SMEs defending their businesses from flood risk

Contributing to the theoretical discourse on resilience

Authored by: Bingunath Ingirige , Gayan Wedawatta

The Routledge Companion to Risk, Crisis and Security in Business

Print publication date:  June  2018
Online publication date:  June  2018

Print ISBN: 9781138643109
eBook ISBN: 9781315629520
Adobe ISBN:


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Evidence suggest that flooding has become a significant threat affecting small and medium-sized enterprises (SMEs) in the UK. Previous research has identified vulnerability of SMEs to various disruptions and challenges. Their vulnerability to disruptions arises virtually by definition because of the small scale of their human and financial resources (Bannock, 2005). For instance, research has found that SMEs suffer the most in times of crisis and are the least prepared of all organisations (Ingirige et al., 2008) hence an important proponent in crisis and security of business. Flooding in many forms is expected to further increase in frequency and severity in future due to climate change impacts (Environment Agency, 2005; Stern, 2007; Munich Re Group, 2008). Flooding can also cause both immediate and secondary impacts. SMEs can be severely affected not just by the immediate impact but also due to the sometimes ‘slow burning’ secondary impacts. Damage to business premises and resultant temporary and permanent business closures may result in loss of jobs, negatively affecting incomes and further hindering recovery efforts of local communities (Tierney, 2007) affecting the society at large. Such wider economic and social impacts are not normally accounted for in monetary terms, as opposed to direct physical damages in relation to flooding. Therefore, without a coherent strategy it is difficult for policy makers to address the overall consequences of flooding and improve their capacity of managing their risks better. This has become a growing problem and cannot be taken lightly. For example, a recent survey found that the financial cost of severe weather events to have been just under £7,000 on average for each affected SME out of a survey sample of 1,199 SMEs in the UK (FSB, 2015). This has necessitated that businesses, especially SMEs who are said to be highly vulnerable to flooding when compared with larger businesses (Crichton, 2006), implement various coping strategies in order to defend their businesses from flood risks and better prepare themselves to face the future flood risk. The aim of the chapter is to contribute to the theoretical discourse on resilience with specific reference to improving preparedness of SMEs against flood disasters in the UK. Thereby this chapter adds to the broader domain of crisis and security of business.

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