CRISIS MANAGEMENT
MODULE 7
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MANAGING IN A CRISIS
Warning signs that appear with
SURPRISE!
Insufficient Information
Close Outside Scrutiny
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Loss of Control
Siege Mentality
MEANING: CRISIS
A crisis may be defined as " any situation that is threatening or could threaten to harm people or property, seriously interrupt business, damage reputation or negatively impact stock value".
MEANING: CRISIS MANAGEMENT
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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.
TYPES OF CRISIS
- Acts of god
- Mechanical problem
- Human errors
- Management decisions
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TYPES OF CRISIS
- Natural Disaster : Tsunami
- Technological crises : software failures
- Confrontation : boycott of nike
- Organizational Misdeeds : misconduct
- Workplace Violence : strikes
- Rumours : P & G logo controversy
- Terrorist attacks/man-made disasters
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CAUSES FOR PR CRISIS
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- Exterior of organization
- Interior of the organization
HOW PEOPLE TYPICALLY REACT TO THE ISSUES
1% Immediately Favourable
45% Learning Favourable
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8% Opinion Leaders
45% Learning Unfavourable
1% immediately favorable
45% Learning Favorable
8% Opinion Leaders
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45% Leaning Unfavorable
Zealots, minds made up as soon as they hear of the issue
Have opinion, won't do anything about it
Willing to discuss, open minded will drive decision
Have opinion, won't do anything about it
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HOW PEOPLE TYPICALLY REACT TO THE ISSUES
- Zealots, minds made up as soon as they hear of the issue (Immediately Favorable)
- Have opinion won't do anything about it (Leaning Favorable)
- Willing to discuss, open minded will drive decision (Opinion Leaders)
- Have opinion won't do anything about it (Leaning Unfavorable)
- Zealots, minds made up as soon as they hear of the issue (Immediately UnFavorable)
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OBJECTIVE OF CRISIS MANAGEMENT
- Identify the root cause
- Managing the information flow
- Understanding the adversary
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ROLE OF COMMUNICATION IN CRISIS MANAGEMENT
OBJECTIVES OF COMMUNICATION
- 1) Information
- 2) Advice
- 3) Order
- 4) Suggestion
- 5) Persuasion
- 6) Education
- 7) Warning
- 8) Raising moral
- 9) Motivation
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ROLE OF COMMUNICATION IN CRISIS MANAGEMENT
PRE - CRISIS
AT THE BEGINNING OF THE CRISIS
DURING THE CRISIS
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RECOVERING FROM THE CRISIS
POST CRISIS
FUNDAMENTAL GUIDELINES FOR CRISIS MANAGEMENT
- Do an objective assessment of the cause(s) of the crisis.
- Determine whether the cause(s) will have a long term or whether it will be a short - term phenomena.
- Project the most likely course of events.
- Focus all the most capable people (including yourself) on activities that will mitigate or eliminate the problem.
- Look for opportunities - there could be a "silver lining".
- Immediately act to guard cash flow.
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ADVANTAGES OF CRISIS MANAGEMENT
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- Helps to prepare for threat
- Take action immediately
- Enjoy competitive advantage
- Enhances reputation
- Reduces damage
- Financial loss
- Minimises panic
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DISADVANTAGES OF CRISIS MANAGEMENT
- Monetary cost
- Can distract organisation from core activities, targets and goals.
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THANK YOU
This download link is referred from the post: VTU MBA Lecture Notes - 1st Sem, 2nd Sem, 3rd Sem and 4th Sem || Visvesvaraya Technological University
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