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CRISIS

MANAGEMENT
.………………………………….

Prepared By:
Jigar Soni
Crisis Management
Readiness

Response

Recovery
Definition

Crisis Management is the systematic


attempt to avoid organizational crisis,
or to manage those crises events that
do occur.
What is crisis ?
Crisis is major, unpredictable event that
threatens to harm an operation, staff,
customers, reputation or the legal and financial
status of an organization.

Crisis can strike any time and during this


Situation it tends to be __
Confusion, Uncertainty, fear.
Conti…
A crisis is an abnormal situation, or even
perception, which is beyond the scope of
everyday business and which threats the
operation of an organization.
Crisis is an unpredictable events but it is
not unexpected.
Crisis can affect all segment of society.

Crisis

Business
Educational
And Family
institutions
Government
Three common element of crisis :-

A threat to the organization

The element of surprises

A short decision time


Types of Crisis
Natural disaster :-
Physical destruction due to natural
disaster e.g. flood, tsunami.

Industrial accident :-
Construction collapse,
Fire, and Toxic release.
Types of Crisis
Product or service failure :-
Communication failure,
System failure,
Machine failure.

Capacity :-
Faulty or dangerous goods,
Health scare related to product of
industry.
Types of Crisis
Public Relations :-
Unwelcome media attention,
Adverse publicity in media,
Removal of CEO or key management.

Legal :-
Product liability,
Health scare,
Employee or other fraud.
Types of Crisis
Business and management :-
Hostile takeover,
sudden strike by workforce or key
supplier,
Major customer withdraws its support,
Competitors launches new product,
Sudden shortfall in demand.
Examples of crisis management
Readiness, Response, Recovery

Reliance Power IPO :-


Anil Ambani Group

Issue Price of share – Rs.450


listed Price of share -- below offer price

Situation :-
1. A threat to company
2. The element of surprise
3. A short decision time
Examples of crisis management
Readiness, Response, Recovery

Response :-
Anil Ambani announce bonus shares to
their shareholders within 7 days for build
up confidence again in Reliance Power.
Recovery :-
when he announce bonus shares, share
price go up smartly.
Examples of crisis management
Readiness, Response, Recovery

Cadbury India in the year - 2004

Some worms were found in a few bars of


Dairy Milk Chocolate.
That time demand for the dairy milk chocolate sharply
decrease and consumer loose their confidence in it.
But Cadbury India search the reason behind this incident
and they find the problem of poor packaging.

Temper proof packaging launched within 90 days.


New two commercial launched, featuring brand
ambassador Amitabh Bachchan.
Stages of crisis management

Three main
Stages

Post crisis
Pre crisis The crisis
Or
Planning itself
Recovery
Stages of crisis management
1 . Pre crisis planning:-
managers plan how to
respond to crisis
events that may
occur.
Stages of crisis management
2. The crisis itself :-

Managers respond
to crisis in hopes of
reducing its impact.
Stages of crisis management
3. Post crisis or
Recovery :-

Managers assess the


damage and attempt
to return the
organization to at
least its pre-crisis
stage.
Crisis Management Process
It is a process that requires guidelines
resources, analysis, communication, and
decision making that go beyond a single
organizational function.

Conditions that produce a crisis are


normally uncontrolled and spontaneous;
however, steps can be taken to mitigate the
effects of the Crisis by:
Anticipating areas of concern.

Establishing response guidelines to these


perceived concerns.

Responding in a timely and organized


manner.
Planning Process
Prevention:

It is the application of management


principles and systems to the
identification, understanding and control
of process hazards to prevent process
related injuries and accidents.
Preparation:-

Develop a policy that specifies the role of


corporate organizations in managing an
incident, such as: providing field support
resources to the site, role of executives,
providing a buffer for the site so they can
address the emergency; site reporting
requirements.
Crisis Management Team
A management structure, authority for
decisions and responsibility for
implementation.

The CMT should include:


Team leader
Environmental, Health and Safety (EH&S)
Public Relations

Human Resources

Legal

Security

Team Coordinator

Crisis Command Center


Implementation:-
Managing The Crisis
Initial response to a crisis – Phase 1
• What happened?
• Has a cause been identified, e.g.
accidental or intentional?
• Who is affected and what is known
about those affected?
• What response is underway and who
is involved in the response?
Managing the response – Phase 2

It has two purpose :

To develop and maintain awareness of the


crisis or emergency situation for critical
decision makers.

To coordinate support and assistance for


crisis and emergency responders.
Crisis management team process – Phase 3

If there is a critical aspect to the


management of a crisis for both immediate
support of the site or incident scene team
and long-term recovery for the company, it
is communication.

Your audience may be one or all of


the following:
Employees and their families
Customers/Clients
Contractors/Vendors
Boards of Directors
Media
Onsite Contractors/Vendors
Government and Regulatory Agencies
Local law enforcement
Emergency responders
Investors/Shareholders
Insurance Companies
MEDIA
The media is likely to be your first and most
persistent audience. They will react quickly, en
masse and relentlessly. The incident scene should
designate a single primary spokesperson, with
back-ups identified, who will manage/disseminate
crisis communications to the media, responding
government agencies, and others. This individual
should be trained in media relations prior to a crisis.
All information should be funneled through a single
source to assure that the messages being delivered
are consistent.
Communication Plan Should Have :-

The initial release should be developed


and distributed quickly. Consider using
the internet and intranet. Communications
should be timely and honest.

Regular, detailed situation update


information sharing is critical. Let the
audience know the timing of the next
update
Responsiveness to regulatory agencies and
government officials is critical.

Help agencies or officials communicate to media


and public:
~ Set up daily briefings at a designated
location
~ Consider joint news releases or media
interview opportunities
~ Consider community meetings

Speak directly to the public whenever possible


Roles Of The Crisis Management Team

1. Establish what has happened.

2. Assess the impact.

3. Resolve any conflicts of interest.

4. Identify and prioritise actions required.

5. Retain control.
Immediate Aftermath & Recovery – Phase 4

1. The assessment and business recovery


begins as soon as the emergency is
stabilized.

2. Recovered the pre situation.


Training & Maintenance
Training :-

The Crisis Management Teams should be


educated about their responsibilities and
duties. Checklists of critical actions and
information to be gathered are valuable
tools in the education and response
processes.
Maintenance :-

A plan is only effective if it is current and


practiced. Keeping a plan current is an
ongoing task that needs constant attention.
Obviously phone numbers require the most
vigilance and could be tied to a database
for easier maintenance, but there is other
information that must be tracked. Contact
information for external contacts and
procedures are likely to change.
Benefits of Effective Crisis
Management
Enhanced safety for staff and customers.

Increase staff awareness of the organization.

Increase confidence and morale within the


organization.

Protected and often enhanced reputation.

Reduced risk of litigation.


10 Crisis Mistakes
1. Don't fall apart. Unraveling is no way to hold things
together. If you become a basket case, everyone else
will, too.

2. Don't freeze or become immobilized. CM requires


action, not paralysis.

3. Don't run away -- physically, mentally or emotionally.


The first keys to recovery from mishap are presence
and visibility.

4. Don't ignore the problem. Pretending bad things didn't


happen won't make them go away. It will only make
you look like a fool on top of everything else.
5. Don't deny the obvious. Denial is a form of
lying.

6. Don't attempt a cover-up. It usually makes


things worse.

7. Avoid blaming and finger-pointing. These are


excuses, not solutions.

8. Don't procrastinate. Delaying action only adds


to the problem.
9. Don't just keep on doing what you've been
doing. When something goes wrong, more of
the same is not an antidote.

10. Don't give up. Once you surrender, there is


no possibility for triumph. During the dark
hours, avoiding costly mistakes can give you
a leg up on out-lasting disaster.
Conclusion
Crisis management deals with incidents of major
impact.

Failing to plan for incidents may result in


casualities and poor safety procedures, with
many potential losses including money,
equipment, reputation, staff morale, market
share and ultimately loss of the business itself.
So, it is the one that saves lives,
property and other assets.
The issue is not whether to have crisis
management or not, but to apply it to best suit
your organization.

How Well You


Respond
Depends On How
Well You Are
THANK YOU

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