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Elements of a CrisisElements of a Crisis
Three elements are common to most definitions of crisis:
(a)a threat to the organization, (b) the element of surprise, (c)a short decision time (d)a need for change
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Crisis management - 1Crisis management - 1
Crisis management consists of:• Methods used to respond to both the reality
and perception of crises • Establishing metrics to define what scenarios
constitute a crisis and should consequently trigger the necessary response mechanisms.
• Communication that occurs within the response phase of emergency management scenarios
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Crisis Management - 2
The credibility and reputation of organizations is heavily influenced by the perception of their responses during crisis situations
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Crisis Management - 3
* respond to a crisis in a timely fashion makes for a challenge in businesses.
* must be open and consistent communication throughout the hierarchy to contribute to a successful crisis communication process.
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Types of CrisesTypes of Crises• Natural disastersNatural disasters• MalevolenceMalevolence• Technical breakdownsTechnical breakdowns• Human breakdownsHuman breakdowns• ChallengesChallenges• Mega-damageMega-damage• Organizational misdeedsOrganizational misdeeds• Workplace violenceWorkplace violence• RumorsRumors
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Crisis ManagementCrisis Management
Technological crisesTechnological crises- caused by human application of science and caused by human application of science and
technology technology - when technology becomes complex and when technology becomes complex and
coupled and something goes wrong in the coupled and something goes wrong in the system as a whole (Technological system as a whole (Technological breakdowns) breakdowns)
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Crisis Management
Crises of organizational misdeeds- when management takes actions it knows will
harm or place stakeholders at risk for harm without adequate precautions
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Crisis Management
Types of crises of organizational misdeeds:- crises of skewed management values- crises of deception- crises of management misconduct.
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Crisis ManagementCrisis Management
Crisis management model Successfully diffusing a crisis requires an
understanding of how to handle a crisis – before it occurs
- issues management- planning-prevention- the crisis- post-crisis
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Contingency Planning
• Plan in advance• Rehearse via simulation• Stipulate who the spokesperson is• Speed and efficiency in response to crisis• Offer accurate information or it will backfire• Plan offers info and guidance to help decision
makers deal with long-term effects of decisions
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Role of apologies in crisis management
• Controversial - for fear of legal outcomes• Evidence says that a compensation and
sympathy are effective • True contrition includes sympathy for victims
and offers of compensation to offset losses or suffering
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TOYOTA – CRISIS MANAGEMENT FAILURE
Toyota’s communication strategy: “Too little, too late”
Beyond the quality problemToyota mismanaged the crisis
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TOYOTATOYOTABasic Rules ViolatedBasic Rules Violated
• For senior Manager: crises must become their #1 priority immediately.
• Integrity of firm threatened - immediate hands-on control of CEO/team
• Sticking accelerators in 2008 - not treated as a serious matter
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TOYOTATOYOTABasic Rules violatedBasic Rules violated
Find facts & solutions fast: - Toyota managers at first in denial - accepted a ‘patch’ (remove floor mats), not
solution - when crisis exploded -- engineering
solution/stopped production- Even today no one outside of Toyota knows what
the real problems are – open to speculation and rumors
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TOYOTA TOYOTA Basic rules violatedBasic rules violated
Communicate fully and accurately: - to all constituents to sustain trust - err on side of protecting consumers &
maintain trust with a recallWhat Toyota did:
hushed problem and hoped it go away
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Before During Before During After After
1. Crisis Types1. Crisis Types
2. Crisis 2. Crisis MechanismsMechanisms
3. Crisis 3. Crisis SystemsSystems
4. Crisis 4. Crisis StakeholdersStakeholders
Expose Expose WeaknesseWeaknesses s
BuildBuild CapabilitCapabilitiesies
EnactEnact CapabilitCapabilitiesies
Learn Learn RedesignRedesign
To Enact Is NOT To To Enact Is NOT To ReactReact
To Enact Is To Be To Enact Is To Be ProactiveProactive
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The Manager’s Crisis Index :The Lukaszewski Group
Potential Crisis Situations
AAbortion
Accidents
Adverse Government Actions
AIDS
Anonymous Accusers
WWhistleblowers
Over 120 items & the list seems endless!!
Situation Hopeless??
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CRISIS FAMILIES
EXT ECON ATTACKS
EXT INFO
HR / REP
PSYCHO
OCCUP-HEALTH
MEGA-DAMAGE
ORG / SOC
TECH / ECON
BREAKS
CRIMINAL
LEGAL
NATURAL DISASTERS
GOVT REGULATORY
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Breaks
Loss of Key Equipment, Plants, SuppliesBreakdown of Key Equipment, PlantsLoss of Key FacilitiesMajor Plant Disruption
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Economic
Labor StrikesLabor UnrestLabor ShortageMajor Decline in Stock Price and FluctuationsMarket CrashDecline in Major Earnings
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Human Resource
Loss of Key Executives, Personnel Rise in AbsenteeismRise in Vandalism and AccidentsWorkplace Violence
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Informational
Loss of Proprietary and Confidential Information
False InformationTampering with Computer RecordsLoss of Key Stakeholder Information
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Reputation
SlanderGossipSick JokesRumorsDamage to Corporate ReputationTampering with Corporate Logos
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CRISIS FAMILIES
EXT ECON ATTACKS
EXT INFO
HR / REP
PSYCHO
OCCUP-HEALTH
MEGA-DAMAGE
ORG / SOC
TECH / ECON
BREAKS
CRIMINAL
LEGAL
NATURAL DISASTERS
GOVT REGULATORY
TT
FFNORMALNORMALABNORMALABNORMAL 28
CRISIS FAMILIES
EXT ECON ATTACKS
EXT INFO
HR / REP
PSYCHO
OCCUP-HEALTH
MEGA-DAMAGE
ORG / SOC
TECH / ECON
BREAKS
CRIMINAL
LEGAL
NATURAL DISASTERS
GOVT REGULATORY
TT
FFNORMALNORMALABNORMALABNORMAL
NN SS
29
CRISIS FAMILIES
EXT ECON ATTACKS
EXT INFO
HR / REP
PSYCHO
OCCUP-HEALTH
MEGA-DAMAGE
ORG / SOC
TECH / ECON
BREAKS
CRIMINAL
LEGAL
NATURAL DISASTERS
GOVT REGULATORY
TT
FF
BREAKS
NORMALNORMALABNORMALABNORMAL
NN SS
31
CRISIS FAMILIES
EXT ECON ATTACKS
EXT INFO
HR / REP
PSYCHO
OCCUP-HEALTH
MEGA-DAMAGE
ORG / SOC
TECH / ECON
BREAKS
LEGAL
NATURAL DISASTERS
GOVT REGULATORY
TT
FF
PSYCHO
NORMALNORMALABNORMALABNORMAL
NN SS
CRIMINAL
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