Crisis management refers to managing unexpected events that threaten an organization. A crisis can seriously harm an organization's reputation, finances, or operations. There are three stages of a crisis: pre-crisis, acute crisis, and post-crisis. The document defines different types of crises including physical damage from natural disasters or non-physical issues like economic or human resources crises. It also outlines the objectives, elements, and strategies for effective crisis management and communication.
2. Meaning of crisis:
Crisis refers to sudden unplanned events which
causes major disturbances in the organization.
According to BARTON : “A crisis is any event that can
seriously harm the people, reputation or financial
condition of an organization”.
3. Sudden event
Short notice
Triggers fear
Serious consequences
Lack of information
Quick response needed
Unpredictable
Nature of Crisis
4. TYPES OF CRISIS
Physical Damage Crisis :- A crisis which is characterized by the
physical damage of the individual, organization or the society.
Causes of Physical damage:-
Natural crisis :- Every business is vulnerable to natural disasters.
These includes things such as, floods & earthquakes. Although
disasters are mostly unpredictable, beyond our responsibility
and control.
5. Earthquake :- Earthquake is a sudden release of energy in the
earth crust, that creates a waves. Such as, volcanic
activity, landslides, mining, nuclear test.
Drought :- Drought is a period were abnormal low rainfall,
leading to a shortage of water supply.
Floods :- An overflow of a large amount of water beyond its
normal limits.
6. Non Physical Damage :- Non physical damage crisis means
crisis reflected by no physical damage of the individual,
organisation or society.
Product Issues Crisis :- This type of crisis is a potential crisis
for the company, because the product may fail in-spite of
appropriate research and development techniques are
followed.
Economic Crisis :- This type of crisis occurs when an
organisation experiences a cash problem.
7. Human Resources Crisis :- It usually involves lower-level
workers. It take a variety of form. Such as, strikes, sexual
harassment, discrimination and workplace violence.
Crisis of Organisational Miss-deeds:-
Crisis of Deception :- Organization face crisis of deception,
because management make fake promises and wrong
commitment to the customer.
Crisis of Management Misconduct :- Organization face
crisis of miss-conduct, when management indulges in
illegal activity.
8. Pre – crisis stage
The Acute - crisis stage
The Post crisis stage
Stages of Crisis :
9. PRE-CRISIS STAGE
It is stage which has a opportunity to turn
negative situation into a positive one.
Here someone are discovers a critical situation
and bring it to the attention of their superior
officer.
Solutions:
When superior officers known that condition
they don’t want to show outside of organization.
10. THE ACUTE – CRISIS STAGE
A crisis becomes visible out sides of the organization.
Solution:
Take charge of the situation quickly.
Take necessary action to fix the problem.
11. THE POST - CRISIS STAGE
This is the stage which is process about the recoup their
losses or evaluating the organization changes made in
organization.
Solution: Recoup any losses evaluate the organization
performance during the crisis.
12. CONSEQUENCES OF CRISIS
• Poor capital
• Loss of assets
• Infrastructure destruction
• Threatened stakeholders
• Damaged reputation
• Lack of cash flow
• others
13. FINANCIAL CRISIS
Meaning
The term financial crisis is applied broadly to a
variety of situation in which some financial assets suddenly
lose a large part o their nominal value.
14. CONSEQUENCES OF FINANCIAL CRISIS
Complementarities in financial markets
Leverage
Asset-liability mismatch
Uncertainty and herd behavior
Regulatory failures
Contagion
Recessionary effects
15. WHAT IS CRISIS MANAGEMENT??
Meaning – It is a process by which an organisation deals with a
major event that threatens to harm the organisation, its stakeholders, or
the general public.
The study of crisis management originated with the large scale
industrial and environmental disasters in the 1980s
Purpose crisis management
• Prevention
• Survival
• Successful outcome
16. OBJECTIVE OF CRISIS MANAGEMENT
To identify the potential crisis
To be well prepared for crisis
To determine the risk
To understand the consequences of crisis
To minimize the potential impact of crisis
To analyse the probability of crisis
17. ELEMENTS OF CRISIS MANAGEMENT
Understanding
Crisis Management Planning
Contingency Planning
Business Continuity Planning
19. CRISIS COMMUNICATION
The effort taken by a company to communicate with the
public and stockholders when an unexpected event occurs
that could have a negative impact on the company's
reputation.
Crisis communication team involves,
CEO
Head public relations
Vice presidents, Managers of key departments
Safety or Security officer
Company lawyers
20. STEPS IN CRISIS COMMUNICATION
Anticipate crisis
Identify crisis communications team
Identify and train spokesperson
Spokesperson training
Establish systems
21. Identify stakeholders
Develop holding statement
Assess the crisis situation
Finalize and adapt key messages
Post crisis analysis
22. STRATEGIES FOR MANAGING CRISIS
Determine the crisis
See the big picture
Gather relevant team
Set timeline
23. Develop procedural manual
Seek external experts
Speak to media
Fine tune of communication
Protect reputation