5.7 Crisis Management (HL)

Crisis Management: Refers to the systematic steps and efforts by the organization to limit the damage from a crisis.

May be triggered by

• Human activity

• Industrial accidents

• Natural disasters

On a small local scale, a crisis may be a power cut, failure of the IT system, illness of a key member, etc.

Four related factors affect crisis management

• Transparency: stakeholders want to be kept informed, and the business needs to be honest and tell the truth, as a part of its CSR.

• Communication: Senior managers need to communicate objectively without biases.

• Speed: the managers need to act promptly, both in their actions and in their communications. A rushed decision is always not the best.

• Control: the managers have to keep the situation under control and do their best to prevent further damage.

Contingency Planning: An organization attempts to put in place procedures to deal with a crisis, anticipating it through scenario planning.

About being prepared (what if…?)

Four factors

• Cost: train staff with a wide range of events and scenarios. However, it’s less expensive than dealing with a real crisis.

• Time: In terms of planning and training.

• Risks: To the workers, machines, company, and other stakeholder. The planners need to review their plans regularly.

• Safety: Safety must be the priority, they have to keep everyone safe.

Benefits: If there’s no contingency plan, decisions will likely be made under great stress and urgency, and wrong decisions may be made. If the crisis that occurs is similar to one that has been simulated, the chances of the damage will be limited.