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Transcript of CRISIS MANAGEMENT
Types of Crisis
Primary Types of Organizational Crises
Crisis Management Cycle
Case Analysis of Organizational Crisis
Crisis Management Plan
Model and Theories Associated with Crisis Management
Case Study QUESTIONS GROUP MEMBERS
ASIM INAYAT CRISIS MANAGEMENT WHAT IS CRISIS? Actual or potential harm to individuals
Actual or potential harm to property
An imminent threat to the ability of the organization to operate
An imminent threat to the reputation of the organization
An imminent threat to any brand which is owned or utilized by the organization
Actual media attention
The potential for media attention CRISIS MANAGEMENT CYCLE TYPES OF CRISIS CRISIS MANAGEMENT Crisis management is the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders or general public. PRIMARY TYPE OF ORGANIZATIONAL CRISES Sudden Crisis : a disruption in the company’s business that occurs:
Is likely to generate news coverage.
May adversely impact employees, investors, customers, suppliers and other stakeholders. Smoldering Crisis: any serious business problem not generally known within or without the company, which generates negative news coverage if or when it goes public. Example:
Investigation by government agency.
Internal problems within organization that were not previously discovered. CASE ANALYSIS OF ORGANIZATIONAL CRISIS The likelihood of a crisis occurring and the severity of the crisis varies by industry by company, and by function.
The solution to crisis have both short-term and long-term ramifications.
Crisis may produce gains as well as losses.
There is no systematic or widely accepted strategy for managing crisis.
Organizations are not yet able to calculate the utility functions associated with crisis.
There are common difficulties associated with the management of crisis. CRISIS PLANNING There are two elements of planning that are unique to managing a crisis:
Creating escalation rules for employees
Creating a crisis team
In short, the goal is to have employees who know when to report problems and a team of senior employees who are ready to react to them. CRISIS MANAGEMENT PLAN Any plan prepared by superiors, members of crisis management team and related employees to help organization overcome crisis in the best possible way is called crisis management plan. CHARACTERISTICS OF CMP Presence of all Executives Plans are realistic CRISIS COMMUNICATION It is the communication between the organization and public prior to, during and after the negative consequences.
Crisis communication is an initiative which aims at protecting the reputation of the organization and maintaining its public image. IDENTIFY CRISIS COMMUNICATION TEAM Establish communications protocols Assess the crisis situation 1 4 5 2 IDENTIFY KEY SPOKESPERSONS 3 Train your spokespersons Identify and know the audience 6 Anticipate crises 7 8 9 10 Identify key messages to communicate Decide on communication methods Be prepared to ride out the storm CRISIS MANAGEMENT TEAM A Crisis Management Team is formed to protect an organization against the adverse effects of crisis. Crisis Management team prepares an organization for inevitable threats.
Crisis Management Team is formed to respond immediately to warning signals of crisis and execute relevant plans to overcome emergency situations. CRISIS MANAGEMENT TEAM INCLUDES CEO
HEAD OF DEPARTMENT
BOARD OF DIRECTORS
PEOPLE ASSOCIATED WITH CEO
HUMAN RESOURCE REPRESENTATIVES ROLE OF LEADERS IN CRISIS MANAGEMENT Leads from the front.
Build an environment of trust.
Leaders must try their level best to prevent crisis.
Identify the important processes and systems which should keep functioning.
Leaders should strive hard to come out of tough times as soon as possible.
Making wise and rapid decisions as well as taking courageous action.
Never waste a good crisis. Suggest a possible solutions for all identified problems MODEL AND THEORIES ASSOCIATED WITH CRISIS MANAGEMENT CASE STUDY: JOHNSONS & JOHNSONS HISTORY OF JOHNSONS & JOHNSONS Johnson & Johnsons is an American multinational medical devices, pharmaceutical and consumer packaged goods manufacturer founded in 1886. The Company is listed among Fortune 500.
Three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, found Johnson & Johnson in New Brunswick, New Jersey, U.S.
The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries.
Johnson & Johnson's brands include numerous household names of medications and first aid supplies. JOHNSONS & JOHNSONS TYLENOL CRISIS Before the crisis, Tylenol was the most successful over-the-counter product in the United States with over one hundred million users.
Tylenol was responsible for 19 percent of Johnson & Johnson's corporate profits during the first 3 quarters of 1982. Tylenol accounted for 13 percent of Johnson & Johnson's year-to-year sales growth and 33 percent of the company's year-to-year profit growth.
Tylenol was the absolute leader in the painkiller field accounting for a 37 percent market share. WHAT HAPPENED? During the fall of 1982, for reasons not known, a malevolent person or persons, presumably unknown, replaced Tylenol Extra-Strength capsules with cyanide-laced capsules, resealed the packages, and deposited them on the shelves of at least a half-dozen or so pharmacies, and food stores in the Chicago area.
The poison capsules were purchased, and seven unsuspecting people died a horrible death. HOW DID THEY HANDLE? Alert the Consumers.
Stop the production of Tylenol.
Ordered the national withdraw of every capsule.
Give first priority to consumers.
Used Media for communicating their strategy.
Established hotline for consumers to call.
Established a toll free-line.
Arrange Press Conferences.
Triple Safety seal