanding social amplification of risk : possible impact of an avian flu pandemic

Abstract

Today, stakeholders expect organizations to be able to endure external shocks. Hence, the real potential of an avian flu pandemic has many corporations developing business continuity plans for the disruptions that a pandemic may cause. For the pharmaceutical/biotechnology industry, the major concerns of a pandemic include high employee absentee rates, lack of accessibility to the medical facilities, and disruption to the product supply chain. This work introduces social amplification of risk theory to evaluate the potential impact of a pandemic to a business due to heightened fear. It uses a case study of Genzyme Corporation and evaluates pandemic related risks to two of its major products. By applying a system dynamics framework to evaluate the mechanisms for the amplification of risks, a solution is proposed. The lessons introduced in this work can help organizations evaluate the true risks of catastrophic events.