EVERY WEEK AN AVERAGE OF TWO BUSINESSES SUSTAIN SOME SORT OF TERRORIST ATTACK ON AMERICAN SOIL. WHILE TERRORISM REPRESENTS ONLY A SMALL PROPORTION OF CRIMES AGAINST BUSINESS, TERRORIST ACTIVITIES ARE GENERALLY HIGHLY VISIBLE AND THREATENING AND CAN CONSEQUENTLY HAVE A FAR-REACHING AND LONG-LASTING IMPACT. A BREAKDOWN OF TARGETS OF TERRORIST ACTIVITIES DURING 1976 INDICATES THAT 96 PERCENT OF SUCH ACTIVITIES WERE AGAINST BUSINESS TARGETS. BOMBING, THE LEAST LIKELY TO RESULT IN APPREHENSION, IS THE MOST COMMON FORM OF TERRORIST ATTACK. ALTHOUGH SMALL ARMS ARE READILY AVAILABLE, AND TERRORIST WEAPONRY HAS TENDED TO BE SIMPLE, MORE SOPHISTICATED TERRORIST MEASURES ARE BECOMING INCREASINGLY LIKELY AND COULD INCLUDE SOME NUCLEAR THREAT. THE CORPORATION IS A VULNERABLE AND HANDY SCAPEGOAT FOR THE ILLS OF SOCIETY; IT CAN ACT MORE QUICKLY TO MEET TERRORIST DEMANDS THAN CAN GOVERNMENT; AND IT IS OFTEN VIEWED AS A SURROGATE FAMILY OF THE EXECUTIVE. THESE FACTORS MAKE CORPORATIONS PARTICULARLY ATTRACTIVE AS TERRORIST TARGETS. CONTRARY TO THE USUAL IMAGE, TERRORISTS CAN ATTAIN SIGNIFICANT POLITICAL ENDS WITH THEIR ACTIVITIES, AND THEY ARE USUALLY FAIRLY WELL-EDUCATED AND RATIONAL. THEY SHOULD NOT BE UNDERESTIMATED, NOR SHOULD STEREOTYPES BE ALLOWED TO BLOCK NEGOTIATIONS WITH THEM. COMPANIES FACED WITH TERRORIST DEMANDS SHOULD NOT CAPITULATE IMMEDIATELY TO DEMANDS. NEITHER SHOULD THEY FAIL TO ESTABLISH COMMUNICATION WITH TERRORISTS OUT OF CONFUSION OR AN INABILITY TO MAKE DECISIONS, NOR ABDICATE THEIR NEGOTIATING POSITION TO THE GOVERNMENT OR OTHER THIRD PARTY. A CORPORATION FACED WITH TERRORIST DEMANDS SHOULD IMMEDIATELY CONTACT FEDERAL AGENCIES, CONFIRM THAT A KIDNAPPING HAS IN FACT TAKEN PLACE AND THAT THE HOSTAGE IS STILL ALIVE, AND ATTEMPT TO NEGOTIATE A RANSOM PRICE WHILE KEEPING LAW ENFORCEMENT AGENCIES FULLY INFORMED OF THE SITUATION. PRINCIPLE STEPS IN IMPROVING CORPORATION SECURITY FROM TERRORIST ATTACK INCLUDE: TIGHTENING VISITOR CONTROL PROCEDURES THROUGH IDENTIFICATION MEASURES AND SURVEILLANCE SYSTEMS; DEVELOPING DISASTER POLICIES AND PLANS AND CONTINGENCY GUIDELINES; AND RETAINING EXECUTIVE SECURITY CONSULTANTS. AMERICAN EXECUTIVES ABROAD SHOULD BE ENCOURAGED TO MAINTAIN LOW PROFILES AND EXERCISE CAUTION, PARTICULARLY DURING TRAVEL. A LISTING OF MAJOR TERRORIST ORGANIZATIONS AND GROUPS IS ALSO PROVIDED. (JAP)