Definition
Crisis management is the application of strategies designed to help an
organization deal with a sudden and significant negative event.
A crisis can occur as a
result of an unpredictable event or as an unforeseeable consequence of some
event that had been considered a potential risk. In either case, crises
almost invariably require that decisions be made quickly to limit damage to the
organization.
According to Regester. M.
(1995), a PR consultant and a crisis management contributor hedefines a crisis
as “an event that causes the organization to become the subject of widespread potentially
unfavorable attention from the media and other external groups such as
shareholders, politicians, trade unionists and environmental pressure groups
who, for one reason or another, have a vested interested in the actions of the
organization.”
Importance of Crisis
Management in an organization
The large-scale industrial and environmental
disasters in the 80s triggered the study of crisis management and it is
considered to be the most important process in public relations. Crisis
management is perhaps even more relevant and important to today’s businesses in
terms of safeguarding data, ethical supply chains, cross-cultural
communication, safe products and man-made environmental disasters. The
technology advancements in today’s business world have transformed productivity
and communication. Businesses struggle to keep up with the pace of technology
development resulting in the mad rush and push to prove otherwise. It is this
haste to keep up with the modern world where crisis management is key. Many
businesses react to crises rather than planning for them. Crisis management in
the modern world is now more important than ever.
Types of crisis
in organizations
- Natural disaster
- Technological crisis
- Confrontational crisis
- Crisis of malevolence
- Crisis of organizational Misdeeds
- Workplace violence
- Rumors
Advantages of
crisis management
- Crisis management plans can equip organization to withstand threats to their survival better.
- Awareness of potential threats can put an organization in a better position to take early action, often helping to avoid more serious problems.
- Effective crisis management plans can help companies to achieve improved levels of regulatory compliance.
- Appropriate planning for potential industry-wide crisis can give a company the upper hand over ill-prepared competitors.
- Effective communications during a crisis can help determining how the company’s core values and benefits have helped it to overcome a major challenge, potentially enhancing public perception of the company.
- Literally save lives, save money and save an organization from devastation. Any organization that is not prepared for the crisis will be constantly at risk.
- Determine which crisis an organization is likely to face and the possibility of each.
- It prepares you to the bad event so that when it happens you don’t panic nor give an emotional decision.
Disadvantages of
crisis management
- Crisis management planning may seem expensive.
- Attempts to plan exhaustively for every conceivable threat can be counterproductive.
- Excessive focus on potential threats can divert management focus on how to capitalize on growth opportunities of the organization.
The table below shows a survey about relation between change management and crisis management that conducted by the students of University of national and world economy, Sofia, Bulgaria.
33.8% of the respondents point out that the
2008 financial and economic crisis had a negative impact on their organizations.
According to respondents the number of gradual crises exceed sudden ones: 28.9%
definitely state that crises in organizations are gradual, while 16.2% –
sudden. This means that there is good potential for managerial reaction in
terms of timely identification of the signs of a crisis in the organization as
a base for an adequate reaction. On the other hand, the statement that crisis
management is in close relationship with change management is once again
justified: 78.6% of the respondent’s state that crises in their organizations
are related to inefficient change management (see Table 3). It can be concluded
that organizations in the information and communications technologies sector
exhibit various skills related to the implementation of flexible methods for
change management in the process of effective crisis decision making. Crisis
should increasingly be seen as a natural phenomenon which means that managers
should be familiar with them and to be capable of offering appropriate
solutions so that they can quickly and successfully be dealt with.
CONCLUSION
We live in a society continually affected by natural disasters, such as earthquakes, storms and floods, and by organizational crises. Regardless of where you live or the kind of work you do, many different types of crises have the potential to significantly disrupt your life. No community and no organization, is immune from crises.
Corporate crisis management is as a systematic
process that has the potential to identify and predict crises during the
process of trying. Then in front of them take preventive measures to minimize its
impact. It is clear that managers cannot be prepared against all types of
crisis. However, if they are to crisis management as an integral part of their
strategic management responsibility, the possibility is that the crisis is
greatly reduced organizations. According to crisis management and its relation
to the technical and operational planning is very important.
