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Prevention, Diagnosis and Intervention
Crisis management provides a business firm with a systematic, orderly response to crisis situations. Many crises can be prevented ± or at least coped with more effectively ± through early detection. The real challenge is not just to recognize crises, but to recognize them in a timely fashion and with a will to address the issues they represent.
shut down the business. or the public. cause physical or environmental damage.any unplanned event that can cause death or significant injuries to employees.What crisis means? Clark (1995/1996) . customers. Types of crisis: Natural disaster Technological crises Confrontation Crisis of skewed management value Crisis of deception Crisis of management misconduct . disrupt operations. or threaten the facility s financial standing or public image .
Risk Management vs. Crisis Management Source: Adapted from Wilhite (1999) .
Crisis Management Elements of Crisis Management Source : Minimal Risk Consultancy Limited .Crisis Planning vs.
if it continues. will have a significant effect on the functioning of the organization or its future interests (Brown. Crisis Management Issues analysis. study and forecast crisis issues.. either internal or external to an organization that. [Reactive approach] A crisis management series of functions or processes to identify. 1979). As such. social and economic trends and controversies. an issue is a condition or pressure.Issues Analysis vs. and set forth specific ways that would enable an organization to prevent or cope with a crisis (Darling et al.a process to alert management to emerging political. and to mobilize the company s resources to deal with them. [Proactive approach] . 1996).
Stages of a Crisis Prodromal Acute Chronic Resolution .
organisation can only take action to control the damage. iv. Prodromal .immediate action is required .symptom will offer chance for resolution .improper resolution will plague the organization or even destroy it ii.³make or break´ .symptom of the beginning of the problem/crisis .occurred when organisation failed to detect signal given in the prodromal stage .oblique and hard to detect . iii.Stages of a Crisis i.much easier to manage in this stage Acute .symptoms are quite evident and always present . .crisis have become an integral part of the body of the organization Resolution . losses are incurred Chronic .
Crisis Cycle .
planning procedures and decision making techniques .Preventive Method importance The The heart of the resolution of the crisis The least expensive but most overlooked The most sensible and manageable Core of it is information systems.
Preventive Method Strategic Forecasting Contingency Planning Issues Analysis Scenario Analysis The Efforts .
Preventive Method Strategic Forecasting Primarily involves prediction Consisted of qualitative. opinion quantification Extrapolation Simulation Cost and effect method .
Preventive Method Contingency Planning Alternative plans if event not as expected Plans for less certain events Plans for Predictable situation. in some extent Not only safeguards against crisis but also resolve when it occurs .
Preventive Method Issues Analysis Similar to contingency planning Alerts decision makers to the evolving trends Tries to make issues advantageous to company .
General Motors Develop a pair of best case and worse case List alternative courses of actions Evaluate the outcomes of all strategies Follow same procedures for worse case Combines (3) and )4) to check the desirability of each Develop strategies for the second scenario of step (2) Compare results for each of critical factors analyzed.Preventive Method Scenario Analysis Describe in details the sequence of event Consider possible outcomes from current decisions Think about favorable and unfavorable outcomes Example . .
Crisis Intervention Have primary spokesperson Companies need to have an individual designated to be the primary spokesperson for the company during a crisis situation. .Crisis Intervention Effectively use communication A very important step towards dealing with any crisis. and be honest A survey by a public relations firm in New York. Keep people informed.are more offended when a company lies about a crisis than they are about the crisis itself (Maynard. Find right time Companies should recognize that when dealing with a crisis. a firm is really focusing on reputation management(McKenzie. 1993). resulted that 95% -.1994).
and stopped buying from Columbia. their customers chose to believe the rumors.Role of communication during crisis . the company close its doors (McCune. So that. In less than a year. and believing that by not acknowledging the situation. it would go away. . 1994). The response of Columbia was to basically do nothing. rumors began to spread that there was a significant loss on its financial statements and seeking Chapter 11 Bankruptcy protection of Columbia Data Systems.An example In 1984.
Two Steps A Company Can Take: Establishing a crisis management team Appointing strategic teams for scenario analysis .
Depends on the type of crisis. This management application is still in its infancy .The current world practices No standard or uniformed practice. Application of best practice is the best way to mitigate crisis .
Essence of losses (human and financial) Any events that will lead to demise of the organization or irreversible situation. Essence of time. .Unanswered question on crisis The identification of the degree of crisis.
Swine Flu. Malaysian Airline Systems. Bakun Dam Project.1998 . Sime Darby Economic upsets 1997 financial crisis Political crisis .Highland Towers. Bukit Antarabangsa Pandemic . H1N1 Management misconduct PKFZ.Crises in MalaysiaProminent cases Natural disasters .
Timothy Coombs. Ph.Best Practice in Crisis Management 1. 5.D . 2. 3. 4. A crisis management plan Crisis management team Conduct exercise at least annually to test 1&2 Pre-draft messages Public relation process Identify alternative communication channels Source : Institute of Public Relations. Crisis Management and Communications by W. 6.
but managing a crisis we need both. Crisis management Disaster Preparedness Programme (DP) Business Continuity Planning (BC) Disaster Preparedness Programme is not the same as Business Continuity Planning. 3. 5. 6. In Boeing. 1 + 2 =Business Continuity Model DP people may not have business priority awareness Boeing integrated the functions of DP and BC . 2. 4.Boeing on 911 1.
outset Event management =responsibility of DP Recovery efforts = responsibility of BC .How it works DP has a mechanism to detect and act upon any potential threat to BC Stabilization is key for integration between DP and BC Significant factors are the roles and responsibilities of each team in the integration processes The DP team manage the event while the BC team analyze and manage the business impact Two way communication and leadership roles clearly defined.
BCP sits alongside crisis management and disaster recovery planning and is a part of an organization's overall risk management. . which is an ongoing state or methodology governing how business is conducted. whilst maintaining competitive advantage and value system integrity .BCP Business Continuity Planning Business continuity planning (BCP) is planning which identifies the organization's exposure to internal and external threats and synthesizes hard and soft assets to provide effective prevention and recovery for the organization. The objective: to ensure business continuity.
Example .Maybank BCP .
you want the plan to be the best plan possible! Thank you ! .A Crisis Management plan is like an insurance plan.you hope you never have to use it. but if you do.
Vol. Darling.(1998). Leadership & Organization Development Journal. McCune. Asian Business. 7. Sales & Marketing Management. Kash and John R. pp. July. 1. 12 December. Nation s Business. (1994). 81 No. (1994). 30 No. pp. 54-5.January. Vol. diagnosis and intervention . Dealing with disaster . Toby J.C. J. Handling a crisis effectively .179 186 . pp.References MacKenzie.19/4. Maynard. Selling under a cloud . 20-4. 72-6. (1993). R. 146 No. A. Crisis management: prevention. Vol.