Vulnerability and URs Impacts

Vulnerability can be defined as the manifestation of the inherent states of the system that can be subjected to a natural hazard or be exploited to adversely affect that system (Aven, 2011). Vulnerability is a key term that is sometimes taken to mean the opposite of robustness or resilience. Hence, it is relevant to delineate vulnerability as well. Vulnerability in the context of Agarwal et al. (2007), indicates a potential to experience con-sequence which is disproportionately large compared to the amount of damage or perturbation causing it. However, vulnerability according to Asbjørnslett and Rausand (1999) refers to the properties of a system that may weaken or limit its ability to endure threats and survive accidental events that originate

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both within and outside the system boundaries. Similarly, vulnerability is also considered as the inability of an object to resist the impacts of an unwanted event and to restore it to its original state or function following the event (NS5814, 2008). Furthermore, ISO Guide 73:2009 defines vulnerability as “intrinsic properties of something resulting insusceptibility to a risk source that can lead to an event with a consequence” (ISO, 2009).

Also, vulnerability is viewed as an error or a weakness in the design, implementation, or operation of a system (Light, 2005). While the views on what constitute vulnerability vary from discipline to discipline, there are four sources of vulnerability that face organisations today, which many organisations are not paying attention to. According to Light (2005), sources of vulnerability are ignorance, inflexibility, indifference and inconsistency. Organizational ignorance which directly impacts ability to measure results, strengthen program evaluation, and setting clear incentives for high performance. The second factor centres on the three characteristics that reduce organizational inflexibility; delegating authority for routine decisions, embracing participatory leadership, and fostering open communication.

The third factor converged on the three characteristics that confront organizational indifference include; surveying customers regularly, investing in new ideas, and setting strong incentives for high performance. The fourth factor focused on characteristics that counter inconsistency, which includes; reducing the barriers between units, strengthening information technology, and increasing access to information. One final characteristic; sharpening the mission, was found in all four factors, confirming that organizational purpose is the centrepiece for both addressing vulnerability and producing value when it is well aligned with and influenced by the understanding that UR events have the potential to impact organisation significantly. These sources are illustrated in Figure 2.5.

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Figure 2.5 Sources of Vulnerability (Adapted from Light, 2005)

The argument of Light (2005) is based on the basis that lack of attention to longer-range threats and opportunities (ignorance) or in this case threats and risks that may have severe impacts like URs, subsequently make organisations prone to the impact of inevitable. This line of argument is also applied to the rationale for organisations to create the capability to move quickly to hedge against vulnerability or exploit new markets (inflexibility), a process which may not enable them devote and design resilience strategies based on effective risk management strategies (Light, 2005).

Although investing in research and development needed to bring new products to scale (indifference) may be good strategic move and venture in pursuit of organisational success, such initiative needs to be carefully undertaken without making the organisation more prone to the impact or occurrence of UR events. The future is considered as unknown in many cases even though organisations have long-term vision and milestones for achieving organisational goals. However, this require careful deliberations and actions that should be undertaken tactically without aligning the organisation to move as whole towards a hope-for future direction, a move that may lead to inconsistency (Light, 2005), thereby making the organisation vulnerable to external and internal perturbations. As such, many organisations are poorly designed and often engage in activities that may them less prepared to respond to the changes that they face, whether because of ignorance, inflexibility, indifference, or inconsistency (Light, 2005).

In this way, Hopkin (2010) posited that for an organisation that is in the start-up phase, a more aggressive attitude to risk is required than for an organisation that is enjoying growth or one that is a mature organisation in a mature marketplace. This is because the attitude to risk has to be

Vulnerability Ignorance

Inflexibility Indifference

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different when an organisation is a start-up operation compared with a mature organisation (Hopkin, 2010). Furthermore, organisational systems are thereby subjected to a broad risk environment and an unpredictable future characterised by internal and external risks and uncertainty (Burnard and Bhamra, 2011) and the ability to reduce vulnerability to URs. Thus, this section has indicated that impacts of URs can be externally and internally generated in society and in organisations (Roux-Dufort, 2007) and its impacts can be severe in an organisation, while the mitigating actions of an organisation in dealing with UR can potentially affect the survival of another organisation (Treasury, 2004). However, adaptive capacity and resilience culture of any organisation may enhance response and risk management strategies for dealing with URs in organisations without triggering a ripple effect on another organisation (Liu et. al., 2011). A strategy which Davies and Walters (1998) liken to crisis-prepared organizational culture.