This document discusses crisis management. It defines a crisis as an unstable situation affecting individuals, groups or society. Common crisis features include a sense of loss of control, urgent decisions needed, and reputation damage. Crisis types include financial, technological, natural disasters, deception and workplace violence. Effective crisis management requires gathering facts, communication, planning, and assembling resources. The Union Carbide gas leak in Bhopal is provided as an example of unsuccessful crisis management, while Pepsi's response to a product tampering claim is described as successful management through communication.

1. Crisis Management

2. Crisis
 Crisis is any event that is expected
to lead to, an unstable and
dangerous situation affecting an
individual, group, community or
whole society.
 It is a situation that is
unpredictable, but it is not
unexpected.

3. Common features of Crisis
 The situation materialises unexpectedly.
 Decisions are required urgently.
 Time is short.
 Urgent demands for information are received.
 There is sense of loss of control.
 Pressures build over time.
 Routine business become increasingly difficult.
 Reputation suffers.

4. Types of Crisis
 Financial Crisis
 Technological Crisis
 Crisis of Malevolence
 Natural Crisis
 Crisis of Deception
 Workplace Violence

5. Financial Crisis
 These are the crisis that occur in an organization due to its
prevailing financial conditions.
 Losses, increase in costs, non-availability of funds,
bankruptcy, unable to pay back loans, etc.

6. Examples of Financial Crisis
 Kingfisher Airlines,
recently faced a financial
crisis.
 Deutsche Bank faced a
financial crisis in USA, in
2009.

7. Technological Crisis
 Technological crisis are caused by human application of
science and technology. This occurs when technology
becomes complex and the system breaks down.
 Software failures, Industrial accidents etc.

8. Examples of Technological Crisis
 Exxon Valdez, oil spill in
Alaska, on March 24,1989.
 Union Carbide India Ltd,
gas leak in Bhopal, on
December 2, 1984.

9. Crisis of Malevolence
 When opponents or miscreant individuals use extreme
tactics for the purpose of expressing anger or seeking gain
from, a company or economic system, perhaps with the
aim of destroying it.
 Product tampering, kidnapping, malicious rumors,
terrorism etc.

10. Example of Malevolence Crisis
 The Tylenol (Extra-Strength capsules) murder case in
Chicago, on 29 September, 1982.

11. Natural Crisis
 Natural crisis, are natural disasters considered as 'acts of
God,' are such environmental phenomena.
 Earthquakes, volcanic eruptions, tornadoes and hurricanes,
floods, landslides, tsunamis, storms, and droughts etc.

12. Examples of Natural Crisis
 The Power Project of
Jaiprakash Associates, at
Nathpa, in Himachal Pradesh
was devastated by floods.
 The Indian Ocean
earthquake (Tsunami) , in
2004.

13. Crisis of Deception
 Crisis of deception occur when management conceals or
misrepresents information about itself and its products
in its dealing with consumers and others.

14. Example of Crisis of Deception
 Dow Corning’s silicone-
gel controversy in
Michigan, USA.
 The Satyam scam,
which came into
light, in 2009

15. Workplace Violence and Rumors
 Crisis occur when an employee(s) or former employee(s)
commits an act of violence against other employees on
organizational grounds.
 Rumors are, when false information about an organization
or its products creates crises hurting it’s reputation.

16. Example of Workplace Violence and Rumors
 A workplace violence had
occurred between the
laborers and higher
authority, in Vardhman
Group of Companies.
 Procter & Gamble’s
Logo controversy in 1985.

17. Crisis Management
 Crisis management is the process by which an
organization deals with a major event that threatens to
harm the organization, its stakeholders, or the general
public.

18. Crisis Management Plan
 Gather facts.
 Be prepared.
 Communicate quickly and accurately
conduct brainstorming.
 Develop policies to minimize crisis.
 Assemble and organize resources.
 Create a Crisis Management Team.
 Execute actions

19. Example of Unsuccessful Crisis Management
 Union Carbide India Ltd, gas leak tragedy in
Bhopal, on December 2, 1984.

20.  It occurred on the night of December 2–3, 1984 at the
Union Carbide India Ltd, pesticide plant in Bhopal,
Madhya Pradesh.
 A leak of methyl isocyanate gas and other chemicals from
the plant resulted in the exposure of hundreds of
thousands of people.
 Estimates vary on the death toll. The official immediate
death toll was 2,259 and the government of Madhya
Pradesh.

21. Example of Successful Crisis Management
 The Pepsi Corporation faced a crisis in 1993,
which was successfully managed by the company.
 Cadbury’s chocolates – worms in packing.

22.  In 1993, claims of syringes being found in cans of diet
Pepsi were made.
 Company urged stores not to remove the product from
shelves while it had the cans and the situation
investigated.
 Pepsi released videos and made public, showing the
production process to demonstrate that such tampering
was impossible within their factories.
 Crisis was managed through effective communication.

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