The latest series of international "shocks" - the truck attack in Nice, the mall shootings in Munich, an attempted coup in Turkey, massacres in the US and Brexit have alarmed the world.

That alarm should trigger New Zealand companies to review their relationships with overseas trading partners, and prepare their own international business continuity and market exit strategies, says University of Auckland researcher Dr Bridgette Sullivan-Taylor.

With the current instability and political unrest in Europe and the United Kingdom, the reality of interconnectedness means many New Zealand businesses trading in those markets will be affected.

"Many companies react by adopting a 'fatalistic' or defensive approach," says Sullivan-Taylor, a Senior Lecturer in Strategy and International Business at the University of Auckland Business School. "However, companies should be constantly reviewing their risk assessment exposure levels and not be complacent.
"As soon as a situation happens like in Nice or Turkey, it's a disruption to normal working practice, so your business needs to be adaptable and resilient to cope with that, and for speedy business recovery."

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In the past month, she says, Europe has been shaken by two "major exogenous shocks" or "Black Swan" events - unexpected or unpredictable events occurring outside an industry that have a dramatic effect on an economy.
The first was the Brexit vote to leave the European Union, then the Bastille Day terrorist attack, where a truck driver killed 84 people in Nice. "It's becoming more evident there are no barriers to what terrorists or extremists are prepared to do," Sullivan-Taylor says.
"You have political instability at the macro regional level, and then you have extreme political unrest. It's all very destabilising.
"So New Zealand companies that have international relationships need to have business continuity plans and market exit strategies in place for when events like this happen. They need to be thinking about their contingencies, including the wellbeing of the people they have on the ground there.

"The question is who is going to help the Kiwi companies if something goes wrong? The New Zealand government's footprint is small in most countries."

The Nice attack proved that low-tech, soft target terrorism - much harder to predict or prevent - is a growing threat.

Sullivan-Taylor helped advise the UK's Department for Culture, Media and Sport in the lead-up to the 2012 London Olympics regarding a joined-up approach to resilience across the UK tourism and leisure supply chain.
She says "hard targets" like airports and military bases already have security infrastructure, but "soft targets" such as shopping malls and crowds at major events are more vulnerable. Tourism levels in France will be immediately affected in areas where recent attacks have occurred.

The use of a truck as a weapon in Nice could lead to increased security checks of vehicles at border crossings in Europe, and affect the flow of goods and services, Sullivan-Taylor predicts.

"New Zealand companies that outsource their international supply chains and logistics need to be mindful of any reputational damage by default. There needs to be much tighter surveillance by New Zealand head offices back here about what's going on in Europe , and constantly assessing the risk exposure," she says. "That may mean more investment in goods and in employees. Most New Zealand companies won't have prepared for that, when it's already very expensive for them to operate in the UK and Europe."
New Zealand has a strong record of business with Europe, with $8.7b in exports last year. France is New Zealand's third-largest individual trading partner within the EU focusing on technology - particularly banking and healthcare software, telecommunications and high-end food and wine.

Sullivan-Taylor has conducted research for New Zealand Trade and Enterprise in London, examining the challenges faced by New Zealand organisations exporting to the UK and European markets, and stresses the need to go the extra mile to connect with local agencies in the country they are operating in.
Keeping up to date with the UK Government's overseas business risk register and attending local resilience forums is important to identify any vulnerabilities and keep your business contingency plans relevant to current risks.

Before the Brexit vote took most of the world by surprise, there was "a feeling of comfort, stability and security" for New Zealand traders in an integrated European political landscape.

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"Now it is not stable, everything is in flux, there is a crisis of confidence within and across the European region at the political level which has direct effects on the economic landscape which is worrying if you are doing business over there," she says. "New Zealand doesn't want to be left exposed. We need to demonstrate that we are extra reliable, flexible and prepared."

At the University of Auckland Business School, Sullivan-Taylor is conducting research on the strategic resilience of New Zealand businesses in the face of extreme events, building upon work she conducted at Warwick and Aston Business Schools.
From the study, she will publish findings which reveal the challenges that business continuity managers and risk managers in the UK and France face. "It's often an impossible job as they are damned if they do and damned if they don't, due to the unpredictable nature and scale of extreme events."