What is the purpose of contingency planning in risk management?

• A. Preparing for potential disruptions
• B. Increasing production capacity
• C. Reducing staff
• D. Outsourcing all operations

Answer: (A)

Contingency planning in risk management is about preparing for potential disruptions so the organization can respond quickly and keep operations going with minimal impact. It involves identifying plausible risks, pinpointing critical processes, and laying out clear steps, roles, and resources to activate when a disruption occurs. The goal is resilience and continuity—to protect stakeholders, maintain essential functions, and speed up recovery. While increasing capacity, reducing staff, or outsourcing might be part of a broader response, contingency planning itself focuses on being ready for what could go wrong and having predefined actions, not on pursuing those specific tactics.