5.7 Crisis Management & Contingency Planning

Crisis

situation of instability that results in major problems for a business

Crisis management

* response of an organisation to crisis situation


* being reactive to events that can cause harm to a business

Disaster recovery

organisation’s ability to respond & recover from an event that negatively affects business operations

Contingency planning

* being proactive to changes in the business environment


* involves developing a plan before an unwanted / unlikely event occurs by using “what if” questions to identify probable threats

Factors affecting effective management control

* Transparency (be open & honest during a time of crisis so it doesn’t further damage its image)
* Communication (with all key stakeholders)
* Speed (speed of response)
* Control (tests the performance of leadership team)

Contingency planning advantages

* can help minimise negative reactions and thus cost
* can save time
* helps reduce risks
* can help alleviate / minimise concerns of staff & meet their security needs

Contingency planning disadvantages

* money invested into planning could have been used better elsewhere
* uses up valuable management time & resources
* if plans are based on outdated / inaccurate data, inappropriate actions may be taken

Quantifiable risks

probable & financially measurable threats to a business (fire damage)

Unquantifiable risks

threats to a business that are impossible / prohibitively expensive to examine & measure