1

Introduction to Crisis Management

1.1 Crisis management theory

A crisis is a type of organizational phenomenon. Existing in human

society, the organization is closely connected with society in one ori-
entation. In another orientation, the organization needs to face and fix
the crisis through crisis management. Therefore, the study of organiza-
tional crisis management should be based on and focus on the organi-
zational and societal levels. The following Dual–Concentric Circles
(Figure 1.1) illustrate the theoretical framework of this book.
On looking through crisis management literature, it becomes clear
that many scholars and theorists have given definitions of crises from
various perspectives. One of the earliest definitions of a crisis is pre-
sented by Hermann (1963), who identified a crisis as an event which
includes a surprise, a threat, and a short response time. Fink et al.’s (1971)
concept of a crisis is “a threat to the system in its entirety.” Nystrom and
Starbuck’s (1984) notion of a crisis is “a threat to the organization’s own
survival.”
A crisis is an unwanted, unexpected, unprecedented, and almost
unmanageable situation (Rosenthal et al., 2001; Stern and Sundelius,
2002). Mitroff (2005) found that a crisis is an extreme event, literally
threatening an organization’s very existence. Ulmer et al. (2007: 7) define
a crisis as a specific, unexpected, and nonroutine event or series of events
that create high levels of uncertainty and threaten the organization’s
high-priority goals. Organizational crises are a pervasive threat to organi-
zational performance and sustainability (Hutchins and Wang, 2008).
The impact of a crisis is perceived by Tushman et al. (1986) as a “frame-
breaker”. Rosenthal et al. (1989) defined crisis as a serious threat to the
basic structures or fundamental values and norms of a social system.

R. Alas et al. (eds.), Crisis Management in Chinese Organizations

© Ruth Alas and Junhong Gao 2012
2 Crisis Management in Chinese Organizations

Theory of Sociology
Societal Level

Enterprise Life-Cycle &

Cultural Dimensions
Theory
Organizational Level

Theory of Crisis
Management

Figure 1.1 The dual–concentric circles

Source: Gao, J. (2010) Human Resources and Reputational Crisis in Chinese Organizations. PhD
thesis. Tallinn: EBS Print.

Some crises’ definitions are connected with public sector crises. For
example, crises are episodic breakdowns of familiar symbolic frame-
works that legitimate the pre-existing sociopolitical order (Hart, 1993);
crises are extraordinary in kind and/or scope, testing the resilience of a
society and exposing the shortcomings of its leaders and public institu-
tions (Drennan and McConnell, 2007).
Clark (1988) identified three elements of a crisis from the aspect of
its characteristics and impact: a threat to goals, reduced ability to con-
trol the environment, and a perceived time pressure. Shrivastava (1987:
194) defined a crisis as a low probability, high consequence event that
is capable of threatening organizational legitimacy, profitability, and
viability. Coombs (2006: 2) defined a crisis as an unpredictable, major
threat that can have a negative effect on the organization, industry, or
stakeholders if handled improperly.
Some management literature views a crisis as disrupting the technical
core of an organization (Thompson, 1967), or its input – throughput –
output process (Katz and Kahn, 1978). Pauchant and Mitroff (1992) com-
bined both the threat and the disrupting definitions and consider a crisis
as a disruption that physically affects a system as a whole and threatens
its basic assumptions, its subjective sense of self, and its existential core.
Keeffe and Darling (2008) describe a crisis as an unstable time or state
of affairs in which a decisive change is impending – with the distinct