Magazine article Risk Management

Corporate Terrorism: Managing the Threat

Magazine article Risk Management

Corporate Terrorism: Managing the Threat

Article excerpt

Terrorism, the systematic use of fear, violence or intimidation, has been employed for centuries by individuals and groups as a means to an end. And, as recent events have demonstrated, it is no less popular today. Perhaps never before in the United States has the threat of terrorism been so imminent.

According to the Bureau of Alcohol, Tobacco and Firearms, the use of explosives, incendiary devices and bomb threats against individuals and organizations in this country increased 55 percent from 1990 to 1994. As vast and unpredictable as the threat of terrorism may seem it is an exposure that risk managers should understand and work to mitigate.

The term terrorism stems from the Latin verb "to frighten." Terrorist acts are designed to instill deep and overpowering fear and are usually extremely effective, evelyn when the terrorist's primary objective is not achieved. Whether the target is a corporate or governmental entity, all forms of terrorism ultimately share a common denominator--power. Factors such as revenge, extortion, political ideology, thrill-seeking or psychotic delusion may influence a terrorist's motives, but terrorism can be understood essentially as one party's attempt to gain power over another.

The idea of terrorism evokes images of the Oklahoma City catastrophe and the recent bombings in Israel and London. But the tools used by terrorists are not limited to bombs; they are often far more subtle. Postal and electronic mail and the telephone are increasingly popular. Slander and misinformation campaigns, while not physically destructive, can damage an individual or an organization's reputation. Terror campaigns can be waged on a personal level in both the public and private sectors through stalking or threats of bodily harm.

Individuals or groups of executives, buildings, products and even corporate identity can become targets. For years, one U.S. company has been plagued by a systematic cam paign to link its corporate logo to Satanist groups in an attempt to instigate consumer boycotts and damage the company's market share. This type of campaign does its damage by spreading distortions that prey on public fears and misconceptions.

Product tampering, another form of corporate terrorism, has resulted not only in serious injuries and deaths but also in triggering widespread public fear. Tainted products, or even mere rumors of them, can inflict tremendous economic loss on a company through subsequent product recalls, consumer boycotts or lawsuits.

On a larger scale, terrorism is aimed at the destruction of public and private property, particularly buildings or objects with significant symbolic value. In the most extreme cases, the target is human life.

In light of recent world events, risk managers may wonder whether terrorists are lurking around every corner. Virtually no organization, public or private, is immune to terrorism; however, terrorism is not as widespread as some may believe. An organization should not dismiss this threat but rather increase management's and employees' fundamental awareness of the issue so it can identify and deal with potential threats. Risk managers can lead this effort by being proactive.

Assessing the Risk

The first action a risk manager can take in protecting his or her organization against a terrorist act is to understand its level of exposure to attacks against employees, products or property. A risk manager has a thorough knowledge of his or her organization's business and the publics it serves, but what about those it angers or offends? No organization is an island--from the museum showing a radical art exhibit to the pharmaceutical manufacturer testing a controversial new drug--few entities conduct their activities without generating some level of conflict with external groups.

To learn about existing conflicts, risk managers should consult individuals in their organizations who manage issues and communicate regularly with external audiences, such as salespeople, legal and public affairs personnel, receptionists and security staff. …

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