A BUSINESS CONTINUITY MANAGEMENT (BCM) FRAMEWORK FOR DISASTER RESILIENT SMES IN MALAYSIA

Small and medium sized enterprises (SMEs) play an important role in the economy of most countries, crucial in terms of social inclusion, local employment and innovation. In the developed world, such as the European Union, around 99 percent of economic activities can be traced back to SMEs, accounting for almost 66 percent of all jobs in the private sector. A similar scenario can be seen in the developing world where SMEs accounted for over 90 percent of all enterprises and over 50 percent of the Gross Domestic Product (GDP).

The impact of disasters on SMEs is very high throughout the world, including both developed and developing countries. Lack of disaster resilience due to financial and expertise limitations means the impact of natural disasters to SMEs in developing countries are worst compared to developed countries in terms of casualty and economic losses. To deal with the negative impacts of natural hazards, many SMEs in developed countries such as United Kingdom, Japan and New Zealand are using Business Continuity Management (BCM) as their disaster risk reduction (DRR) approach. However, in developing countries including Malaysia, BCM is used by large and multinational companies to deal with IT issues and crisis management, rather than to help them better prepare for dealing with the threat posed by natural hazards.

Therefore, the purpose of the study is to develop a BCM framework that can be used to improve the resilience of Malaysian SMEs. To develop the framework, seven interviews with academic experts, industry players and government agencies were conducted and a survey among 127 SMEs’ owners was conducted in order to examine the impacts of natural hazard to them and their understanding of BCM. Finally, once again expert interviews were conducted to validate the framework.

The results of this study show that the impacts of natural hazards are severe for SMEs in Malaysia and BCM can be used as an approach to reduce the impacts of natural hazards and to achieve disaster resilience but it must be affordable and understandable by the SMEs in Malaysia. In addition, the roles of stakeholders such as the government, private companies and NGOs are also significant for SMEs’ disaster resilience.