Impact of logistical business continuity planning on operational capabilities and financial performance

Purpose – Organizations have long employed business continuity planning (BCP) to prevent disruption to their operations. The authors seek to extend existing theory by examining the impact of logistical business continuity planning (LBCP) – BCP in the context of logistics – on firms’ operational capabilities and financial performance. Design/methodology/approach – Using data of firms operating in the US transportation and warehousing industries, the authors empirically test LBCP's affect on their business units’ financial performance. Findings – The authors’ findings suggest that LBCP influences financial performance via improvement in logistical competitive capability and enhanced disaster immunity. Further, the findings indicate that when a firm employs mindful‐planning processes, an important element within LBCP, it can avoid the trade‐off between risk management and efficiency. The authors proffer that LBCP processes are dynamic capabilities because of improvement in logistical competitive capabilities and enhanced disaster immunity. Thus, when firms employ LBCP they gain a competitive advantage, which improves financial performance. Originality/value – This is the first research paper which establishes the link between LBCP and its logistical competitive capability, disaster immunity and financial performance.