Ellmlnatlng crisis completely Is Impossible but Ian Mintroff argues that a company can ensure that it can either anticipate crisis or effectively manage once they occur. Types and risk categories of crises. We can divide major crises into a number of general categories: Economic crises: strikes, market crash, major decline in stock price or decline of profit. Informational crises: loss of confidential information, tampering with computer records, loss of computer Information with regard to customers and suppliers. Physical crises: loss of key equipment, breakdowns of key equipment or plants. Human resource crises: loss of key executives or key personnel, rise in absenteeism. vandalism or accidents at workplace.
We will write a custom essay sample
on Managing crisis before they happen or any similar
topic specifically for you
Reputation crises: slander, gossip or umors damaging the corporate reputation. Crises resulting from psychopathic acts: product tampering, hostage taking, terrorism and workplace violence. Natural disasters An organization has to prepare for one crises in each of the categories above. they all are very different between categories. Companies usually prepare for crises that they know that will occur in their industry but they forget that the crisis they anticipate will not necessarily be the one they face. The food industry can be hit wit a crisis that has nothing to do with food contamination.
Fortunately, companies don’t have to repare for every specific type of crisis within each of the categories as each of the specific types within a particular category share strong similarities. But keep in mind: each crisis is capable of setting off any other crisis. 2/ Mechanisms to prepare for and respond to crises. The best form of crisis management is preparation before the crisis occurs. A company must put in place mechanisms that will help anticipate, sense, recat to, learn from and redesign organizational procedures. Signal detection mechanism: all crises send out early warning signals, mostly eak and camouflaged by noise.
Front-line employees are crucial and should be able to communicate with management about their concerns. Signal detection chain: A/ Hearing the signal: the signal detectors must be able to read a signal and determine whether it has reached a level of intensity that indicates potential danger. A companymust ask itself:’ What would count as a signal of the impending or near occurrence of a particular type of crisis? There are four types of signals : internal technical signals, internal people signals, external technical signals and external people signals.
Page 2 Managing crisis before they happen Essay
B/ Signal transmission: transmitting the signal to the rightpeople and in the These people should be able to combine different signals and piece them together in a larger whole. Other mechanisms: you also need damage containment mechanisms to keep the unwanted effects of the crisis from spreading. And, finally, you also need postmortem mechanisms that will allow to learn from the crisis and redesign the systems and mechanisms to improve crisis management in the future. 3/ Organizational systems. The author compares a company and its various systems with layers of an onion. The outermost layer is technology.
Then come the organizational structure, human factors, organizational culture and, finally, at the core the top management psychology. All these systems are intertwined, interacting. The organizational culture is a critical component and includes defense mechanisms. Examples: denial ( ‘Crises only happen to others’), disavowal (‘ Crises happen, but their impact on our organization is small’), grandiosity ( We are so big and powerful that we will be protected from crises’) or compartmentalization ( ‘Crises cannot affect the whole of our organization since he parts are independent of one another’) 4/ Don’t forget your stakeholders.See More on Management