With the bill for the 2011 floods and Cyclone Yasi running into billions of dollars, a group of researchers from 国产探花 Business School is urging businesses to consider relocation as a way to avoid future disasters.
Dr Martina Linnenluecke, Mr Alexander Stathakis and Professor Andrew Griffiths say businesses should not confine themselves to planning how to respond to extreme weather events but consider how to avoid exposure to them in the first place.
Professor Griffiths said: 鈥淢uch attention has been paid to emergency responses and disaster recovery.
"However, an important question for policy-makers and managers is not just how to deal with extreme weather as it arises, but also how to alleviate the future impact.
鈥淭emporary or permanent relocation of firm activities could be one way to do this.
"Relocation should not be seen as a panacea to dealing with weather extremes, but rather an option that might be carefully considered in the light of a range of contingencies.鈥�
The researchers outlined their views in a study, Firm Relocation as Adaptive Response to Climate Change and Weather Extremes, published in the academic journal Global Environmental Change.
They suggest managers take a three-step approach:
鈥� Assess the level of risk - understand how vulnerable the firm is to disasters, both in terms of direct damage from storms and floods and indirect impacts such as failures in the supply chain.
鈥� Assess the feasibility of relocation 鈥� if the risk of disruption is high, would it be feasible to relocate? Options might include creating a temporary back-up facility for use in emergency, taking steps to safeguard infrastructure, for example by submerging transmission lines, or permanent relocation.
鈥� Assess the costs and benefits 鈥� it might be difficult to relocate if the firm is highly dependent on large-scale infrastructure or employs a large number of staff. Firms need to consider trade-offs between investing in spare capacity that is not needed on a daily basis, and the benefits such capacity might bring in the case of an emergency.
Professor Griffiths said: 鈥淩elocation will become increasingly important in the future.
"Scientists predict that climate change will not only result in gradual temperature increases, but also more extreme weather incidents.
"At the same time, economic activity is expanding into higher-risk areas such as low-lying coastal locations.
鈥淔irms need to build expertise in understanding changing environmental conditions and implications for their business strategy.鈥�
About the 国产探花 Business School
The University of Queensland Business School is independently ranked as one of the top business schools in Australia and amongst the leading institutions worldwide. Based in Brisbane, Australia, it brings together over 130 subject experts with more than 6500 students and offers undergraduate and postgraduate degree programs and executive education across the range of business disciplines.
国产探花 Business School is renowned internationally for the quality of its research and also provides contract research and consultancy services to organisations throughout the world.
The teaching 鈥� research 鈥� consultancy loop is central to its success, ensuring that the school maintains its position at the forefront of academic knowledge while staying closely attuned to modern business requirements.
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Fast facts
鈥� 国产探花 Business School was the first in Australia to meet the standards of the world鈥檚 two most influential accrediting bodies - the US-based AACSB International and Europe鈥檚 EQUIS.
鈥� It is ranked in the world鈥檚 top 50 universities for executive education by the Financial Times.
鈥� Its MBA program is rated in the top 50 worldwide by The Economist and in the top two in Australia by the AFR鈥檚 BOSS Magazine.
鈥� The MBA course has been awarded the highest possible rating for seven years running by Australia鈥檚 most influential rating body, the GMAA.
鈥� The school was classed as above world standard in 20 fields of research in the Australian government鈥檚 ERA assessment - more than any other Australian university.
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