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  • 8/2/2019 Crisis New1


    Crisis & Risk Management


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    Crisis happens more thanwe imagine.

    They are not always easy to seeunless they affect our own lives.

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    Crisis: A working definition

    Definition of crisis is subjective, based onperception of:

    threat to one or more of an individuals or

    organizations basic values or missions,

    finite time to make decisions and take action, and

    lack of standard operating procedures - SOP orinability to implement SOP to address thesituation

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    What is a crisis?

    In general?

    For an organisation?

    For government or


    For a privatecompany?

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    What is a Crisis?

    Home here or homethere

    Physical or emotional

    May involve anIndividual or many

    Death or seriousillness

    Natural disaster

    Health Concerns


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    What is Crisis?

    A crisis is anything that

    has the potential tosignificantly impact anorganization..........

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    Is a Crisis Plan Needed?

    Does anyone reallybelieve a plan is notneeded?

    In time, you will dealwith a disaster. Willyou be ready?

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    After the Crisis

    Take some time

    Review and revamp procedures Be prepared for the next crisis!

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    A Crisis Management Plan is like aninsurance plan- you hope you never

    have to use it,

    but if you do, you want the plan to

    be the best plan possible!

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    What is Crisis Management?

    The overall coordination of an organization'sresponse to a crisis, in an effective, timelymanner, with the goal of avoiding or minimizing

    damage to the organization's profitability,reputation, or ability to operate.

    Crisis management involves identifying a crisis,

    planning a response to the crisis and confrontingand resolving the crisis.

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    Crisis management objectives

    Crisis management has four objectives:

    Reducing tension during the incident; Demonstrating corporate commitment and


    Controlling the flow and accuracy ofinformation

    Managing resources effectively

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    The Crisis Life Cycle

    Stage one: The Storm Breaks

    Stage two: The Storm Rages

    Stage three: The Storm Passes

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    1- The Breaking Crisis

    Control seems to be slipping out of the system(company).

    Lack of solid detail about the crisis. Hard-to-provide information demanded by the media,analysts and others.

    Temptation to resort to a short-term focus, to

    panic and to speculate.

    For a period of time, everyone loses perspective.

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    2- Spread and Intensification of Crisis

    Speculation and reports develop in the absenceof hard facts.

    Third parties- regulators, scientists and otherexperts add weight to the climate of opinion.

    Corporate management comes under intenseinspection from internal and external groups.

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    3- Rebuilding Needs

    To manage reputation. There are opportunitiesin a crisis to build positive perceptions thatremaining beyond the crisis period.

    The system embarks on a long-term programmeto tackle management issues andcommunication problems that worsened thecrisis.

    T f C i i

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    Types of Crisis Non Physical Damage Crisis

    a. Product Issue: Credibilityb. Product Issue: Defective

    c. Product Issue: Safety

    d. Product Issue: Tamperinge. Negative Public Perception

    f. Market Shift

    g. Financial or Cash Problemh. Industrial Relations Problem

    i. Adverse International Event

    j. Workplace Violence

    T f C i i

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    Types of Crisis

    Physical Damage Disasters

    a. Earthquake

    b. Tornado

    c. Flood

    d. Hurricane

    e. Fire

    f. Leak

    g. Power Outage

    h. Bombing

    i. Arson

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    Problems and Challenges in CrisisDecision-Making

    Surprise and hesitation. The shock of a crisis can createa delay in response that allows your critics and themedia to fill the gap with negative comment andspeculation.

    Pressure and stress must be channelled by the disciplineof a crisis strategy.

    Mistaking information distribution for communication.

    Treating key audiences as challengers.

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    Good crisis management is essential, but

    never a substitute for daily riskmanagement processes.

    Risk management processes should applyto all stakeholders, although depth anddetail may depend on the transaction and


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    Crisis management

    Despite a solid risk management process,there will be problems because we cannotpredict all crisis events and protect against


    Be prepared to deal with a crisis event andtake action immediately identifying and

    assessing issues and options and obtainingexpert advice as needed.

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    Crisis Communications

    Good communication is the heart of anycrisis management plan.

    Communication should reduce tension,

    demonstrate a corporate commitment tocorrect the problem and take control of theinformation flow.

    Crisis communications involvescommunicating with a variety ofconstitutes: the media, employees,neighbours, investors, regulators and