Half of U.S. multinationals suffered a "showstopper" crisis in last 3 years

Published 20 December 2006

Whether the reason is globalization, natural disasters, or terorist act, nearly half of U.S. multinational corporations have suffered a major crisis during the past three years; companies not subjected to a showstopping event are confident in their business coniuity preparations; companies which suffered are less sure

A PricewaterhouseCoopers Management Barometer survey found that 49 percent of U.S.-based multinationals have been struck by a major “showstopper” or high-level crisis during the past three years. A showstopper is a significant event with catastrophic impact to one or more of their major business units or enterprise processes. Still, the majority claim recovery was swift with minimal financial consequences. Only half as many expect a crisis three years out, and concern is low. Those who suffered a recent crisis view their company as less well-prepared for the future.

Almost three-quarters of those experiencing a high-level crisis (71 percent) claim it had only a limited impact on their company’s bottom-line profitability. Only 20 percent report a moderate impact, and 6 percent, a major one.

Overall, 71 percent were pleased with their company’s resilience and performance in dealing with the crisis, including 26 percent describing the response as “outstanding” and 45 percent as “good/gets high marks.” Only one-in-four (26 percent) gave their company’s performance a mixed rating — “some good, some not.”

PricewaterhouseCoopers’ Miles Everson says: “Today’s business complexity increases the likelihood of an adverse risk event triggering failure. Moreover, because large multinational operations are interconnected and can be concentrated in terms of geography or supply chain, the potential impact of a failure is multiplied, as compared to the situations businesses dealt with only ten years ago.”

-read more in the PricewaterhouseCoopers survey