The occurrence of an unplanned event can bring devastating effects on an organization such as incurrence of severe losses, losing customers and in extreme cases, going out of business. Crises such as failure of IT systems, damage to the stock, fire, illness of key staff make it difficult to embark in every day’s operations. This calls for stringent measures to be taken within the organization which helps in minimizing the potential impact of the disasters that strike a business and possibly preventing reoccurrence of the event. To effectively achieve this, crisis management is usually employed. The crisis involves a transformation process that results in the old systems being unable to be maintained, and the most common elements of crisis are; the fundamentals of surprise, a risk to the establishment and a short resolution time related problem (Fink 54).
Crisis management is an art of making decisions to mitigate the occurrence of negative events which are uncertain to occur, than threaten to adversely impact on the organisation and its stakeholders. Unlike the risk management which entails identifying imminent threats and establishing best approach to prevent them, crisis management entails handling disasters after they have taken place. Fink (54) noted that “Crisis management is more concerned with the skills, techniques and the strategies required in identifying, assessing and coping with serious events, from the moment of their occurrence to the point where recovery procedure begins.” Crisis management can simply be said to consist of methods used in responding to both the reality and anticipated crisis, establishing of metrics in identifying the crisis cause and the communication within the environment of emergency management scenarios.
In order to effectively manage crisis, identification of the crisis type is important, as it guides the method of responding n an attempt to deal with the crisis. There are three main types of crises: first natural crises, these are considered as natural disasters and in most cases are seen as ‘acts of God’. “They include environmental occurrences such as hurricanes, volcanic eruption, earthquakes, landslides, droughts and storms among other, which threaten life, property and also the environment itself.”
Second type of crisis is called technological crisis. These are caused by science and technology as applied by man, mostly occur when this technology becomes intricate and tied together affecting the entire system of operation. Human error concerning technology handling also attributes to the technology crisis.
Thirdly, confrontation crisis, which emerges when disgruntled group or people tussle a business, government and other interest groups aimed at achieving their needs. These crises are characterised by boycotts, sit-ins, blockade, police disobedience and anomic behaviours. Other minor type of crises include: crisis of malevolence, which involves opponents or miscreants in an organisation using criminal means such as terrorism espionage and malicious rumours, to express their hostility or anger towards, or seeking to gain from the company, economic system or the destruction of organisation (Gottschalk 205).
Another type of crisis is the crises of organisational misdeeds, which includes “crises of skewed management values, deception and crises of management misconduct.” These are happen when the an organisation’s leadership put more emphasis on short term economic issues at the expense of the wider social responsibilities. This problem is connected to the business creed which aims on the stakeholder’s demands and evaluating them similarly with those of its other stakeholder.
There are numerous theories or approaches to taking crisis management:
- Crisis management model, this was formulated by Gonzalez-Herrero and Pratt, (qtd. In Harvard Business School 259) and defined crisis management as a four-phase process that includes: Issue management, planning prevention, the crises, and post crisis. It aims to identify what the crises really are and could be and what are the causes or potential causes;
- management crisis management model, this assumes that no organisation which anticipates disruptions n its operations, particularly public scrutiny, thus a crisis should be handled in the best way possible since
- Contingency planning model, this involves rehearsing a crisis contingency plan to ensure that the organisation is well prepared for crises. The plan should document information and guidelines, which will enable managers to take into consideration both short term and long terms impacts of any decision taken;
- Business continuity planning model, this entails preparing a business continuity plan when a firm anticipates that a crisis will definitely impact adversely in its operations, to reduce the impact. The firm needs to classify the crucial functions and design its own contingency plan to back up if a function fails.
- Structural-functional systems model, it assumes that information to an entity in crises is an effective way of crisis management. The information in an entity flows in networks and thus is critical to address the complexities of information networks and level of command followed in an entity communication.
- Diffusion of innovation model, this was propounded by Everett Rogers and shows the importance of innovation and its network in a given time. Diffusion of innovation takes place when a person conveys a thought to others.
For effective crisis management, an organisation should draft a crisis management plan. A crisis management plan is a formal document showing the measures to be put in place by an institution when crises sets in. It is meant to minimize the impact of the crisis and provide a response system. The plan should be inclusive and not limited to specific disasters. In developing a crisis management plan there are important issues that should be considered: crisis management methods, communication plan, management team and the evacuation team. Crisis planning aims at putting an organisation at the best possible position to counteract and recover from crises.
However, there are two aspects of a crisis planning: first, establishing escalation guidelines for the personnel to help in crisis prevention, detection and control. It entails training the senior staff to equip them with analytical skills on handling crisis as the earliest instance before they advance. It aims to enlighten the staff to know when to report problems to the senior staff to react to the problems. The organisation’s management should establish a reporting mechanism to maintain logs of problems occurrence. Management should enable a culture where the staff can communicate freely these occurrences (Reid 144).
Secondly, creation of a crisis team that is well prepared to combat any crisis. The organisation’s leadership should identify the main players to take positions in the team, based on their specialty, character and ability to work. The crisis team responsibilities include: restoring information networks, control and commands in times of a crisis while acquiring information, so as to provide the senior staff with adequate information on the situation. To enable teamwork and to solve the crisis, the crisis team needs to adopt crisis management, for example performing drills or scenarios to create an imaginary crisis, to evaluate how the team would respond in times of a real disaster.
Crisis recovery is an important part of post-crisis stage. “In crisis management an organisation needs to consider crisis management continuum planning.” This involves steps that are necessary to bring back the organisation to its functioning position. This involves: maintaining off-site, existing backup of important information, logs, staff and other lists, thus backup security is critical; conducting an insurance review to make sure that it can adequately compensate all risks incurred; exploring legal elements of recovery with the legal department; planning to evacuate the occupants or those present if the crisis poses danger to them; and reviewing all current service agreements and check for post-crisis provisions and recovery support.
The other important part is the communication plan that involves communication to the stakeholders and media management strategies. Crisis communication can transform the unexpected into the anticipated and save the company’s credibility and reputation. Media management strategies include choosing a chief spokesman to handle the media while the rest of the staff is warned not to communicate with the media personally or give any information that could interrupt the process. This is designed to protect and defend a company facing a crisis. The spokesman should prepare a statement guided by professionalism and transparency while keeping the company’s matters confidential (Regester 96).
Examples of successful crisis management incidents include: the Tylenol (Johnson and Johnson) crisis of 1982; Odwalla Foods crisis in 1996; Mattel Inc. Incident in Summer 2007; Pepsi Corporation in 1993 and other cases.
References
Fink, Steven. Crisis management: planning for the inevitable. Bloomington, IN: IUniverse, 2000. Print.
Gottschalk, Jack. Crisis Management. New York, NY: Springer, 2002. Print.
Harvard Business School. Crisis Management: Master the Skills to Prevent Disasters. NY: Harvard Business Press, 2004. Print.
Regester, Larkin. Risk Issues and Crisis Management: A Casebook of Best Practice. Hoboken: Upper Saddle River, NJ: Pearson, 2002. Print.
Reid, Mark. Crisis management: planning and media relations for the design and construction. Upper Saddle River, NJ: Pearson, 2000. Print.