Crisis management
Definition
Crisis;- A crisis is a major, unpredictable event that threatens to harm an organization and its stakeholders. Although crisis events are unpredictable, they are not unexpected (Coombs, 1999). Crises can affect all segments of society – businesses, churches, educational institutions, families, non-profits and the government and are caused by a wide range of reasons. Although the definitions can vary greatly, three elements are common to most definitions of crisis: (a) a threat to the organization, (b) the element of surprise, and (c) a short decision time (Seeger, Sellnow & Ulmer, 1998).
Sudden Crises, such as fires, explosions, natural disasters, workplace violence, etc; Crises are problems or issues that start out small and could be fixed or averted if someone was paying attention or recognized the potential for trouble on time.
The Rumour about the School Close-Down which lead to panic Crisis
How it Happened
The panic crisis which erupted due to rumours of the school close-down was brought about due to fears among the student community concerning courses which has not yet been accredited by the NUC whose officials visited the school for inspection of facilities and accreditation of courses the week before.
The tension in the wind, which was due to the schools management attention to every little detail must have gotten to the nervous system of the anxious, impatient students who were kept in the dark about the outcome and the reason for the visit of the NUC to flare up and assume something had gone terribly bad for the school authority to be quite about the previous week NUC visit which put each and every one on his or her toes.
How such Crisis can be Solved or Managed
Some generic help and hints on crisis management
1. Prepare contingency plans in advance (crisis management team and members can be formed at very short notice, rehearsing of crises of various kinds)
2. Immediately and clearly announce internally that the only persons to speak about the crisis to the outside world are the crisis team members)
3. Move quickly (the first hours after the crisis first breaks are extremely important, because the media often build upon the information in the first hours)
4. Use crisis management consultants (advice by objectivity of PR consultants is important, use the corporate image expertise of specialists)
5. Give accurate and correct information (remember that trying to manipulate information will seriously backfire if it is discovered, also internally!)
6. When deciding upon actions, consider not only the short-term losses, but focus also on the long term effects.
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.
A Framework for crisis management and crisis management planning
"… 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). 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 institution 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].
5. 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.
How to prevent crisis
Models and theories associated with crisis management
Successfully diffusing a crisis requires an understanding of how to handle a crisis – before it occurs. Gonzalez-Herrero and Pratt created a four-phase crisis management model process that includes: issues management, planning-prevention, the crisis, and post-crisis (Gonzalez-Herrero and Pratt, 1995).
No corporation looks forward to facing a situation that causes a significant disruption to their business, especially one that stimulates extensive media coverage. Public scrutiny can result in a negative financial, political, legal and government impact. Crisis management planning deals with providing the best response to a crisis. (12Manage, 2007)
Preparing contingency plans in advance, as part of a crisis management plan, is the first step to ensuring an organization is appropriately prepared for a crisis. Crisis management teams can rehearse a crisis plan by developing a simulated scenario to use as a drill. The plan should clearly stipulate that the only people to speak publicly about the crisis are the designated persons, such as the company spokesperson or crisis team members. The first hours after a crisis breaks are the most crucial, so working with speed and efficiency is important, and the plan should indicate how quickly each function should be performed. When preparing to offer a statement externally as well as internally, information should be accurate. Providing incorrect or manipulated information has a tendency to backfire and will greatly exacerbate the situation. The contingency plan should contain information and guidance that will help decision makers to consider not only the short-term consequences, but the long-term effects of every decision. (12Manage, 2007)
When a crisis will undoubtedly cause a significant disruption to an organization, a business continuity plan can help minimize the disruption. First, one must identify the critical functions and processes that are necessary to keep the organization running. Then each critical function and or/process must have its own contingency plan in the event that one of the functions/processes ceases or fails. Testing these contingency plans by rehearsing the required actions in a simulation will allow for all involved to become more sensitive and aware of the possibility of a crisis. As a result, in the event of an actual crisis, the team members will act more quickly and effectively. (12 Manage, 2007)
Structural-Functional Systems Theory
Providing information to an organization in a time of crisis is critical to effective crisis management. Structural-functional systems theory addresses the intricacies of information networks and levels of command making up organizational communication. The structural-functional theory identifies information flow in organizations as "networks" made up of members and "links". Information in organizations flow in patterns called networks (Infante, Rancer, & Womack, 1997).
Diffusion of Innovation Theory
Another theory that can be applied to the sharing of information is Diffusion of Innovation Theory. Developed by Everett Rogers, the theory describes how innovation is disseminated and communicated through certain channels over a period of time. Diffusion of innovation in communication occurs when an individual communicates a new idea to one or several others. At its most elementary form, the process involves:
(1) an innovation,
(2) an individual or other unit of adoption that has knowledge of or experience with using the innovation,
(3) another individual or other unit that does not yet have knowledge of the innovation, and
(4) a communication channel connecting the two units. A communication channel is the means by which messages get from one individual to another (Infante et al., 1997).
Examples of organizational crises;
Extortion
Bribery
Hostile Takeover
Terrorist Attack
Last minute LARA RFC
Copyright infringement
Vehicular fatality
Information sabotage
Product tampering
Workplace bombing
Natural disaster that destroys organizational office
Computer tampering
Sexual harassment
Natural disaster that disrupts product/service
Confidential data loss
Kidnapping, (Key person; Tiger)
Product/service boycott
Work-related homicide
Malicious rumor
Hazardous material leak
Plant explosion
Personnel assault
Assault of customers
Product recall
Counterfeiting
Natural disaster that destroys corporate headquarters
Natural disaster that eliminates key stakeholders
Conclusion
Crisis usually refers to dangerous or worrying time or a situation or period in which things are very uncertain, difficult, or painful, especially a time when action must be taken to avoid complete disaster or breakdown, it is also a critical moment or a time when something very important for the future happens or is decided, therefore precautions has to be taken and strategies has to be formulated in order to be able to manage the crisis when it happens or better avoided.
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