Sudden Crises, such as fires, explosions, natural disasters, workplace violence, etc; Smoldering Crises, problems or issues that start out small and could be fixed or averted if someone was paying attention or recognized the potential for trouble; Bizarre, like the finger in the Wendy's Restaurant Chili, a one-of-a-kind crisis; and, Perceptual Crises, such as the long-running problem Proctor & Gamble used to have with their former corporate logo, that included a half-moon and stars, which critics would claim were symbols of devil-worship, calling for boycotts of P&G products. (Smith & Millar, 2002)
The practice of crisis management involves attempts to eliminate technological failure as well as the development of formal communication systems to avoid or to manage crisis situations (Barton, 2001), and is a discipline within the broader context of management. Crisis management consists of skills and techniques required to assess, understand, and cope with any serious situation, especially from the moment it first occurs to the point that recovery procedures start.
Crisis management consists of methods used to respond to both the reality and perception of crises such as a Crisis Management Plan. Crisis management also involves establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms. It consists of the communication that occurs within the response phase of emergency management scenarios.
The related terms [emergency management] and [business continuity management] focus respectively on the prompt but short lived "first aid" type of response (e.g. putting the fire out) and the longer term recovery and restoration phases (e.g. moving operations to another site). Crisis is also a facet of [risk management], although it is probably untrue to say that Crisis Management represents a failure of Risk Management since it will never be possible to totally mitigate the chances of catastrophes occurring.
Crisis management is occasionally referred to as [incident management], although several industry specialists such as [Peter Power] argue that the term crisis management is more accurate. Incident or crisis? Why the debate?
The United Kingdom’s Department for Business, Enterprise and Regulatory Reform (2008), describes a crisis as "an abnormal situation, or even perception, which is beyond the scope of everyday business and which threatens the operation, safety and reputation of an organization. The department advocates that businesses treat crisis management planning with the same attention as other business plans. "... The crisis should be dealt with as an operational management issue that is simply being undertaken in extreme circumstances. The crisis management framework for response is normally based on existing management structures and responsibilities. It must also reflect (or improve upon) existing lines of communication, both within the company, and with other organizations which may be affected. This approach, when developed in conjunction with the operational managers, will confirm ownership of plans and prepare the proposed framework for practical implementation." (United Kingdom, 2007) During the next five years, 83 percent of companies will face a crisis that will negatively impact the profitability of a company 20 and 30 percent, according to new research by Oxford-Metrica, an independent adviser on risk, value, reputation and governance (Aon, 2006). Crisis management is the process by which the organization manages a wider impact, such as media relations, and enables it to commence recovery. Irrespective of the size of an intitution affected, the primary aims or benefits of crisis management would normally include:
1. Ability to assess the situation from inside and outside the Institution as all stakeholders might perceive it.
2. Techniques to direct action(s) to contain the likely or perceived damage spread.
3. Better institutional resilience for all stakeholders.
4. Compliance with regulatory and ethical requirements, e.g. corporate [social responsibility
A Framework for crisis management and crisis management planning
The United Kingdom’s Department for Business, Enterprise and Regulatory Reform (2008), describes a crisis as "an abnormal situation, or even perception, which is beyond the scope of everyday business and which threatens the operation, safety and reputation of an organization. The department advocates that businesses treat crisis management planning with the same attention as other business plans.
"... The crisis should be dealt with as an operational management issue that is simply being undertaken in extreme circumstances. The crisis management framework for response is normally based on existing management structures and responsibilities. It must also reflect (or improve upon) existing lines of communication, both within the company, and with other organizations which may be affected. This approach, when developed in conjunction with the operational managers, will confirm ownership of plans and prepare the proposed framework for practical implementation." (United Kingdom, 2007)
During the next five years, 83 percent of companies will face a crisis that will negatively impact the profitability of a company 20 and 30 percent, according to new research by Oxford-Metrica, an independent adviser on risk, value, reputation and governance (Aon, 2006). Crisis management is the process by which the organization manages a wider impact, such as media relations, and enables it to commence recovery.
Irrespective of the size of an intitution affected, the primary aims or benefits of crisis management would normally include:
1. Ability to assess the situation from inside and outside the Institution as all stakeholders might perceive it. 2. Techniques to direct action(s) to contain the likely or perceived damage spread. 3. Better institutional resilience for all stakeholders. 4. Compliance with regulatory and ethical requirements, e.g. corporate [social responsibility5. Much better management of serious incidents or any incident that could become serious. 6. Improved staff awareness of their roles and expectations within the institution. 7. Increased ability, confidence and morale within the institution. 8. Enhanced risk management insofar that obvious risks will be identified, mitigated (where possible) and through crisis and business continuity management - as prepared for. 9. Protected and often enhanced reputation a much reduced risk of post event litigation.
One of the key conclusions of this study is that "Effective management of the consequences of catastrophes would appear to be a more significant factor than whether catastrophe insurance hedges the economic impact of the catastrophe".
While there are technical elements to this report it is highly recommended to those who wish to engage their senior management in the value of crisis management
The Bhopal disaster in which poor communication before, during, and after the crisis cost thousands of lives, illustrates the importance of incorporating cross-cultural communication in crisis management plans. According to American University’s Trade Environmental Database Case Studies (1997), local residents were not sure how to react to warnings of potential threats from the Union Carbide plant. Operating manuals printed only in English is an extreme example of mismanagement but indicative of systemic barriers to information diffusion. According to Union Carbide’s own chronology of the incident (2006), a day after the crisis Union Carbide’s upper management arrived in India but was unable to assist in the relief efforts because they were placed under house arrest by the Indian government. Symbolic intervention can be counter productive; a crisis management strategy can help upper management make more calculated decisions in how they should respond to disaster scenarios. The Bhopal incident illustrates the difficulty in consistently applying management standards to multi-national operations and the blame shifting that often results from the lack of a clear management plan.
The two companies’ committed three major blunders early on, say crisis experts. First, they blamed consumers for not inflating their tires properly. Then they blamed each other for faulty tires and faulty vehicle design. Then they said very little about what they were doing to solve a problem that had caused more than 100 deaths -- until they got called to Washington to testify before Congress (Warner, 2002).Exxon Valdez spilled millions of gallons of crude oil into the waters off Valdez, killing thousands of fish, fowl, and sea otters. Hundreds of miles of coastline were polluted and salmon spawning runs disrupted; numerous fishermen, especially Native Americans, lost their livelihoods. Exxon, by contrast, did not react quickly in terms of dealing with the media and the public; the CEO, Lawrence Rawl, did not become an active part of the public relations effort and actually shunned public involvement; the company had neither a communication plan nor a communication team in place to handle the event—in fact, the company did not appoint a public relations manager to its management team until 1993, 4 years after the incident; Exxon established its media center in Valdez, a location too small and too remote to handle the onslaught of media attention; and the company acted defensively in its response to its publics, even laying blame, at times, on other groups such as the Coast Guard. These responses also happened within days of the incident (Pauly and Hutchison, 2005).
Corporate America is not the only community that is vulnerable to the perils of a crisis. Whether a school shooting, a public health crisis or a terrorist attack that leaves the public seeking comfort in the calm, steady leadership of an elected official, no sector of society is immune to crisis. In response to that reality, crisis management policies, strategies and practices have been developed and adapted across multiple disciplines.
In the wake of the Columbine High School Massacre, the September 11, 2001 attacks, and shootings on college campuses including the Virginia Tech massacre, educational institutions at all levels are now focused on crisis management.
A national study conducted by the University of Arkansas for Medical Sciences (UAMS) and Arkansas Children’s Hospital Research Institute (ACHRI) has shown that many public school districts have important deficiencies in their emergency and disaster plans (The School Violence Resource Center, 2003). In response the Resource Center has organized a comprehensive set of resources to aid schools is the development of crisis management plans.
Crisis management plans cover a wide variety of incidents including bomb threats, child abuse, natural disasters, suicide, drug abuse and gang activities – just to list a few (Kansas City Public Schools, 2007). In a similar fashion the plans aim to address all audiences in need of information including parents, the media and law enforcement officials (Virginia Department of Education, 2002).
A wide variety of programs have been developed that are dedicated to crisis response training for schools. Dr. John Dudley, an educational consultant, who has helped school districts across the nation prepare for and respond to school tragedies (Crisis Management, 2003) has developed such a training program. Dr. Dudley suggests that there are plans that are strategically designed to fit varying levels of crisis readiness:
Historically, politics and crisis go hand-in-hand. In describing crisis, President Abraham Lincoln said, “We live in the midst of alarms, anxiety beclouds the future; we expect some new disaster with each newspaper we read.”
Crisis management has become a defining feature of contemporary governance. In times of crisis, communities and members of organizations expect their public leaders to minimize the impact of the crisis at hand, while critics and bureaucratic competitors try to seize the moment to blame incumbent rulers and their policies. In this extreme environment, policy makers must somehow establish a sense of normality, and foster collective learning from the crisis experience (Boin, A., Hart, P., & Stern, E., 2005).
In the face of crisis, leaders must deal with the strategic challenges they face, the political risks and opportunities they encounter, the errors they make, the pitfalls they need to avoid, and the paths away from crisis they may pursue. The necessity for management is even more significant with the advent of a 24-hour news cycle and an increasingly internet-saavy audience with ever-changing technology at its fingertips. (Boin, A., Hart, P., & Stern, E., 2005).
Public leaders have a special responsibility to help safeguard society from the adverse consequences of crisis. Experts in crisis management note that leaders who take this responsibility seriously would have to concern themselves with all crisis phases: the incubation stage, the onset, and the aftermath. Crisis leadership then involves five critical tasks: sense making, decision making, meaning making, terminating, and learning. (Boin, A., Hart, P., & Stern, E., 2005)
A brief description of the five facets of crisis leadership includes:
1) Sense making may be considered as the classical situation assessment step in decision making.
2) Decision making is both the act of coming to a decision as the implementation of that decision.
3) Meaning making refers to crisis management as political communication.
4) Terminating a crisis is only possible if the public leader correctly handles the accountability question.
5) Learning, refers to the actual learning from a crisis is limited. The authors note, a crisis often opens a window of opportunity for reform for better or for worse. (Hellsloot, 2007) JP
Last minute LARA RFC
Natural disaster that destroys organizational office
Natural disaster that disrupts product/service
Confidential data loss
Kidnapping, (Key person; Tiger)
Hazardous material leak
Assault of customers
Natural disaster that destroys corporate headquarters
Natural disaster that eliminates key stakeholders
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