Crisis Management Planning among Tier 2 Automobile Suppliers: Why Suppliers Fail to Plan

One of the greatest threats facing automobile suppliers is a disruption to the supply chain resulting from a crisis. This paper explores why nearly two-thirds of Tier 2 automobile suppliers fail to plan for these substantial risks by comparing the identification of potential crises, and assessments of the risk of occurrence and impacts on the firm between suppliers that do and do not plan for potential crises. The results show that suppliers that do not plan identified fewer potential crises, and rated their risks and impacts lower. These assessments weigh heavily against the decision to develop crisis management plans, and are rated more important by suppliers than the cost of planning or the availability of resources to plan.