CRISIS MANAGEMENT 101

Definition of Crisis: A sudden and unexpected event leading to major unrest amongst the individual at the workplace is an organization crisis. In other words, crisis is defined as any emergency situation which disturbs the employees as well as leads to instability in the organization. Crisis affects an individual group, organization or society as a whole.

Characteristics of Crisis

• Crisis is a sequence of sudden disturbing events harming the organization.
• Crisis generally arises on a short notice.
• Crisis triggers a feeling of fear and threat amongst the individuals

Crisis Management Definition: The art of dealing with sudden and unexpected events which disturbs the employees, organization as well as external clients refers to Crisis Management. The process of handling unexpected and sudden changes in organization culture is called crisis management.

Need for Crisis Management

• Crisis Management prepares the individuals to face unexpected developments and adverse conditions in the organization with courage and determination.
• Employees adjust well to the sudden changes in the organization.
• Employees can understand and analyze the causes of crisis and cope with it in the best possible way.
• Crisis Management helps the managers to devise strategies to come out of uncertain conditions and also decide on the future course of action.
• Crisis Management helps the managers to feel the early signs of crisis, warn the employees against the aftermaths and take necessary precautions for the same.

Essential Features of Crisis Management

Crisis management comprises various phases: preparedness before crisis, response to limit damages during the crisis and feedback after the crisis.

Before a crisis, preparedness consists in developing knowledge and capacities in order to effectively anticipate, respond and recover from a crisis:

• Risk assessment constitutes the fundamental first step in preparedness: preparing for crisis requires identifying and analysing major threats, hazards and related vulnerabilities.
• Early warning systems based on the detection of these threats serve to activate pre-defined emergency or contingency plans
• Stockpiling, maintaining equipment and supplies, training and exercising emergency response forces and related co-ordination mechanisms through regular drills all contribute toward preparedness.
• Appropriate institutional structures, clear mandates supported by comprehensive policies and legislation and the allocation of resources for all these capacities through regular budgets are also instrumental for thorough preparedness to crisis.

Once a crisis actually materialises, the response phase begins:

• Detection of a crisis may come about through various sources (e.g. monitoring networks and early-warning systems, public authorities, citizens, media, private sector, etc.). It may build up over time or happen suddenly.
• Monitoring the development of a crisis in order to make sense of its characteristics and ascertain the operational picture requires an appropriate intelligence organisation.
• This permits the selection of appropriate contingency plans and activation of appropriate emergency response networks.
• Response efforts need to be co-ordinated, monitored and adapted as the crisis develops through the tactical and strategic oversights of crisis cells at the appropriate levels.
• Standard operating procedures (SOPs) should govern operations and co-ordination and should include information sharing and communication protocols as well as scaling-up mechanisms to mobilise additional emergency response means.
• In addition to ensuring co-operation and exerting decision-making, leadership plays a key role in crisis communication. Communicating with the media and the general public to provide sense of events, to maintain trust in the emergency responders and government, and to transmit specific messages is an essential function of leaders during crisis.

Closure

Ultimately, a crisis usually comes to a closure, ending the crisis management phase. Bringing a crisis to closure requires clear messages. After a crisis, feedback mechanisms should review in detail the actions taken to limit damages. Drawing lessons from past crisis or disastrous events helps to improve preparedness and response processes.

Types of Crisis:

1. Natural Crisis
   • Disturbances in the environment and nature lead to natural crisis.
   • Such events are generally beyond the control of human beings.
   • Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.
2. Technological Crisis
   • Technological crisis arises as a result of failure in technology. Problems in the overall systems lead to technological crisis.
   • Breakdown of machine, corrupted software and so on give rise to technological crisis.
3. Confrontation Crisis
   • Confrontation crises arise when employees fight amongst themselves. Individuals do not agree to each other and eventually depend on non productive acts like boycotts, strikes for indefinite periods and so on.
   • In such a type of crisis, employees disobey superiors; give them ultimatums and force them to accept their demands.
   • Internal disputes, ineffective communication and lack of coordination give rise to confrontation crisis.
4. Crisis of Malevolence
   • Organizations face crisis of malevolence when some notorious employees take the help of criminal activities and extreme steps to fulfill their demands.
   • Acts like kidnapping company’s officials, false rumours all lead to crisis of malevolence.
5. Crisis of Organizational Misdeeds
   • Crises of organizational misdeeds arise when management takes certain decisions knowing the harmful consequences of the same towards the stakeholders and external parties.
   • In such cases, superiors ignore the after effects of strategies and implement the same for quick results.

Crisis of organizational misdeeds can be further classified into following three types:

1. Crisis of Skewed Management Values
   1. Crisis of Skewed Management Values arises when management supports short term growth and ignores broader issues.
2. Crisis of Deception
   1. Organizations face crisis of deception when management purposely tampers data and information.
   2. Management makes fake promises and wrong commitments to the customers. Communicating wrong information about the organization and products lead to crisis of deception.
3. Crisis of Management Misconduct
   1. Organizations face crisis of management misconduct when management indulges in deliberate acts of illegality like accepting bribes, passing on confidential information and so on.

Other Types of Crisis

1. Crisis due to Workplace Violence
   • Such a type of crisis arises when employees are indulged in violent acts such as beating employees, superiors in the office premises itself.
2. Crisis Due to Rumours
   • Spreading false rumours about the organization and brand lead to crisis. Employees must not spread anything which would tarnish the image of their organization.
3. Bankruptcy
   • A crisis also arises when organizations fail to pay its creditors and other parties.
   • Lack of fund leads to crisis.
4. Crisis Due to Natural Factors
   1. Disturbances in environment and nature such as hurricanes, volcanoes, storms, flood; droughts, earthquakes etc result in crisis.
5. Sudden Crisis
   1. As the name suggests, such situations arise all of a sudden and on an extremely short notice.
   2. Managers do not get warning signals and such a situation is in most cases beyond any one’s control.
6. Smoldering Crisis
   1. Neglecting minor issues in the beginning lead to smoldering crisis later.
   2. Managers often can foresee crisis but they should not ignore the same and wait for someone else to take action.
   3. Warn the employees immediately to avoid such a situation.