The impact of terrorism in today’s business
History proves that terrorism has affected different levels of society in the world. Terrorism as means to compel people to follow through the use of force or threat has become the center of attraction of the globe in the most recent modern history. The September 11, 2001 attacks in New York have played a significant role in molding the views of the people towards terrorism. Either make or break a nation, or create a leader or be the leader, in all cases, one thing is certain: terrorism has touched every part and every level of the world community, form the countries to its governments, down to its people, with positive and negative aftermath in between.
Looking at the status quo, the business sector is one of the levels of the society that is being greatly affected by terrorism. Disruption and destruction of ongoing businesses as the primary goal of terrorism has undoubtedly challenged and threatened business activities of different countries. Basically, there are different sectors of business that should be examined but there are three primary sectors of business that needs closer scrutiny to detect the effects of terrorism on the business world as a whole. The stock market is the first sector that needs analysis. Like the other sectors of the business environment, stock markets are being directly affected by terrorism. Even before the attacks, investors often flee the market to ensure safety in financial instruments as soon as they received news about terrorist attacks. Consequently, panic selling occurs and creates deficiency on the part of the stock owners. Similarly are the effects after these terrorist attacks. Decline in stock markets becomes evident as response to the attacks. However, it seems that terrorism does not create long term effects on these markets. Stock markets start to become resilient and manage to recover in a relatively short period of time. In fact, after every terrorist attack in the recent years, stock markets even become more stable and efficient, providing greater confidence for increased participation. Another sector that is being hurt by terrorism is the tourism industry. The number of tourist arrivals reduces as the threats of terrorist attacks in the world increases. Over time continued terrorist attacks also cause indirect costs and damages (Larobina, n.d; Pate, n.d). These expenses include expenses in improving advertisements and security enforcements to attract new or more tourists (Larobina, n.d; Pate, n.d). In connection with tourism industry, another sector of business is being affected by terrorism. As mentioned earlier, terrorist threats decreases the number of tourist arrivals. For this reason, domestic flights of the target country decline while international flights increase, reducing the income of the tourism industry as well as the aviation industry. These two industries play a vital role in maintaining the economic stability of most countries in the world, especially the ones which belongs to the developing countries bracket. Aside from the losses of the tourism industry, the cost of oil also affects the aviation sector. Because of civil unrests in the Middle East today, major disruption in oil supplies occurs, driving oil price higher. Increase in the cost of fuel poses indirect effects upon airline companies, adding to the expenses aviation industry have incurred in the recent years. To recover these expenses, the aviation sector will put the burden to their passengers, making it more problematic for it will reduce more the number of tourist arrivals. Increase in terrorism activity boils down to a definite loss to the tourism industry; likewise, damage to the tourism industry is tantamount to threat to the airline companies. Generally, just like the stock market, the tourism sector as well as the aviation sector both face challenges of terrorism; yet they manage to recover in the long run (Larobina, n.d; Pate, n.d).
Although terrorism has created a lot of threat and problems to the business environment, it is undeniable that the world is capable of recovering. Terrorism has affected different sectors of the society across the world community at different levels. Some sectors may have experienced greater damage but these sectors proved how resilient they are (Larobina, n.d; Pate, n.d). Needless to say, one of these sectors that have withstood the shock of terrorism without permanent damage is the business sector. Of course, this will not be possible without the help of the government. With proper and necessary support and assistance from the state, these sectors succeed to recover. Overall, the business sector was able and will be able to outlive despite the disruption and destruction of terrorism.
List of References
Larobina, M and R. Pate n.d., The Impact of Terrorism on Business, accessed May 29, 2011, http://findarticles.com/p/articles/mi_hb6054/is_200904/
ai_n32319736/
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