Crisis management is the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders, or the general public. The study of crisis management originated with the large scale industrial and environmental disasters in the 1980s.[1] Three elements are common to most definitions of crisis: (a) a threat to the organization, (b) the element of surprise, and (c) a short decision time.[2] Venette[3] argues that "crisis is a process of transformation where the old system can no longer be maintained." Therefore the fourth defining quality is the need for change. If change is not needed, the event could more accurately be described as a failure or incident.
In contrast to risk management, which involves assessing potential threats and finding the best ways to avoid those threats, crisis management involves dealing with threats before, during, and after they have occurred. That is, crisis management is proactive, not merely reactive. It is a discipline within the broader context of management consisting of skills and techniques required to identify, assess, understand, and cope with a serious situation, especially from the moment it first occurs to the point that recovery procedures start.
Crisis management consists of:
- Methods used to respond to both the reality and perception of crises.
- Establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms.
- Communication that occurs within the response phase of emergency management scenarios.
Crisis management methods of a business or an organization are called Crisis Management Plan.
Crisis management is occasionally referred to as incident management, although several industry specialists such as Peter Power argue that the term crisis management is more accurate. [4]
A crisis mindset requires the ability to think of the worst-case scenario while simultaneously suggesting numerous solutions. Trial and error is an accepted discipline, as the first line of defense might not work. It is necessary to maintain a list of contingency plans and to be always on alert. Organizations and individuals should always be prepared with a rapid response plan to emergencies which would require analysis, drills and exercises.[5]
The credibility and reputation of organizations is heavily influenced by the perception of their responses during crisis situations. The organization and communication involved in responding to a crisis in a timely fashion makes for a challenge in businesses. There must be open and consistent communication throughout the hierarchy to contribute to a successful crisis communication process.
The related terms emergency management and business continuity management focus respectively on the prompt but short lived "first aid" type of response (e.g. putting the fire out) and the longer term recovery and restoration phases (e.g. moving operations to another site). Crisis is also a facet of risk management, although it is probably untrue to say that Crisis Management represents a failure of Risk Management since it will never be possible to totally mitigate the chances of catastrophes occurring.
During the crisis management process, it is important to identify types of crises in that different crises necessitate the use of different crisis management strategies.[6] Potential crises are enormous, but crises can be clustered.[6]
Lerbinger[7] categorized seven types of crises
- Natural disaster
- Technological crises
- Confrontation
- Malevolence
- Organizational Misdeeds
- Workplace Violence
- Rumours
- Terrorist attacks/man-made disasters
Natural crises, typically natural disasters considered as 'acts of God,' are such environmental phenomena as earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, landslides, tsunamis, storms, and droughts that threaten life, property, and the environment itself.[6][7]
- Example: 2004 Indian Ocean earthquake (Tsunami)
Technological crises are caused by human application of science and technology. Technological accidents inevitably occur when technology becomes complex and coupled and something goes wrong in the system as a whole (Technological breakdowns). Some technological crises occur when human error causes disruptions (Human breakdowns[6]). People tend to assign blame for a technological disaster because technology is subject to human manipulation whereas they do not hold anyone responsible for natural disaster. When an accident creates significant environmental damage, the crisis is categorized as megadamage.[6] Samples include software failures, industrial accidents, and oil spills.[6][7]
- Examples: Chernobyl disaster, Exxon Valdez oil spill
Confrontation crises occur when discontented individuals and/or groups fight businesses, government, and various interest groups to win acceptance of their demands and expectations. The common type of confrontation crises is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and resisting or disobeying police.
- Example: Rainbow/PUSH’s (People United to Serve Humanity) boycott of Nike
An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or other extreme tactics for the purpose of expressing hostility or anger toward, or seeking gain from, a company, country, or economic system, perhaps with the aim of destabilizing or destroying it. Sample crises include product tampering, kidnapping, malicious rumors, terrorism, and espionage.[6][7]
- Example: 1982 Chicago Tylenol murders
Crises occur when management takes actions it knows will harm or place stakeholders at risk for harm without adequate precautions.[6] Lerbinger[7] specified three different types of crises of organizational misdeeds: crises of skewed management values, crises of deception, and crises of management misconduct.
Crises of skewed management values are caused when managers favor short-term economic gain and neglect broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business creed that focuses on the interests of stockholders and tends to disregard the interests of its other stakeholders such as customers, employees, and the community.
- Example: Sears sacrifices customer trust[clarification needed]
Crises of deception occur when management conceals or misrepresents information about itself and its products in its dealing with consumers and others.
- Example: Dow Corning’s silicone-gel breast implant
Some crises are caused not only by skewed values and deception but deliberate amorality and illegality.
Crises occur when an employee or former employee commits violence against other employees on organizational grounds.
- Example: DuPont’s Lycra[clarification needed]
False information about an organization or its products creates crises hurting the organization’s reputation. Sample is linking the organization to radical groups or stories that their products are contaminated.[6]
- Example: Procter & Gamble's Logo controversy
Erika Hayes James, an organizational psychologist at the University of Virginia’s Darden Graduate School of Business, identifies two primary types of organizational crisis.[8] James defines organizational crisis as “any emotionally charged situation that, once it becomes public, invites negative stakeholder reaction and thereby has the potential to threaten the financial well-being, reputation, or survival of the firm or some portion thereof.” [9]
- Sudden crisis
- Smoldering crises
Sudden crises are circumstances that occur without warning and beyond an institution’s control. Consequently, sudden crises are most often situations for which the institution and its leadership are not blamed.
Smoldering crises differ from sudden crises in that they begin as minor internal issues that, due to manager’s negligence, develop to crisis status. These are situations when leaders are blamed for the crisis and its subsequent effect on the institution in question. [9]
James categorises five phases of crisis that require specific crisis leadership competencies.[9] Each phase contains an obstacle that a leader must overcome to improve the structure and operations of an organization. James’s case study on crisis in the financial services sector, for example, explores why crisis events erode public trust in leadership. James's research demonstrates how leadership competencies of integrity, positive intent, capability, mutual respect, and transparency impact the trust-building process. [10]
- Signal detection
- Preparation and prevention
- Containment and damage control
- Business recovery
- Learning
Si Sense-making: represents an attempt to create order and make sense, retrospectively, of what occurs. Perspective-taking: the ability to consider another person's or group's point of view.
It is during this stage that crisis handlers begin preparing for or averting the crisis that had been foreshadowed in the signal detection stage. Organizations such as the Red Cross's primary mission is to prepare for and prevent the escalation of crisis events. Walmart has been described as an emergency relief standard bearerCitation Needed after having witnessed the incredibly speedy and well-coordinated effort to get supplies to the Gulf Coast of the United States in anticipation of Hurricane Katrina.
Usually the most vivid stage, the goal of crisis containment and damage control is to limit the reputational, financial, safety, and other threats to firm survival. Crisis handlers work diligently during this stage to bring the crisis to an end as quickly as possible to limit the negative publicity to the organization, and move into the business recovery phase.
When crisis hits, organizations must be able to carry on with their business in the midst of the crisis while simultaneously planning for how they will recover from the damage the crisis caused. Crisis handlers not only engage in continuity planning (determining the people, financial, and technology resources needed to keep the organization running), but will also actively pursue organizational resilience.
In the wake of a crisis, organizational decision makers adopt a learning orientation and use prior experience to develop new routines and behaviors that ultimately change the way the organization operates. The best leaders recognize this and are purposeful and skillful in finding the learning opportunities inherent in every crisis situation.
Successfully defusing a crisis requires an understanding of how to handle a crisis – before they occur. Gonzalez-Herrero and Pratt found the different phases of Crisis Management.
There are 3 phases in any Crisis Management are as below
- The diagnosis of the impending trouble or the danger signals.
- Choosing appropriate Turnaround Strategy.
- Implementation of the change process and its monitoring.
No corporation looks forward to facing a situation that causes a significant disruption to their business, especially one that stimulates extensive media coverage. Public scrutiny can result in a negative financial, political, legal and government impact. Crisis management planning deals with providing the best response to a crisis.[11]
Preparing contingency plans in advance, as part of a crisis management plan, is the first step to ensuring an organization is appropriately prepared for a crisis. Crisis management teams can rehearse a crisis plan by developing a simulated scenario to use as a drill. The plan should clearly stipulate that the only people to speak publicly about the crisis are the designated persons, such as the company spokesperson or crisis team members. The first hours after a crisis breaks are the most crucial, so working with speed and efficiency is important, and the plan should indicate how quickly each function should be performed. When preparing to offer a statement externally as well as internally, information should be accurate. Providing incorrect or manipulated information has a tendency to backfire and will greatly exacerbate the situation. The contingency plan should contain information and guidance that will help decision makers to consider not only the short-term consequences, but the long-term effects of every decision.[11]
When a crisis will undoubtedly cause a significant disruption to an organization, a business continuity plan can help minimize the disruption. First, one must identify the critical functions and processes that are necessary to keep the organization running. Then each critical function and or/process must have its own contingency plan in the event that one of the functions/processes ceases or fails. Testing these contingency plans by rehearsing the required actions in a simulation will allow for all involved to become more sensitive and aware of the possibility of a crisis. As a result, in the event of an actual crisis, the team members will act more quickly and effectively.[11]
Providing information to an organization in a time of crisis is critical to effective crisis management. Structural-functional systems theory addresses the intricacies of information networks and levels of command making up organizational communication. The structural-functional theory identifies information flow in organizations as "networks" made up of members and "links". Information in organizations flow in patterns called networks.[12]
Another theory that can be applied to the sharing of information is Diffusion of Innovation Theory. Developed by Everett Rogers, the theory describes how innovation is disseminated and communicated through certain channels over a period of time. Diffusion of innovation in communication occurs when an individual communicates a new idea to one or several others. At its most elementary form, the process involves: (1) an innovation, (2) an individual or other unit of adoption that has knowledge of or experience with using the innovation, (3) another individual or other unit that does not yet have knowledge of the innovation, and (4) a communication channel connecting the two units. A communication channel is the means by which messages get from one individual to another.
There has been debate about the role of apologies in crisis management, and some argue that apology opens an organization up for possible legal consequences. "However some evidence indicates that compensation and sympathy, two less expensive strategies, are as effective as an apology in shaping people’s perceptions of the organization taking responsibility for the crisis because these strategies focus on the victims’ needs. The sympathy response expresses concern for victims while compensation offers victims something to offset the suffering."[13]
James identifies five leadership competencies which facilitate organizational restructuring during and after a crisis.
- Building an environment of trust
- Reforming the organization’s mindset
- Identifying obvious and obscure vulnerabilities of the organization
- Making wise and rapid decisions as well as taking courageous action
- Learning from crisis to effect change.
Crisis leadership research concludes that leadership action in crisis reflects the competency of an organization, because the test of crisis demonstrates how well the institution’s leadership structure serves the organization’s goals and withstands crisis. [9] Developing effective human resources is vital when building organizational capabilities through crisis management executive leadership.[14]
James postulates that organizational crisis can result from discrimination lawsuits. [15] James’s theory of unequal human capital and social position derives from economic theories of human and social capital concluding that minority employees receive fewer organizational rewards than those with access to executive management. In a recent study of managers in a Fortune 500 company, race was found to be a predictor of promotion opportunity or lack thereof.[16] Thus, discrimination lawsuits can invite negative stakeholder reaction, damage the company's reputation, and threaten corporate survival.
Social media has accelerated the speed that information about a crisis can spread. The viral affect of social networks such as Twitter means that stakeholders can break news faster than traditional media - making managing a crisis harder. This can be mitigated by having the right training and policy in place as well as the right social media monitoring tools to detect signs of a crisis breaking.[17] Social media also gives crisis management teams access to real-time information about how a crisis is impacting stakeholder sentiment and the issues that are of most concern to them.
In the fall of 1982, a murderer added 65 milligrams of cyanide to some Tylenol capsules on store shelves, killing seven people, including three in one family. Johnson & Johnson recalled and destroyed 31 million capsules at a cost of $100 million. The affable CEO, James Burke, appeared in television ads and at news conferences informing consumers of the company's actions. Tamper-resistant packaging was rapidly introduced, and Tylenol sales swiftly bounced back to near pre-crisis levels.[18]
When another bottle of tainted Tylenol was discovered in a store, it took only a matter of minutes for the manufacturer to issue a nationwide warning that people should not use the medication in its capsule form.[19]
When Odwalla's apple juice was thought to be the cause of an outbreak of E. coli infection, the company lost a third of its market value. In October 1996, an outbreak of E. coli bacteria in Washington state, California, Colorado and British Columbia was traced to unpasteurized apple juice manufactured by natural juice maker Odwalla Inc. Forty-nine cases were reported, including the death of a small child. Within 24 hours, Odwalla conferred with the FDA and Washington state health officials; established a schedule of daily press briefings; sent out press releases which announced the recall; expressed remorse, concern and apology, and took responsibility for anyone harmed by their products; detailed symptoms of E. coli poisoning; and explained what consumers should do with any affected products. Odwalla then developed - through the help of consultants - effective thermal processes that would not harm the products' flavors when production resumed. All of these steps were communicated through close relations with the media and through full-page newspaper ads.
Mattel Inc., the toy maker, has been plagued with more than 28 product recalls and in Summer of 2007, amongst problems with exports from China, faced two product recall in two weeks. The company "did everything it could to get its message out, earning high marks from consumers and retailers. Though upset by the situation, they were appreciative of the company's response. At Mattel, just after the 7 a.m. recall announcement by federal officials, a public relations staff of 16 was set to call reporters at the 40 biggest media outlets. They told each to check their e-mail for a news release outlining the recalls, invited them to a teleconference call with executives and scheduled TV appearances or phone conversations with Mattel's chief executive. The Mattel CEO Robert Eckert did 14 TV interviews on a Tuesday in August and about 20 calls with individual reporters. By the week's end, Mattel had responded to more than 300 media inquiries in the U.S. alone."[20]
The Pepsi Corporation faced a crisis in 1993 which started with claims of syringes being found in cans of diet Pepsi. Pepsi urged stores not to remove the product from shelves while it had the cans and the situation investigated. This led to an arrest, which Pepsi made public and then followed with their first video news release, showing the production process to demonstrate that such tampering was impossible within their factories. A second video news release displayed the man arrested. A third video news release showed surveillance from a convenience store where a woman was caught replicating the tampering incident. The company simultaneously publicly worked with the FDA during the crisis. The corporation was completely open with the public throughout, and every employee of Pepsi was kept aware of the details.[citation needed] This made public communications effective throughout the crisis. After the crisis had been resolved, the corporation ran a series of special campaigns designed to thank the public for standing by the corporation, along with coupons for further compensation. This case served as a design for how to handle other crisis situations.[21][citation needed]
The Bhopal disaster in which poor communication before, during, and after the crisis cost thousands of lives, illustrates the importance of incorporating cross-cultural communication in crisis management plans. According to American University’s Trade Environmental Database Case Studies (1997), local residents were not sure how to react to warnings of potential threats from the Union Carbide plant. Operating manuals printed only in English is an extreme example of mismanagement but indicative of systemic barriers to information diffusion. According to Union Carbide’s own chronology of the incident (2006), a day after the crisis Union Carbide’s upper management arrived in India but was unable to assist in the relief efforts because they were placed under house arrest by the Indian government. Symbolic intervention can be counter productive; a crisis management strategy can help upper management make more calculated decisions in how they should respond to disaster scenarios. The Bhopal incident illustrates the difficulty in consistently applying management standards to multi-national operations and the blame shifting that often results from the lack of a clear management plan.[22]
The Ford-Firestone Tire and Rubber Company dispute transpired in August 2000. In response to claims that their 15-inch Wilderness AT, radial ATX and ATX II tire treads were separating from the tire core—leading to grisly, spectacular crashes—Bridgestone/Firestone recalled 6.5 million tires. These tires were mostly used on the Ford Explorer, the world's top-selling sport utility vehicle (SUV).[23]
The two companies committed three major blunders early on, say crisis experts. First, they blamed consumers for not inflating their tires properly. Then they blamed each other for faulty tires and faulty vehicle design. Then they said very little about what they were doing to solve a problem that had caused more than 100 deaths—until they got called to Washington to testify before Congress.[24]
On March 24, 1989, a tanker belonging to the Exxon Corporation ran aground in the Prince William Sound in Alaska. The Exxon Valdez spilled millions of gallons of crude oil into the waters off Valdez, killing thousands of fish, fowl, and sea otters. Hundreds of miles of coastline were polluted and salmon spawning runs disrupted; numerous fishermen, especially Native Americans, lost their livelihoods. Exxon, by contrast, did not react quickly in terms of dealing with the media and the public; the CEO, Lawrence Rawl, did not become an active part of the public relations effort and actually shunned public involvement; the company had neither a communication plan nor a communication team in place to handle the event—in fact, the company did not appoint a public relations manager to its management team until 1993, 4 years after the incident; Exxon established its media center in Valdez, a location too small and too remote to handle the onslaught of media attention; and the company acted defensively in its response to its publics, even laying blame, at times, on other groups such as the Coast Guard. These responses also happened within days of the incident.[25]
A potentially catastrophic technological problem, an incomplete crisis response plan, misleading early information, divided private and public authority, ineffective initial actions.
This could describe the current situation at the Fukushima Daiichi nuclear power plant and its six reactors. But, it also describes what happened after the April 20, 2010 explosion of the Deepwater Horizon oil rig in the Gulf of Mexico.
These two unprecedented events are stark reminders that effective crisis management involving complex science and technology is wholly dependent on well-thought-out — and actively practiced — crisis response plans. Of course, such plans will have to adapt to actual events, but without a robust plan, "seat of the pants" crisis management won't work. This is a lesson of vital importance to business and government in a host of technological activities that are potentially dangerous but economically significant. It is of even greater importance if a major act of terrorism involving nuclear, chemical, biological or cyber weapons occurs, either in private sector facilities or public spaces that impact private employers.
The fact that many of the problems relating to crisis response and crisis management recurred in Japan, with the Gulf spill still freshly in mind, shows how easy it is to talk the talk on these matters of crucial importance, and how difficult to actually execute in the turbulence of low probability but high consequence events.
Although the Japanese nuclear event is not yet a week old and information is impressionistic and fragmentary, it bears a striking resemblance in a number of dimensions to the Gulf spill which occurred almost a year ago and has since been carefully analyzed (see, for example, the Report of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, January 11, 2011):
Response Plan. Neither the Gulf spill nor the problems at the Japan nuclear plants were unthinkable. The possibility of a well blow-out was explicitly addressed by systems, processes and technology. Planning for the possibility of a severe earthquake and a subsequent tsunami were part of Japanese reliance on nuclear power. Yet, neither BP and the U.S. government nor Tokyo Electric Power Company (TEPCO) and the Japanese government had response plans which addressed the sequence of events that, though remote, were arguably foreseeable in environments where dangerous technology was located and which, in particular, addressed the additional issues outlined below.
Public or Private Responsibility? The U.S. government initially left many dimensions of crisis management and response to BP. But, the Gulf spill was a national issue, which required governmental direction, responsibility and accountability. The BP Commission properly criticized the federal government for failing to assume leadership soon enough or to act effectively in coordinating the private sector and public sector (federal, state and local) actors. In Japan, although the government has taken the lead on many aspects of the post-earthquake/tsunami crisis, there has been confusion about who is in charge at the nuclear plants. Where is the central government? Where is the nuclear regulator? As Michiyo Nakamoto pointed out in the Financial Times, the government inititially left many decisions to TEPCO (before forming a "joint" task force), and then criticized the utility even though this is now a national emergency requiring the exercise of national authority.
Confusing Information. A host of factual questions were raised by Gulf Spill: How much oil was flowing? How could the flow be stopped? Where was the oil going (surface/sub-surface)? How could it be contained or removed? How could damage to environment/people/property be eliminated or mitigated? But for a significant period of time, responses from the company and the government were confusing. The U.S. government needed a central authority which used expert working groups, and which made clear to the public what was known, what was unknown, what process was in place for improving knowledge, and when there would be regular updates on those issues. A similar set of problems bedevils Japan. There are critical questions about condition of the reactors; possible physical and chemical reactions in the reactor areas; actions being take to reduce those risks; radiation releases; health implications. Yet there has been a welter of voices from the government and industry which has left Japanese citizens — and the world — confused. Again, a single central authority needs to have seized control of the information flow and been as candid and explicit as possible about what is known, what isn't known, and how information gaps are being filled.
Decision-Making Processes. As noted, there was substantial confusion for weeks after the Gulf spill about whether the company or different parts of government were making decisions. The decision-making processes on a host of crisis response issues (see preceding paragraph) were not set out clearly for the public — including comparison of options — and led to a perception of drift and lack of direction during a major national catastrophe. A similar concern appears to apply in Japan, where opaqueness prevails about who is making decisions about what options, with what parties at the table, and with which other parties advising (from around the world). This, too, contributes to the growing sense that the public and private authorities do not have the situation in hand (and, in fact, may be losing control).
Implementation and Resources. In the Gulf, there were also serious issues about which private and public sector actors would implement which decisions — and about what resources were necessary. Indeed, just the lack of resource preparedness increased the severity of problems of containment and damage mitigation. In Japan, it is very hard to tell at the moment who is responsible for carrying out which decisions at the nuclear plants as TEPCO has been shifting employees around the plant (leaving, at the moment, 50 heroic technicians to deal with four reactors in stress and two more at risk at the Fukushima Daiichi plant) — and it is far from clear if regulatory experts (from inside or outside Japan) are on or near the site at all.
These are issues which every company with potentially catastrophic processes, products, or plants needs to answer with a special team of "worst case" analysts. Such analysis then has to be transformed into a response plan. Where the issue involves government — and in most cases it will — the company needs to coordinate its planning with federal, state and local authorities. After 9/11, many companies analyzed these issues with respect to terrorist acts at their facilities or terrorist acts which, if not directed at the company, could still have significant impact on people, facilities, information and supply chain.
Yet, many experts in crisis response and crisis management would say that without practice, without simulations, these response plans merely gather dust and are not effective when the hundred-year event occurs. In the military, war games can be a vital tool for learning how to respond to crisis situations. We need a "war game" mentality in the private sector to address the severe conceptual and operational problems in crisis response and crisis management which the Gulf Spill and the Japan nuclear events so starkly illustrate. Ben W. Heineman, Jr.
Ben Heineman has held senior positions in business, law, and government, is a senior fellow at Harvard's Law and Kennedy Schools, and is author of High Performance With High Integrity (Harvard Business Press, 2008)
One of the foremost recognized studies conducted on the impact of a catastrophe on the stock value of an organization was completed by Dr Rory Knight and Dr Deborah Pretty (1996, Templeton College, University of Oxford - commissioned by the Sedgewick Group). This study undertook a detailed analysis of the stock price (post impact) of organizations that had experienced catastrophes. The study identified organizations that recovered and even exceeded pre-catastrophe stock price, (Recoverers), and those that did not recover on stock price, (Non-recoverers). The average cumulative impact on shareholder value for the recoverers was 5% plus on their original stock value. So the net impact on shareholder value by this stage was actually positive. The non-recoverers remained more or less unchanged between days 5 and 50 after the catastrophe, but suffered a net negative cumulative impact of almost 15% on their stock price up to one year afterwards.
One of the key conclusions of this study is that "Effective management of the consequences of catastrophes would appear to be a more significant factor than whether catastrophe insurance hedges the economic impact of the catastrophe".
While there are technical elements to this report it is highly recommended to those who wish to engage their senior management in the value of crisis management.[26]
To address such shareholder impact, management must move from a mindset that manages crisis to one that generates crisis leadership. [8] Research shows that organizational contributory factors affect the tendency of executives to adopt an effective "crisis as opportunity" mindset. [27] Since pressure is both a precipitator and consequence of crisis, leaders who perform well under pressure can effectively guide the organization through such crisis. [28]
James contends that most executives focus on communications and public relations as a reactive strategy. While the company’s reputation with shareholders, financial well-being, and survival are all at stake, potential damage to reputation can result from the actual management of the crisis issue.[8] Additionally, companies may stagnate as their risk management group identifies whether a crisis is sufficiently “statistically significant”. [29] Crisis leadership, on the other hand, immediately addresses both the damage and implications for the company’s present and future conditions, as well as opportunities for improvement. [9]
Corporate America is not the only community that is vulnerable to the perils of a crisis. Whether a school shooting, a public health crisis or a terrorist attack that leaves the public seeking comfort in the calm, steady leadership of an elected official, no sector of society is immune to crisis. In response to that reality, crisis management policies, strategies and practices have been developed and adapted across multiple disciplines.
In the wake of the Columbine High School Massacre, the September 11 attacks in 2001, and shootings on college campuses including the Virginia Tech massacre, educational institutions at all levels are now focused on crisis management.[30]
A national study conducted by the University of Arkansas for Medical Sciences (UAMS) and Arkansas Children’s Hospital Research Institute (ACHRI) has shown that many public school districts have important deficiencies in their emergency and disaster plans (The School Violence Resource Center, 2003). In response the Resource Center has organized a comprehensive set of resources to aid schools is the development of crisis management plans.[citation needed]
Crisis management plans cover a wide variety of incidents including bomb threats, child abuse, natural disasters, suicide, drug abuse and gang activities – just to list a few.[31] In a similar fashion the plans aim to address all audiences in need of information including parents, the media and law enforcement officials.[32]
Historically, government at all levels – local, state, and national – has played a large role in crisis management. Indeed, many political philosophers have considered this to be one of the primary roles of government. Emergency services, such as fire and police departments at the local level, and the United States National Guard at the federal level, often play integral roles in crisis situations.
To help coordinate communication during the response phase of a crisis, the U.S. Federal Emergency Management Agency (FEMA) within the Department of Homeland Security administers the National Response Plan (NRP). This plan is intended to integrate public and private response by providing a common language and outlining a chain-of-command when multiple parties are mobilized. It is based on the premise that incidences should be handled at the lowest organizational level possible. The NRP recognizes the private sector as a key partner in domestic incident management, particularly in the area of critical infrastructure protection and restoration.[33]
The NRP is a companion to the National Incidence Management System that acts as a more general template for incident management regardless of cause, size, or complexity.[33]
FEMA offers free web-based training on the National Response Plan through the Emergency Management Institute.[34]
Common Alerting Protocol (CAP) is a relatively recent mechanism that facilitates crisis communication across different mediums and systems. CAP helps create a consistent emergency alert format to reach geographically and linguistically diverse audiences through both audio and visual mediums.[citation needed]
Historically, politics and crisis go hand-in-hand. In describing crisis, President Abraham Lincoln said, “We live in the midst of alarms, anxiety beclouds the future; we expect some new disaster with each newspaper we read.”[citation needed]
Crisis management has become a defining feature of contemporary governance. In times of crisis, communities and members of organizations expect their public leaders to minimize the impact of the crisis at hand, while critics and bureaucratic competitors try to seize the moment to blame incumbent rulers and their policies. In this extreme environment, policy makers must somehow establish a sense of normality, and foster collective learning from the crisis experience.[35]
In the face of crisis, leaders must deal with the strategic challenges they face, the political risks and opportunities they encounter, the errors they make, the pitfalls they need to avoid, and the paths away from crisis they may pursue. The necessity for management is even more significant with the advent of a 24-hour news cycle and an increasingly internet-savvy audience with ever-changing technology at its fingertips.[35]
Public leaders have a special responsibility to help safeguard society from the adverse consequences of crisis. Experts in crisis management note that leaders who take this responsibility seriously would have to concern themselves with all crisis phases: the incubation stage, the onset, and the aftermath. Crisis leadership then involves five critical tasks: sense making, decision making, meaning making, terminating, and learning.[35]
A brief description of the five facets of crisis leadership includes:[36]
- Sense making may be considered as the classical situation assessment step in decision making.
- Decision making is both the act of coming to a decision as the implementation of that decision.
- Meaning making refers to crisis management as political communication.
- Terminating a crisis is only possible if the public leader correctly handles the accountability question.
- Learning, refers to the actual learning from a crisis is limited. The authors note, a crisis often opens a window of opportunity for reform for better or for worse.
There are a number of professional industry associations that provide advice, literature and contacts to turnaround professionals and academics. Some are:
1. Turnaround Management Society (International / Focus on Europe)
2. Institute for Turnaround (England)
3. Turnaround Management Association (International)
4. Institut für die Standardisierung von Unternehmenssanierungen (Germany)
- ^ Shrivastava, P. Mitroff, I.I., Miller, D. and A. Miglani, " Understanding industrial crises".Journal of Management Studies, 1988, 25, 4, 285-304.
- ^ Seeger, M. W.; Sellnow, T. L., & Ulmer, R. R. (1998). "Communication, organization and crisis". Communication Yearbook 21: 231–275.
- ^ Venette, S. J. (2003). Risk communication in a High Reliability Organization: APHIS PPQ's inclusion of risk in decision making. Ann Arbor, MI: UMI Proquest Information and Learning.
- ^ "Incident or crisis? Why the debate?". http://www.continuitycentral.com/feature0447.htm.
- ^ Alan B. Bernstein and Cindy Rakowitz (2012). Emergency Public Relations: Crisis Management In a 3.0 World. p. 5. ISBN 978-1469159546
- ^ a b c d e f g h i Coombs, W. T. (1999). Ongoing crisis communication: Planning, managing, and responding. Thousand Oaks, CA: Sage.
- ^ a b c d e Lerbinger, O. (1997). The crisis manager: Facing risk and responsibility. Mahwah, NJ: Erlbaum.
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