5.7 Crisis Management and Contingency

Contingency Planning

When an organisation creates an action plan to follow in case a crisis occurs

Crisis maangement

Involves the steps a business takes to limit the damage caused by an unpredictable event or crisis

Aim of crisis management

To return to normal business operations as swiftly as possible

Some forms of crisis

• Cyber attack

• Product recall due to defects

• War/conflict

• Employee conflict, misbehaviour or mistreatment

• Natural disaster or environmental damage

• Lawsuit or a public accusation

Factors that affect effective crisis management

• Communication

• Transparency

• Speed

• Control

Impact of contingency planning on costs

• Minimises costly mistakes

• Range of different plans for diverse situations

• Costs need to however, become a part of the budget

Impact of contingency planning on time

• Reassuring of stakeholders

• Detailed communications strategy

• Increases speed in the long-term

Impact of contingency planning on risk and safety

• Redices risk

• Keeps everyone as safe as possible