Businesses are very easily affected by the environment that surrounds them. For South Korea, the Sewol Ferry Disaster that occurred on April 16th, 2014, proves this theory to be true.
A ferry with 476 passengers – mostly high school students – left for Jeju Island, a popular Korean tourist destination. However, when the ferry started to slowly sink to its side at the southwest coast of South Korea, no significant rescue attempts were made to save the students and passengers trapped inside until it was fully submerged. This ferry accident is not merely just an “accident”. Many South Koreans believe the disaster occurred because of the evils in South Korean government (read more here) which makes the situation harder- or virtually impossible- to simply move past.
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With the South Korean citizens mourning the losses of this tragic and unjust incident, the South Korean economy took a hit in many sectors:
Tourism – Many field trips and school events were delayed, and some tour companies had half of their reservations canceled as of April 18. Also with School Boards banning school trips, more than 70,000 airline tickets were cancelled
Retail – With retailers avoiding marketing to pay respects to South Korean citizens, many major retail companies have seen a great decrease in sales. For CJ O Shopping, a large South Korean retail company, sales fell a record of 20% after the disaster.
Entertainment – Many South Korean television shows and dramas were put on hold to not only pay respects, but to allow more air-time for the news. This critically affected the media sector of the Korean economy, as they waited for weeks to resume normal scheduling.
With external factors being able to damage companies significantly, it is up to each company to be prepared to handle emergency situations with care and knowledge.
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