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Crisis Management for Business Sustainability

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Crisis Management for Business Sustainability

  1. 1. MANAGING CRISIS FORBUSINESS SUSTAINABILITY
  2. 2. CRISIS CRISIS is defined assituation that isunpredictable but itis not unexpected.
  3. 3. Crisis Management• The art of dealing with sudden and unexpectedevents which disturbs the citizens, employees,organization as well as external clients refers toCrisis Management.Crisis Management is..
  4. 4. Types of crisis• Natural disaster• Technological crises• Confrontation• Malevolence• Crisis of deception• Crisis ofmanagementmisconduct
  5. 5. Common features of a crisis The situation materialises unexpectedly Decisions are required urgently Time is short Specific threats are identified Communications are increasingly difficult to manage Urgent demands for information are received There is sense of loss of control Pressures build over time Routine business become increasingly difficult Demands are made to identify someone to blame Outsiders take an unaccustomed interest Reputation suffers
  6. 6. Three Main Stages6PHASESPre crisis CrisisresponsePost-crisis.
  7. 7. Stages in crisis management Pre-Crisis Phase• The pre-crisis phase is concerned with prevention andpreparation.• Prevention involves seeking to reduce known risks that couldlead to a crisis. This is part of an Organization’s riskmanagement program.• Preparation involves creating the crisis management Plan,selecting and training the crisis management team, andconducting exercises to test the Crisis management plan andcrisis management team.
  8. 8. Crisis Response The crisis response is what management does and says afterthe crisis hits. Public relations plays a critical role in the crisisresponse by helping to develop the messages that are sent tovarious publics. A great deal of research has examined the crisis response.That research has been divided into two sections: (1) the initial crisis response and (2) Reputation repair and behavioral intentions
  9. 9. Post-Crisis Phase• In the post-crisis phase, the organization isreturning to business as usual. The crisis is nolonger the focal point of management’sattention but still requires some attention.
  10. 10. • On the night of April 13, two Domino’semployees engaged in an act of foodviolation posted their acts on YouTube(putting cheese in their nose, blowingmucous on a sandwich etc). The videoswent viral online, viewed by millions ofpeople until blocked.
  11. 11. Toyotas recall fiasco (2010)Toyota recalled a total of 8.8 million vehicles for safetydefects, including a problem where the cars acceleratorwould jam, which caused multiple deaths
  12. 12. Key points to remember in preparingfor crisis management plans• Complete threat analysis• Review possible contingencies and followscenario planning• Identify critical preparations• Select crisis management team• Inform and instruct everyone• Support practice and continuous planningimprovements
  13. 13. contd Develop crisismanagement teamAssign one leader formeeting communicationcrisis.other members gatherinformation and meetvoulanteers and staff.primary and secondaryspokesman deal with media
  14. 14. After the crisis Declare an end to crisis Follow up Perform an act ofgoodwill Have a formaldebriefing
  15. 15. Communicating in a crisis is different• In a serious crisis, all affected people . . .– Take in information differently– Process information differently– Act on information differently• In a catastrophic event: communication isdifferent• Be first, be right, be credible
  16. 16. What Do People Feel Inside Whena Disaster Looms or Occurs?Psychological barriers:1. Denial2. Fear, anxiety, confusion, dread3. Hopelessness or helplessness4. Seldom panic
  17. 17. What the Public Will Ask First• Are my family and I safe?• What have you found that may affect me?• What can I do to protect myself and myfamily?• Who caused this?• Can you fix it?
  18. 18. What the Media Will Ask First• What happened?• Who is in charge?• Has this been contained?• Are victims being helped?• What can we expect?• What should we do?• Why did this happen?• Did you have forewarning?
  19. 19. Individuals at risk—the cost?• Demands for unneeded treatment• Dependence on special relationships (bribery)• MUPS—Multiple Unexplained PhysicalSymptoms• Self-destructive behaviors• Stigmatization
  20. 20. Community at risk—the cost?• Disorganized group behavior (unreasonabledemands, stealing)• Rumors, hoaxes, fraud, stigmatization• Trade/industry liabilities/losses• Diplomacy• Civil actions
  21. 21. Communicating ina Crisis Is Different• Public must feel empowered – reduce fear andvictimization• Mental preparation reduces anxiety• Taking action reduces anxiety• Uncertainty must be addressed
  22. 22. Five Keys to EffectiveCommunication in a Crisis• Clarity• Repetition• Honesty• Empathy• Efficacy (Give them somethingto do)
  23. 23. How Do We Communicate About Riskin an Emergency?All risks are not accepted equally• Voluntary vs. involuntary• Controlled personally vs. controlled by others• Familiar vs. exotic• Natural vs. manmade• Reversible vs. permanent• Statistical vs. anecdotal• Fairly vs. unfairly distributed• Affecting adults vs. affecting children
  24. 24. THANK YOU

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