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What is the purpose of creating an ecomap during a crisis?
What is the purpose of creating an ecomap during a crisis?
Tertiary stakeholders are considered the primary or direct stakeholders affected by a crisis.
Tertiary stakeholders are considered the primary or direct stakeholders affected by a crisis.
False
What are the four strategic considerations in crisis management referred to as the 'Four C's'?
What are the four strategic considerations in crisis management referred to as the 'Four C's'?
Crisis, Communication, Control, and Confidence
In the 1982 Tylenol poisoning crisis, the company effectively applied the ____________ to manage the situation.
In the 1982 Tylenol poisoning crisis, the company effectively applied the ____________ to manage the situation.
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Match the following stages of crisis with their descriptions:
Match the following stages of crisis with their descriptions:
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What was the drop in Johnson & Johnson's market share of the pain-reliever market?
What was the drop in Johnson & Johnson's market share of the pain-reliever market?
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Johnson & Johnson's initial crisis response involved recalling over 31 million bottles of Tylenol nationwide.
Johnson & Johnson's initial crisis response involved recalling over 31 million bottles of Tylenol nationwide.
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What was the cost incurred by Johnson & Johnson for the recall of their products?
What was the cost incurred by Johnson & Johnson for the recall of their products?
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Johnson & Johnson replaced their capsules with __________ as part of their five-point plan.
Johnson & Johnson replaced their capsules with __________ as part of their five-point plan.
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Match the following actions with their description:
Match the following actions with their description:
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What is the first step in crisis communication?
What is the first step in crisis communication?
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Business Continuity Planning (BCP) only focuses on technological aspects.
Business Continuity Planning (BCP) only focuses on technological aspects.
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Which of the following is the first stage in Fink’s Crisis Lifecycle?
Which of the following is the first stage in Fink’s Crisis Lifecycle?
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What is a key element to consider after a crisis has occurred?
What is a key element to consider after a crisis has occurred?
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Mitroff's Five Stages of Crisis Management includes a stage for learning from the crisis.
Mitroff's Five Stages of Crisis Management includes a stage for learning from the crisis.
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The process that allows critical business functions to continue with planned levels of interruption is known as __________.
The process that allows critical business functions to continue with planned levels of interruption is known as __________.
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What is the primary purpose of segmenting processes into stages during crisis management?
What is the primary purpose of segmenting processes into stages during crisis management?
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Match the following roles in crisis management:
Match the following roles in crisis management:
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The stage that involves detecting warning signs of a potential crisis is called the ______.
The stage that involves detecting warning signs of a potential crisis is called the ______.
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Which of the following is NOT a strategy for managing a crisis?
Which of the following is NOT a strategy for managing a crisis?
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Disaster Recovery Planning (DRP) encompasses all aspects of Business Continuity Management.
Disaster Recovery Planning (DRP) encompasses all aspects of Business Continuity Management.
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Match each stage of crisis management with its description:
Match each stage of crisis management with its description:
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Name one requirement for Business Continuity Management as per business governance.
Name one requirement for Business Continuity Management as per business governance.
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What is included in Jack Welch's approach to crisis management?
What is included in Jack Welch's approach to crisis management?
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The Chronic stage of crisis management is when the crisis is no longer a concern to stakeholders.
The Chronic stage of crisis management is when the crisis is no longer a concern to stakeholders.
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What is the focus of the Crisis breakout stage in Fink's model?
What is the focus of the Crisis breakout stage in Fink's model?
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What is the primary goal of negotiation?
What is the primary goal of negotiation?
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An effective way to retain brand loyalty is to avoid apologizing to customers.
An effective way to retain brand loyalty is to avoid apologizing to customers.
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What should be done first when a brand faces a crisis?
What should be done first when a brand faces a crisis?
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The negotiation situation often includes two or more parties with _______ that need to be resolved.
The negotiation situation often includes two or more parties with _______ that need to be resolved.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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What is one essential action to take after resolving a customer issue?
What is one essential action to take after resolving a customer issue?
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Listening to customer feedback is unnecessary once a problem has been resolved.
Listening to customer feedback is unnecessary once a problem has been resolved.
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What factors can be considered tangible in negotiation?
What factors can be considered tangible in negotiation?
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What is NOT one of the five components of most public recovery strategies?
What is NOT one of the five components of most public recovery strategies?
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J&J's strategy included portraying themselves as an unfair victim of external attacks.
J&J's strategy included portraying themselves as an unfair victim of external attacks.
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What significant legislation was passed in response to the Tylenol crisis in 1983?
What significant legislation was passed in response to the Tylenol crisis in 1983?
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J&J offered _____ for victims and families as part of their remediation strategy.
J&J offered _____ for victims and families as part of their remediation strategy.
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Match the following strategies with their descriptions:
Match the following strategies with their descriptions:
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Which of the following was a way J&J maintained employee morale?
Which of the following was a way J&J maintained employee morale?
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Cynicism indicates that most people believe companies take responsibility for crises.
Cynicism indicates that most people believe companies take responsibility for crises.
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What was a key lesson learned from J&J's response to the crisis?
What was a key lesson learned from J&J's response to the crisis?
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It is important to gather facts and disseminate information from one _____ center during a crisis.
It is important to gather facts and disseminate information from one _____ center during a crisis.
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How did J&J aim to address public concern about product safety?
How did J&J aim to address public concern about product safety?
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Study Notes
Crisis Management in Business and Industry
- Crisis refers to sudden, unplanned events that significantly disrupt an organization.
- According to Barton, a crisis is any event that could severely harm people, reputation, or financial standing of an organization.
- Crisis characteristics include suddenness, short notice, fear-inducing nature, serious consequences, lack of information, need for a quick response, and unpredictability.
Types of Crisis
- Physical Damage Crisis: A crisis involving physical damage to individuals, organizations, or society. Natural disasters (floods, earthquakes) are examples.
- Natural Crisis: Events like floods and earthquakes, are typically beyond human control and are mostly unpredictable.
- Earthquake: A sudden release of energy within the earth's crust, producing waves, often triggered by volcanic activity, landslides, mining, or nuclear tests.
- Drought: Prolonged periods of abnormal low rainfall, leading to water shortages.
- Floods: Overflowing of large bodies of water beyond their normal limits.
- Non-Physical Damage Crisis: Crises not involving physical harm but impacting reputation, finances, or the organization's operations.
- Product Issues Crisis: Failure of a product despite proper R&D techniques.
- Economic Crisis: Organizations experiencing cash flow problems.
- Human Resources Crisis: Disputes involving lower-level workers such as strikes, violence, harassment, discrimination.
- Organizational Misconduct: Crises stemming from deceptive practices, broken promises, or unethical management conduct.
- Management Misconduct: Crises where management engages in illegal activity.
Stages of Crisis
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Pre-crisis Stage: An opportunity to anticipate negative situations that could escalate into crises, and alert relevant superior officers. A proactive stage of mitigating crises by discovering negative conditions before they become a crisis.
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Solutions: When senior officers are aware of a situation and do not wish for it to be public or visible, maintaining this within the organization.
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Acute-Crisis Stage: The stage at which a crisis becomes visible outside an organization.
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Solutions: Taking immediate control and action to resolve the crisis.
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Post-crisis Stage: Evaluating organizational performance and recovering from the losses incurred.
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Solutions: Recouping losses and evaluating effects/performance.
Consequences of Crisis
- Loss of Capital
- Loss of Assets
- Infrastructure Destruction
- Threatened Stakeholders
- Damaged Reputation
- Lack of Cash Flow
Financial Crisis
- A wide-ranging situation where considerable financial assets lose a significant proportion of their worth.
Consequences of Financial Crisis
- Complementarities in Financial Markets
- Leverage
- Asset-Liability Mismatch
- Uncertainty and Herd Behavior
- Regulatory Failures
- Contagion
- Recessionary Effects
What is Crisis Management?
- A process where an organization addresses a major event that threatens the organization, its stakeholders, or the community.
- Primarily focuses on prevention, survival, and a successful outcome.
Objectives of Crisis Management
- Identifying potential crises.
- Preparing for crises.
- Determining risk.
- Understanding crisis consequences.
- Minimizing crisis impact.
- Analyzing crisis probabilities.
Elements of Crisis Management
- Understanding
- Crisis Management Planning
- Contingency Planning
- Business Continuity Planning
- Inequality
- Social Media
- Role of Apologies
- Structural Functional Systems
Crisis Communication
- The process of communicating with the public and stakeholders during a crisis to mitigate negative impacts on reputation.
- Teams often include CEOs, Head of Public Relations, Vice Presidents/Managers, Safety/Security officers, and Company Lawyers.
Steps in Crisis Communication
- Anticipate crisis.
- Identify crisis communications team.
- Identify spokesperson.
- Spokesperson training.
- Establish systems.
- Identify stakeholders.
- Develop holding statement.
- Assess the crisis situation.
- Finalize and adapt key messages.
- Post-crisis analysis.
Strategies for Managing Crisis
- Determine the crisis.
- See the "big picture."
- Gather a relevant team.
- Set a timeline.
- Develop a procedural manual.
- Seek external experts.
- Speak to media.
- Fine-tune communication.
- Protect reputation.
Business Continuity Management
- A holistic set of management processes identifying potential disruptions and creating frameworks for resilience.
- Aims to safeguard stakeholders' interests and value.
BCM Framework
- A structured approach for designing, developing, implementing, and maintaining infrastructure, resources, policies, and strategies to effectively respond to, recover, resume, restore, and normalize mission-critical operations.
Why is BCP Needed?
- Good Corporate Governance
- Safeguarding Assets and Liabilities
- Stakeholder Interests
- Business Requirements (Local & International)
- Partner Requirements
- Customer Requirements
Business Requirements
- Focuses on business resilience and continuity, essential for future operations.
- Impacted by regulations like the Sarbanes-Oxley Act in the U.S..
BCM Modules (Project Management)
- Project Initiation
- Risk Assessment
- Business Impact Analysis
- Develop BC Strategies
- Establish Alternate Facility
- Plan Development
- Education and Training
- Scenario Testing
- Plan Maintenance
BCP - Composition
- Emergency Management
- Crisis Management
- Contingency Plans
- Disaster Recovery Plans
- Business Resumption Plans
Stages of Crisis
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Prodromal: Pre-crisis phase that involves early warning signals (risk cues).
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Crisis: Period when the triggering event occurs.
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Chronic: The prolonged aftermath of the crisis.
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Resolution: When the crisis no longer concerns stakeholders
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Recovery: Return to normalcy in operations, and
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Learning: Reviewing practices and procedures for possible improvement to operations.
Negotiation Fundamentals
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Overview: Negotiations are daily interactions focused to share or divide resources, create new solutions or resolve conflicts. People may miss that they are in a negotiation context and avoid it.
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Style and Approach: Negotiation centers around resolving opposing interests through communication and bargaining techniques (win-win).
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Characteristics: A negotiation situation involves two parties (individuals, groups, or organizations), seeks resolution to a perceived needs conflict, has expectations that a good deal can be reached through the process, and involves a give-and-take.
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Interdependence: Most relationships fall along a spectrum of independent, dependent, or interdependent. Interdependence emphasizes the mutual needs and influence present between parties, resulting in potential conflicts due to competing needs and goals.
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Types of Interdependence: A zero-sum, where one party's gain is another's loss (competitive). A non-zero-sum, where mutual benefits are possible (collaborative or integrative).
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Alternatives: A negotiator's BATNA (Best Alternative To a Negotiated Agreement) is essential to walk away from negotiations without significant losses, and improves their power in the negotiation. This shapes the level of interdependence during negotiations.
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Mutual Adjustment and Concession Making: Parties attempt to influence each other, frequently commencing with predetermined positions that modify over the course of the negotiation process. Concession making constrains the range of acceptable bargaining settlements.
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Dilemmas: Negotiations present honesty and trust dilemmas. How much truth should be disclosed? How much can the other party be trusted? Strategies to cultivate trust include managing perceptions of the proposed results and implementing fair processes.
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Value Creation and Claiming: Distributive bargaining focuses on claiming the greatest portion of the desirable elements, while integrative negotiation seeks to create value by exploring options for mutual benefit. Effective negotiators can and should switch between these paradigms as needed.
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Creating Value: Value is created through differences in interests, in judgments about the future, risk tolerance, and time preference.
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Conflict: Conflict arises from incompatible goals and interference in interdependent relationships. Conflicts can be categorized based on the parties involved (intrapersonal, interpersonal, intragroup, intergroup.)
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Conflict Management: Effective conflict management requires awareness of the sources of conflict, the differing styles of responding, and how conflicts should be approached (yielding, problem-solving, contending, inaction, compromise).
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Factors in Resolving Conflicts: Factors influencing the difficulty or ease of resolving conflicts include issues of principle, stakes, type of conflict, length of relationship, and existence of a neutral party involved in the negotiation process.
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Dual Concerns Model: A model that considers both parties' concern for their own outcomes and the concern for the satisfaction of others. Different strategies, like yielding, contending, problem-solving, inaction, and compromise, apply differently according to the importance of the issue and the power relationship between parties.
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Description
Test your knowledge on crisis management strategies and communication techniques through this engaging quiz. You'll explore key concepts like the Four C's of crisis management, stakeholder roles, and real-world examples such as the Tylenol crisis. Perfect for students and professionals alike!
