Chapter 4

Management Of Crisis
 Meaning of Crisis Management

• Crisis management refers to the identification of a threat to an

organization and its stakeholders in order to mount an effective
response to it.
Building a Crisis Management Plan

• People
• Facilities/Critical Infrastructure
• Technology
• Business
• Brand Reputation
 Gaps in Crisis Plan

• Human error
• Email fatigue
• The time-consuming
• Dispersed workforce
Steps to Create a Crisis Management Plan

• Assess your risks.

• Determine the business impact
• Identify contingencies
• Build the plan.
• Familiarize users.
• Revisit the plan frequently
 Case Study 1
• In February 2018, KFC had to close more than half of its 900 stores
in the United Kingdom because of a shortage of chicken. The social
and mainstream media enjoyed the irony of a chicken shop without
any chicken and went to town on the story. The cause was a delivery
problem after the chain switched its contract to DHL which said that
due to ‘administrative problems’ a number of deliveries were
cancelled or delayed.
• Loyal customers vented on Twitter and took their families to
McDonalds. Some even complained to their local politicians. Then
KFC, even while struggling to get the restaurants re-opened,
managed to switch the narrative entirely. It ran an apology
advertisement that was extremely funny (especially to the brand’s
core younger consumers) while taking ownership of the problem.
• The company was widely applauded by customers and the media for
its deft handling of the situation and became the poster child for how
well to handle a crisis.
 Case Study 2
• In 2016, Korean electronics company Samsung faced a crisis when
its Galaxy Note 7 smartphones exploded due to a battery problem.
Sales slumped as airlines banned passengers from carrying the
phone on board. Samsung responded by immediately taking
accountability, being transparent about not immediately knowing the
cause, and vowing to determine the problem.
• The company put 700 engineers on the problem and opened the
research to third parties. When the problem was identified, the
company communicated the issue clearly and introduced quality
assurance and safety features.
• Samsung also launched a campaign aimed at tying its brand image
to a larger purpose and improving its culture. In the next year,
Samsung’s brand value rose 9 percent, according to Interbrand, and
its Galaxy S8 yielded record profits the following year.
 Case Study 3
• Industrial Disaster Crisis Management Example: Bhopal Gas
Leak

• In 1984, a toxic gas leak from a Union Carbide India pesticide plant
in Bhopal, India killed up to 30,000 people from immediate and
long-term effects (according to estimates) and injured about
575,000. The accident is one of the world’s worst industrial
disasters.

• The leak was caused by the introduction of water into a chemical

tank, which resulted in a heat-generating, runaway reaction. Several
inquiries found evidence of company negligence, but an internal
analysis blamed employee sabotage.
• Researchers have written extensively about the accident, and some
of the lessons cited are universally helpful in crisis management