Crisis management strategies

Date: 2015-10-07; view: 602.

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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.
In contrast to risk management, which involves assessing potential threats and finding the best ways to avoid those threats, crisis management involves dealing with threats before, during, and after they have occurred. It is a discipline within the broader context of management consisting of skills and techniques required to identify, assess, understand, and cope with a serious situation, especially from the moment it first occurs to the point that recovery procedures start.
Types of crisis

During the crisis management process, it is important to identify types of crises in that different crises necessitate the use of different crisis management strategies.Potential crises are enormous, but crises can be clustered.
Lerbinger[7] categorized seven types of crises:
1. Natural disaster: Natural crises, typically natural disasters considered as 'acts of God,' are such environmental phenomena as earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, landslides, tsunamis, storms, and droughts that threaten life, property, and the environment itself.
2. Technological crises: Technological crises are caused by human application of science and technology. Technological accidents inevitably occur when technology becomes complex and coupled and something goes wrong in the system as a whole (Technological breakdowns). Some technological crises occur when human error causes disruptions (Human breakdowns[6]). Samples include software failures, industrial accidents, and oil spills, like Chernobyl disaster, Exxon Valdez oil spill
3. Confrontation: Confrontation crises occur when discontented individuals and/or groups fight businesses, government, and various interest groups to win acceptance of their demands and expectations. The common type of confrontation crises is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and resisting or disobeying police.
4. Malevolence: An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or other extreme tactics for the purpose of expressing hostility or anger toward, or seeking gain from, a company, country, or economic system, perhaps with the aim of destabilizing or destroying it. Sample crises include product tampering, kidnapping, malicious rumors, terrorism, and espionage
5. Organizational Misdeeds:Crises occur when management takes actions it knows will harm or place stakeholders at risk for harm without adequate precautions.Lerbinger specified three different types of crises of organizational misdeeds:
• crises of skewed management values : are caused when managers favor short-term economic gain and neglect broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business creed that focuses on the interests of stockholders and tends to disregard the interests of its other stakeholders such as customers, employees, and the community.
• crises of deception: Crises of deception occur when management conceals or misrepresents information about itself and its products in its dealing with consumers and others.
• crises of management misconduct: Some crises are caused not only by skewed values and deception but deliberate amorality and illegality.
6. Workplace Violence: Crises occur when an employee or former employee commits violence against other employees on organizational grounds. 7. Rumours: False information about an organization or its products creates crises hurting the organization's reputation. Sample is linking the organization to radical groups or stories that their products are contaminated
Models and theories associated with crisis management
Crisis Management Model
Successfully defusing a crisis requires an understanding of how to hand

the different phases of Crisis Management.
There are 3 phases in any Crisis Management are as below
• The diagnosis of the impending trouble or the danger signals.
• Choosing appropriate Turnaround Strategy.
• Implementation of the change process and its monitoring.