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Crisis Management
Strategies And Risk Management

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The Net has opened worlds for businesses and consumers, but it has also created a public relations nightmare for businesses. Forums, opinion Web sites, blogs, and anything that is publishable can smear a company's name in moments. Crisis management is the procedure by which an organization deals with unexpected and disruptive events that puts in jeopardy the organization or its stakeholders. The evaluation of crisis management evolved with the large-volumes of industrial and environmental disasters in the 1980s. It is considered to be the most crucial process in public relations.

Three factors are common to a crisis:

  • (a) a threat to the organization,
  • (b) the element of surprise, and
  • (c) a short decision time.

Venette argues that "crisis is a process of transformation where the old system can no longer be maintained". Therefore, the fourth defining quality is the need for change. If change is not required, the event could more accurately be described as a failure or incident.

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Business- Crisis Management Strategies And Risk Management #Frizemedia

Remember, "Yours Is a Very Bad Hotel" presentation that described one customer's bad experience with a hotel chain? Hotels are run by humans. Humans make mistakes. It's how you handle the mistakes that can make the difference in customer service. Since the hotel's employees didn't try to help the customer overcome a bad situation, the customer lashed back and bloggers blogged it. If the hotel is on top of its game, it would unleash its crisis management (also known as reputation management) team to salvage its reputation while it can. 

It's possible for a company to overcome bad PR and come out ahead. Another strategy is to use Internet monitoring to monitor online articles regarding a company's activities to prepare for negative publicity. Some go further and monitor chat rooms, newsgroups, and online discussion forums. In contrast to risk management, which involves assessing potential threats and finding the best ways to avoid those threats, crisis management involves dealing with threats before, during, and after they have occurred. It is a discipline within the broader context of management consisting of skills and techniques required to identify, assess, understand, and cope with a serious situation, especially from the moment it first occurs to the point that recovery procedures start.

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It's like the story of the town gossip who spread false stories about its people. One day, he felt terrible and went to the chaplain (Rabbi, pastor, priest, or other, take your pick) to ask for forgiveness. The chaplain said,"I will forgive you, but you must do something first." "Take a feather pillow, cut it open, and scatter the feathers to the winds." The man thought this was a strange request, but it was a simple enough task, and he did it gladly. When he returned to tell the chaplain that he had done it, the chaplain said, "Now, go and gather the feathers. Because you can no more make amends for the damage your words have done than you can recollect the feathers." The same can happen to a company without a crisis management plan in place. It's possible to survive the crisis and thrive. 

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Crisis management is a situation-based management system that includes clear roles and responsibilities and process related organisational requirements company-wide. The response shall include action in the following areas: Crisis prevention, crisis assessment, crisis handling and crisis termination. The aim of crisis management is to be well prepared for crisis, ensure a rapid and adequate response to the crisis, maintaining clear lines of reporting and communication in the event of crisis and agreeing rules for crisis termination.

Fraud is not excusable. The techniques of crisis management include a number of consequent steps from the understanding of the influence of the crisis on the corporation to preventing, alleviating, and overcoming the different types of crisis. Crisis management consists of different aspects including:

  • Methods used to respond to both the reality and perception of crisis.
  • Establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms.
  • Communication that occurs within the response phase of emergency-management scenarios.

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