CRISIS MANAGEMENT

Sebin Sebastian 1st MBA – A Batch

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INTRODUCTION
 Crisis management includes the development

of plans to reduce the risk of a crisis occurring and to deal with any crises that do arise, and the implementation of these plans so as to minimize the impact of crises and assist the organization to recover from them.

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Crisis can affect all segment of society. 3 .

Domestic Crisis Industrial Crisis Natural Crisis Professional Crisis Social Crisis Financial Crisis 4 . 6. 3. 5. 2. 4.TYPES OF CRISIS  On the Basis of Social Settings: 1.

5 .Three Main Stages PHASES Pre crisis Crisis response Postcrisis.

This is part of an Organization’s risk management program. • Prevention involves seeking to reduce known risks that could lead to a crisis. • Preparation involves creating the crisis management plan. selecting and training the crisis management team. and conducting exercises to test the Crisis management plan and crisis management team.Pre-Crisis Phase • The pre-crisis phase is concerned with prevention and preparation. .

That research has been divided into two sections:  The initial crisis response and  Reputation repair and behavioral intentions .Crisis Response  The crisis response is what management does and says after the crisis hits.  A great deal of research has examined the crisis response. Public relations plays a critical role in the crisis response by helping to develop the messages that are sent to various publics.

. the organization is returning to business as usual.  The crisis is no longer the focal point of management’s attention but still requires some attention.Post-Crisis Phase  In the post-crisis phase.

Examples of Crisis Management Odwalla Cadbury 9 .

Gerry Percy and Bonnie Bassett began squeezing fresh oranges on a $200 hand juicer. The company had established a strong brand with enormous customer loyalty. 10 .Case Study-Odwalla  Odwalla is the health-conscious juice company which began a couple of decades ago when Greg Stelt enpohl. The company was growing strongly with annual sales rising 30% per year and approaching $90m.

coil 0157:H7 and Odwalla fresh apple juice. 11 .  Odwalla juice e-coil outbreak in 1996  Health officials in Washington state informed the company that they had discovered a link between several cases of E.Case Study Cont….

Case Study Cont….  Sales plummeted by 90%. 12 . Odwalla's stock price fell 34%.  Customers filed more than 20 personal-injury lawsuits and the company looked as though it could well be destroyed.  One child died and more than 60 people in the Western United States and Canada became sick after drinking the juice.

This recall covered around 4.  On all media interviews. Williamson expressed sympathy and regret for all those affected and immediately promised that the company would pay all medical costs.What did the company do? Odwalla's CEO Stephen Williamson ordered a complete recall of all products containing apple or carrot juice.  13 .600 retail outlets in 7 states.

 All possible attempts were made to 14 .000 hits in 48 hours.  This approach proved so popular that the practice of quarterly calls survived the crisis. External communications: Within 24 hours. giving employees the chance to ask questions and get the latest information.What did the company do? (cont.. the company had an explanatory web site (its first) that received 20.) Internal communications: Williamson conducted regular company-wide conference calls on a daily basis.

Fixing the Problem  The next step was to tackle the problem of contamination.  The company switched from unpasteurized juice to a process called "flash pasteurization" which would guarantee that E-coli had been destroyed without compromising flavor. the company had in place what some experts described as "the most comprehensive quality control and safety system in the fresh juice industry."  The new process was communicated in all advertising and public outreach campaigns 15 .  Within months of the outbreak.

but even these will concede that as an exercise in crisis management. 16 .Conclusion  The company's values spoke of nourishing people .  There are critics who refuse to credit the company with any integrity whatsoever .  The year after the crisis. Odwalla was voted "Best Brand Name in the Bay Area" by San Francisco Magazine.and when the crisis came it was an adherence to honest. straight talking and accepting responsibility that helped to get the company through. Odwalla stands as an example of best practice that few can match. This was the first indication amongst many that Odwalla's reputation had survived.

Diary Milk THE WORMYThe Worm Controversy CONTROVERSY 17 .

Andheri Vyapar Manch.RISE OF THE CONTROVERSY  State FDA Commissioner Uttam     18 Khobragade said a group of people approached him with chocolates that had worms in them. Vile Parle. vice-president. Sebastian Fernandez had purchased Cadbury Dairy Milk chocolate from a shop at Pick and Pay. Marve then contacted the FDA and gave them the sample. Fernandez complained to the shopkeeper Jitendra Shah who later informed Pravin Marve. . FDA Joint Commissioner Hindurao Salunkhe said Cadbury's Talegaon plant will also be inspected. Fernandez discovered that the chocolate (Batch No28F3I10703) had worms in it.

000 tones of chocolates during Diwali) plummeted 30 per cent.EFFECTS OF THE CONTROVERSY ON CADBURY  The state Food and 19 Drug Administration has ordered abduction of Cadbury's Dairy Milk chocolates from all over Maharashtra after worms were found in two of them in Mumbai.  bad storage practices by retailers and distributors that had led to the worms.  Festival season sales (Cadbury sells almost 1. .

 tell consumers about improper storage  Bharat Puri. went to media offices around the country 20 . Cadbury's mild-mannered MD.ROLE OF THE PUBLIC RELATIONS  NOT DENYING THE FACT  Maharashtra Food and Drug Administration had given a clean chit to the company's two plants in the state.

a retail education programme. 21  company also carried out quality checks .) “Steps to ensure quality & regain the confidence”  new double packaging even for the smallest offering  wrapped in aluminium foil and enclosed in a poly flow pack.ROLE OF THE PUBLIC RELATIONS (cont…)  TAKING PRECAUTIONS  company launched Project Vishwas.(generating awareness and providing assistance in improving storage quality. which was sealed on all sides.

ROLE OF THE PUBLIC RELATIONS (cont…)  GAINING BACK TRUST  AB played a pivotal role in all communication relating to Cadbury's products and brands  created a campaign which aimed for both rational and emotional appeal. 22 .

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The recovery began in May 2004 when Cadbury's value share went up to 71 per cent. 24 .4 per cent. Between October 2003 and January 2004.ROLE OF THE PUBLIC RELATIONS  BENEFITS OF A GOOD CAMPAIGN  The company bounced back soon after the campaign hit the screens. Cadbury's value share melted from 73 per cent in to 69.

It needs strong leadership by well-trained and rehearsed individuals. Everyone within an organisation should know what his or her role is in a crisis and should be prepare to deal with one. 25 .Conclusion A crisis management plan generates order out of chaos.

THANK YOU ! 26 .

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