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H1N1 Web journal

H1N1 Web journal

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Published by Katie Lim

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Published by: Katie Lim on Aug 28, 2010
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09/29/2010

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A
crisis
is defined by the dictionary as a 'critical moment or turning point.' A business book, on the other hand, might define a crisis as a substantial, unforeseen circumstance that can potentially jeopardize acompany's employees, customers, products, services, fiscal situation, or reputation. Both definitionscontain an element of urgency that requires immediate decisions and actions from people involved. 
Crisis Management
is the process of preparing for and responding to an unpredictable negative event toprevent it from escalating into an even bigger problem, or worse, exploding into a full-blown, widespread,life-threatening disaster. Crisis management involves the execution of well-coordinated actions to controlthe damage and preserve or restore public confidence in the system under crisis. In the context of corporate governance, excellent crisis management is a'must'whenever a crisis occursbecause of the crisis' enormous potential impact on the company's reputation and financial standing. Poor handling of a crisis situation can ruin the confidence of the customers or the public in a company and jeopardize its survival, a situation that normally takes a long time to correct, if it still is reparable at all. Suchis the importance of public perception of a company's handling of a crisis situation thatmedia coveragemanagementhas become an important ingredient of crisis management. In fact, the definition given by the American Institute for Crisis Management (ICM) for the word 'crisis'underscores the association of a crisis with media coverage by default. ICM defines 'crisis' as
"asignificant business disruption which stimulates extensive news media coverage. The resulting  public scrutiny will affect the organization's normal operations and also could have a political, legal, financial, and governmental impact on its business." 
Crisis management doesn't start only when a crisis arises and ends when 'the last fire has been put out'.Crisis management requires actions before a crisis happens, while the crisis is unfolding, and after thecrisis has ended. In fact, crisis management is divided into these three stages: 1)pre-incident stage, whichinvolves identification of potential crisis situations and developing contingency plans for responding to eachof them; 2)incident stage, which involves management of an ongoing actual crisis situation itself; and 3)post-incident stage, which includes corrective and preventive actions to preclude the recurrence of thesame crisis situation and business recovery actions to restore public confidence in the brand or thecompany.There are many different ideas or theorieson how to best manage a crisis situation. These differing ideas,nonetheless, have somecommon elements: 1) the need to anticipate potential crisis situations andprepare for them; 2) the need to provide accurate information during a crisis; 3) the need to react asquickly as possible to the situation; 4) the need for a response that comes from the top; and 5) the need for long-term solutions.Anticipating potential crisis situations that a company may encounter and formulating and documentingcontingency action plansfor them are a basic requirement of any crisis management program. Theseplans should also be well-rehearsed by all employees, so the conduct of regular drillsis also needed. Anycompany must be prepared to deal with fires, bomb threats, personnel violence, and natural disasters suchas earthquakes and tornadoes. In the semiconductor industry, the discovery of a life-threatening devicereliability issue, process gas leaks, hazardous chemical spills, and even the sudden loss of a major supplier are examples of crisis situations.One of the hardest things to contend with during a crisis is thecravingof customers or the public for aconstant supply of information. Accurate information pertaining to a crisis are often not readily available atonce, and are too bitter to announce to the public once they become available. If the crisis does notconcern the public, then a company may get away with staying quiet about it.Otherwise, the press will usually be all over the place within hours. In such a case, there is no choice -most experts agree that it is better toprovide accurate information, no matter how painful they sound, thanto manipulate the situation by giving false information to the public, which often backfires with tremendousrepercussions. Thus, a company that has developed a culture of internal secrecy and manipulation is of great disadvantage in this respect, because they would find it difficult to provide honest information andsubsequently resort to the thing they usually do: hide the truth. PR work for high-profile crises is somethingthat any management team must be well-trained for.
 
 Being indecisive, playing time, or inability to get accurate information quickly can be disastrous during acrisis. Management must actswiftlyanddecisivelyto contain the problem, assess affected goods, ensure business continuity, allay public fears, and preserve company reputation even while the crisis is stillunfolding. Since a crisis by definition is unpredictable, a company needs to have a system for assemblinga crisis management team that knows what to do within an hour after a crisis occurs, 24 hours day, allyear long.Thevisibilityof topmanagement peopleduring a crisis is highly recommended by experts because it assures the public that the problem is getting due corporate attention. Management must also activelypursuelong-termcorrective and preventive actions to avoid being in the same crisis situation again.A comprehensive crisis management program includes the following components: 1) anemergencyresponse, which consists of all activities pertaining to safe management of immediate physical, health, andenvironmental effects of the crisis; 2)business continuity, or the company's ability to continue deliveringgoods and services despite the crisis; 3)crisis communications, which pertains to the internal and externalPR management activities during a crisis; 4)humanitarian assistance, or the company's efforts to alleviatethe physical, emotional, and psychological effects of the crisis on other people; and 5)drills and exercisesthat allow personnel to rehearse what they need to do in a crisis situation.
Crisis management
involves identifying acrisis, planning a response to the crisis and confronting andresolving the crisis. Crisis management can be applied in almost any field of endeaver, but it is mostcommonly used in international relations, political scienceandmanagement. For more about crisis management in international relations, seeinternational crisis.  In general terms, the theory of crisis management can be divided into crisis bargaining and negotiation,  crisis decision making,and crisis dynamics.
In management
In business there are three main types of crisis:
Financial crisis - short term liquidity or cash flow problems; and long term bankruptcy problems
Public relations crisis - negative publicity that could adversely effect the success of the company
Strategic crisis - changes in the business environment that call the viability of the company intoquestion - for example the introduction of the automobile was a strategic crisis for buggy-whipmanufacturersSteps should be taken to prevent a crisis from occurring. Companies should always be planning ahead andprojecting likely outcomes. They should avoid decisions that have the potential to turn into a crisis. Alwaysknow your "worse case scenario" and have a contingency plan just in case.If prevention has not been successful, then the following six steps should be undertaken immediately:
Do an objective assessment of the cause(s) of the crisis.
 
Determine whether the cause(s) will have a long term effect or whether it will be a short termphenomena.
Project the most likely course of events.
Focus all the most capable people (including yourself) on activities that will mitigate or eliminate theproblem.
Look for opportunities - there could be a "silver lining"
Immediately act to guard cash flow.If it is a financial crisis do not wait for further evidence before acting. Immediately take actions to maintainor increase cash flow. These could include:
accelerate accounts receivable payments even if this requires the granting of discounts
decelerate accounts payable payments even if this means losing discounts
increase short term sales
maintain or increase profit margins on sales if possible
reduce expenses:
eliminate non-essential expenses
sell non-mission critical assets
reduce payroll
outsource non-mission critical operations
renegotiate loans and other debts wherever possible - obtain interest-only loans or extendedpayment termsIf it is a public relations crisis, act immediately to prevent or counter the spread of the negative information.Containment may require intense media activities. Use every media available to you to provide a counter argument or question the credibility of the original negative publicity.Source:http://www.instituteforpr.com/essential_knowledge/detail/crisis_management_and_communications/
Crisis Management and Communications
by W. Timothy Coombs, Ph.D
Introduction
 Back to top Crisis management is a critical organizational function. Failure can result in serious harm to stakeholders, losses for an organization, or end its very existence. Public relations practitioners are an integral part of crisis managementteams. So a set of best practices and lessons gleaned from our knowledge of crisis management would be a very

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