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Terrorism Effects on Businesses
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Terrorism Effects on Businesses
Abstract
Different factors and elements within our business environment continue to affect and control ways in which businesses operate and most important consequences that they encounter and face. Terrorism has been a significant issue that affects organizations where in most cases, it negatively impacts these businesses. As a result, terrorism has become a strong consideration in ways that these businesses operate.
Introduction
The nature of terrorism has been changing constantly thus having different impacts on the world. For many years now, terrorism has been and continues to be a problem facing states, communities, and also organizations in terms of their performance. Although there have been initiatives and global shifts towards democracy, terrorism targeting businesses continue to be a significant consideration at an alarming rate (Arif & Suleman, 2017). Most firms in different countries have been victims of activities related to terrorism which include bombings, extortions, kidnappings and other criminal acts that are serious and may result in negative consequences to those involved as subjects.
Currently, most managers and leaders lack essential and formal training techniques that are required to launch programs that are proactive to protect assets and other people within an organization against any form of potential terrorist acts. As a result, there is a great need for organizations to understand different ways in which terrorist attacks pose risks to people, technology and most important their properties in general. The effects of terrorisms particularly on most organizations have negative impacts that have in turn affected performance and also hindered most of the organizations form to achieve their goals and most famous moving towards their aims to ensure success in general. These terrorist activities have different ways in which they affect businesses and also techniques in hinder performance and operations in general. The following are common impacts of terrorism on companies and their performance;
Direct Economic Destruction
Environmental destruction can be considered as the most measurable and immediate impact in consideration of terrorist activities in general. Terrorism activities involve the removal of machines, economic resources, plants, transportation, and other systems together with workers. Different size of organizations is usually affected by the actions thus hindering business operations which would in turn results in losses of capital and investments thus hindering effectiveness and significant changes within businesses (Gross, Canetti & Vashdi, 2016). Big and international organizations end up having lost or even risk being closed down in general. Terrorism results in negative impacts which will be contributed as a result of physical destructions of properties. Productive resources that are essential in the generation of services and goods that would be valuable to an organization are typically destroyed. In this case, terrorism will not create any wealth or even add to the living standard in any way. Therefore, the impact will be negative in consideration of the growth and development of the general economy and businesses that have been affected both directly and indirectly.
Increased Markets’ Uncertainty
Terrorist attacks have both direct and indirect impact of people depending on how close and impacts of these activities to them in general. Typically, there is no market that like uncertainty and in most cases, terrorism will result in uncertainty in different markets. In some cases, terrorist activities result in the closing of financial markets which may take a long time to recover. With the increase of threat and publicity in consideration of global terrorism, most markets have become more resilient (Santana-Gallego, RossellÃ-Nadal & Fourie, 2016). The real threat when it comes to global terrorism in consideration to the perspectives of investors is mainly a broader picture and not only incidences that can be related as personal. Terrorism activities have resulted in low international corporation and investments in most of the world and most important those that have been affected by terrorist activities.
Effects on Trade, Insurance, Foreign Direct Investments, and Tourism
Tourism and insurance sectors are the two main and most vulnerable industries when it comes to the effects of terrorism. Consequently, not all insurance firms are held responsible for paying out events of international terrorism and other foreign wars. Therefore, the impacts, in this case, will not be huge to some of the insurance organizations (Bader, Reade & Froese, 2016). But in general, terrorism can be considered as a risky business for most people and organizations, and it is clear that most insurance organizations tend to hate any case that may result to any risks among those involved. In most states, terrorists account for approximately ten percent of the total gross domestic products. Therefore, these activities will significantly lower the rate of investments in a given state thus affecting business operations and a country’s incomes in general.
To some cases, terrorism will result in negative impacts on international trade. This case occurs mainly form threats that are imminent and may include compromised routes of business and other systems used for distributions or even in some cases reactions that can be either physical or psychological to terrorism. This case will significantly result in less Foreign Direct Investments in most of the states that are not stables due to terrorist activities.
War is the Health of States
This effect is related mainly to political which mean that in times of conflicts, a government that is reactive and citizens that are no nervous will be inclined with a primary aim of giving up economic and most influential political freedoms to exchange it with security. The impacts, in this case, will be an increased rate of taxes among people, deficits that would be improved and also high inflation. Terrorism may force the government to impose price control and even in some cases consider nationalization of organizations.
Typically, the most governments are not capable when it comes to resource management to ensure a productive economic activity than most of the private individuals particularly in cases where resources are co-opted with a primary objective of achieving particular strategic military aims in general (De Clercq, Haq & Azeem, 2017). Militarization through the government will significantly result in the private economy suffering. Most controls in consideration to most government tend to stay in place long after campaigns ends that are related to the military.
Increased Foreign Skepticism and Nationalism
Political risks are another risk that affects the economy and businesses through terrorism. There has been an increased case of skepticism regarding cultures from foreign states, immigrant workers, businesses and also refugees. Most of the significant political events that affect people and different countries have thus had a more substantial impact and uncertainty in consideration to business and economic fallout which will affect different elements that include diplomacy, trade and also the currency in a given state.
Closing border and controlling immigrant workers due to factors that may include prevention of terrorist activities tend to tor decrease the size and most important diversity of transaction that is related to an economy which will in turn limit resources that are productive thus affecting business and their operations in general (Ahmad, Shahzad & Rehman, 2016). Typically, division of labor and also gains in consideration to different forms of trade generally have limited the size of production through available factors. A single town or even a household will be less productive particularly in cases where internal resources have been relied on in general. In some case in this case, applied to national economies will limit themselves with a primary aim of limiting external producers and most essential consumers in general.
While chances of getting in activities that involve terrorist remain low, there is a great need for organizations to understand, related and also come up with practical and reliable ways in which they can improve security to ensure improved performance and success of the operations in general. Therefore, it is essential for them to understand ways in which they can respond to these challenges when affected both directly and indirectly (Tingbani, Okafor, Tauringana & Zalata, 2019). This will help to ensure improved performance and allowing organizations to effectively related, manage and control operations that would, in turn, ensure they archive their goals, objectives and most important the roles that they have to societies and states in general.
Conclusion
Although there have been regulation, policies, and laws most government and international organization have considered to ensure significant changes and controlling security issues positively, terrorism has continued to be a substantial issue affecting people, government operations, international business activities, and services. Therefore, business needs to understand ways in which they will protect themselves, their workforces and most crucial function and ensure that they move towards their targeted objectives roles and also to improve performance. In this regard, it will ensure that business can reduce the risks of terrorist activities and most important ensure that they can reliably and effectively move towards their targeted, developments and also the management of economic elements within a particular state.
References
Ahmad, T., Shahzad, S. J., & ur Rehman, M. (2016). Risk or sentiment: Value and size premium under terrorism. Pakistan Business Review, 17(4).
Arif, I., & Suleman, T. (2017). Terrorism and stock market linkages: An empirical study from a front-line state. Global Business Review, 18(2), 365-378.
Bader, A. K., Reade, C., & Froese, F. J. (2016). Terrorism and expatriate withdrawal cognitions: the differential role of perceived work and non-work constraints. The International Journal of Human Resource Management, 1-25.
De Clercq, D., Haq, I. U., & Azeem, M. U. (2017). Perceived threats of terrorism and job performance: The roles of job-related anxiety and religiousness. Journal of Business Research, 78, 23-32.
Gross, M. L., Canetti, D., & Vashdi, D. R. (2016). The psychological effects of cyber terrorism. Bulletin of the Atomic Scientists, 72(5), 284-291.
Santana-Gallego, M., RossellÃ-Nadal, J., & Fourie, J. (2016). The effects of terrorism, crime and corruption on tourism. Economic Research Southern Africa (ERSA), 595, 1-28.
Tingbani, I., Okafor, G., Tauringana, V., & Zalata, A. M. (2019). Terrorism and country-level global business failure. Journal of Business Research, 98, 430-440.
