Is the process by which an organization deals with a major event that threatens to harm the organization.

Is the art of making decisions to head off mitigate the effects of such an event , often while the event itself is unfolding. This often means making decisions about your institution’s future while you are under stress and while you lack key pieces of information .

Business & Government

Educational institutions


•Natural crisis •Technological crisis • Confrontation crisis •Crisis of malevolence •Crisis of organizational misdeeds •Workplace violence • Rumors .

landslides.and the environment itself.and droughts that threaten life. are such environmental phenomena as earthquakes. tornadoes and hurricanes. volcanic eruptions. Natural crisis.floods.tsunamis.  Example : 2004 Indian ocean earthquake (Tsunami) .property. typically natural disasters considered as 'acts of God.storms.

. Technological accidents inevitably occur when technology becomes complex and coupled and something goes wrong in the system as a whole.Technological crisis are caused by human application of science and technology.

Example: Chernobyl disaster. Exxon Valdez oil spill .

and various interest groups to win acceptance of their demands and expectations.Confrontation crisis occur when discounted individuals and/or groups fight businesses. Example: Rainbow/ PUSH(People United to Serve Humanity) boycott of Nike . government.

terrorism and espionage. country. Example: 1982 Chicago Tylenol murders. kidnapping. . with the aim of destabilizing or destroying it. Sample crisis include product tampering.An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or other extreme tactics for the purpose of expressing hostility or anger toward. or economic system. malicious rumors. or seeking gain from. a company.

Example: 1982 Chicago Tylenol murders. .

Crisis occur when management takes actions it knows will harm or place stakeholders at risk without adequate precautions. Example: Martha Stewart Fraud case . Some crisis are caused not only by skewed values and deception but deliberate amorality and illegality.

Example: John DuPont .Crisis occur when an employee or former employee commits violence against other employees on organizational grounds. convicted of murdering Olympic Wrestler Dave Schultz .a multimillionaire.

Example: Procter & Gamble’s .Rumors False information about an organization or its products creates crisis hurting the organization’s reputation. Sample is linking the organization to radical groups or stories that their products are contaminated.

Erica James. or survival of the firm or some portion thereof. 1. James defines organizational crisis as “any emotionally charged situation that. once it become public. Smoldering crisis . invites negative stakeholder reaction and thereby has the potential threaten the financial well-being. reputation. Sudden crisis 2. an organizational psychologist at the university of Virginia’s Darden Graduate School of Business. identifies two primary types of organizational crisis.

sudden crisis are most often situations for which the institution and its leadership are not blamed. . Consequently.Sudden crisis are circumstances that occur without warning and beyond an institution's control.

Smoldering crisis differ from sudden crisis in that they begin as minor internal issues that. due to manager’s negligence. develop to crisis status. These are situations when leaders are blamed for the crisis and its subsequent effect on the institution in question. .


Signal detection Preparation & prevention Containment & damage control Business recovery learning .

sense early warning signals(red flag) that suggest the possibility of a crisis. Perspective-taking: the ability to consider another person’s or group’s point of view. . The detection stages of a crisis include: Sense-making: represents an attempt to create order and make sense.Signal detection is the stage in a crisis in which leaders should. of what occurs. retrospectively. but do not always.

Organizations primary mission is to prepare for and prevent the escalation of crisis events. .Preparation and prevention It is during this stage the crisis handlers begin preparing for or averting the crisis that had been foreshadowed in the signal detection stage.


financial.When crisis hits. organizations must be able to carry on with their business in the midst of the crisis while simultaneously planning for how they will recover from the damage the crisis caused. Crisis handlers not only must engage in continuity planning( determining the people. but will also actively pursue organizational resilience. . and technology resources needed to keep the organization running).

The best leaders recognize this and are purposeful and skillful in finding the learning opportunities inherent in every crisis situation. organizational decision makers adopt a learning orientation and use prior experience to develop new routines and behaviors that ultimately change the way the organization operates.In the wake of crisis. .

 Rapid response  Stay calm  Be visible  Put people before business  Tell the truth  To get to business as soon as possible .



 Customers filed more than 20 personal-injury  lawsuits and the company looked as though it could well be destroyed .  Sales plummeted by 90%.coil 0157:H7 and Odwalla fresh apple juice.  One child died and more than 60 people in the Western United States and Canada became sick after drinking the juice.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.Odwalla's stock price fell 34%.

All possible attempts were made to provide up to the minute.600 retail outlets in 7 states. This recall covered around 4.  On all media interviews.Odwalla's CEO Stephen Williamson ordered a  complete recall of all products containing apple or carrot juice.000 hits in 48 hours. This approach proved so popular that the practice of quarterly calls survived the crisis. the company had an explanatory web site (its first) that received 20. giving employees the chance to ask questions and get the latest information. accurate information. Williamson expressed  sympathy and regret for all those affected and immediately promised that the company would pay all medical costs  Internal communication: Williamson conducted regular company-wide conference calls on a daily basis.  External communications:Within 24 hours.  .

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

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

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