Crisis Management - Meaning, Need and its Features

What is Crisis ?

A sudden and unexpected event leading to major unrest amongst the individuals at the workplace is called as organization crisis. In other words, crisis is defined as any emergency situation which disturbs the employees as well as leads to instability in the organization. Crisis affects an individual, group, organization or society on the whole.

Characteristics of Crisis

• Crisis is a sequence of sudden disturbing events harming the organization.
• Crisis generally arises on a short notice.
• Crisis triggers a feeling of fear and threat amongst the individuals.

Why Crisis ?

Crisis can arise in an organization due to any of the following reasons:

• Technological failure and Breakdown of machines lead to crisis. Problems in internet, corruption in the software, errors in passwords all result in crisis.
• Crisis arises when employees do not agree to each other and fight amongst themselves. Crisis arises as a result of boycott, strikes for indefinite periods, disputes and so on.
• Violence, thefts and terrorism at the workplace result in organization crisis.
• Neglecting minor issues in the beginning can lead to major crisis and a situation of uncertainty at the work place. The management must have complete control on its employees and should not adopt a casual attitude at work.
• Illegal behaviors such as accepting bribes, frauds, data or information tampering all lead to organization crisis.
• Crisis arises when organization fails to pay its creditors and declares itself a bankrupt organization.

Crisis Management

The art of dealing with sudden and unexpected events which disturbs the employees, organization as well as external clients refers to Crisis Management.

The process of handling unexpected and sudden changes in organization culture is called as crisis management.

Essential Features of Crisis Management

• Crisis Management includes activities and processes which help the managers as well as employees to analyze and understand events which might lead to crisis and uncertainty in the organization.
• Crisis Management enables the managers and employees to respond effectively to changes in the organization culture.
• It consists of effective coordination amongst the departments to overcome emergency situations.
• Employees at the time of crisis must communicate effectively with each other and try their level best to overcome tough times. Points to keep in mind during crisis
• Don’t panic or spread rumours around. Be patient.
• At the time of crisis the management should be in regular touch with the employees, external clients, stake holders as well as media.

Types of Crisis

Crisis refers to sudden unplanned events which cause major disturbances in the organization and trigger a feeling of fear and threat amongst the employees.

Following are the types of crisis:

Natural Crisis

• Disturbances in the environment and nature lead to natural crisis.
• Such events are generally beyond the control of human beings.
• Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.

Technological Crisis

• Technological crisis arises as a result of failure in technology. Problems in the overall systems lead to technological crisis.
• Breakdown of machine, corrupted software and so on give rise to technological crisis.

Crisis of Malevolence

• Organizations face crisis of malevolence when some notorious employees take the help of criminal activities and extreme steps to fulfill their demands.
• Acts like kidnapping company’s officials, false rumours all lead to crisis of malevolence.

Crisis of Organizational Misdeeds

• Crises of organizational misdeeds arise when management takes certain decisions knowing the harmful consequences of the same towards the stakeholders and external parties.

In such cases, superiors ignore the after effects of strategies and implement the same for quick results.

1. Crisis of Deception

• Organizations face crisis of deception when management purposely tampers data and information.

Management makes fake promises and wrong commitments to the customers. Communicating wrong information about the organization and products lead to crisis of deception

1. Crisis of Management Misconduct

• Organizations face crisis of management misconduct when management indulges in deliberate acts of illegality like accepting bribes, passing on confidential information and so on.
• Crisis due to Workplace Violence
• Such a type of crisis arises when employees are indulged in violent acts such as beating employees, superiors in the office premises itself.

Crisis Due to Rumours

• Spreading false rumours about the organization and brand lead to crisis. Employees must not spread anything which would tarnish the image of their organization.
• Bankruptcy
• A crisis also arises when organizations fail to pay its creditors and other parties.
• Lack of fund leads to crisis.

Crisis Due to Natural Factors

• Disturbances in environment and nature such as hurricanes, volcanoes, storms, flood; droughts, earthquakes etc result in crisis.
• Sudden Crisis
• As the name suggests, such situations arise all of a sudden and on an extremely short notice.
• Managers do not get warning signals and such a situation is in most cases beyond any one’s control. 

Crisis Management Model

Gonzalez-Herrero and Pratt proposed a Crisis Management Model which identified three different stages of crisis management.

According to Gonzalez-Herrero and Pratt, crisis management includes following three stages:

1. Diagnosis of Crisis

   The first stage involves detecting the early indicators of crisis. It is for the leaders and managers to sense the warning signals of a crisis and prepare the employees to face the same with courage and determination. Superiors must review the performance of their subordinates from time to time to know what they are up to.
   The role of a manager is not just to sit in closed cabins and shout on his subordinates. He must know what is happening around him. Monitoring the performance of the employee regularly helps the managers to foresee crisis and warn the employees against the negative consequences of the same. One should not ignore the alarming signals of crisis but take necessary actions to prevent it. Take initiative on your own. Don’t wait for others.

   2. Planning

      Once a crisis is being detected, crisis management team must immediately jump into action. Ask the employees not to panic. Devise relevant strategies to avoid an emergency situation. Sit and discuss with the related members to come out with a solution which would work best at the times of crisis. It is essential to take quick decisions. One needs to be alert and most importantly patient. Make sure your facts and figures are correct. Don’t rely on mere guess works and assumptions. It will cost you later.

   3. Adjusting to Changes

      Employees must adjust well to new situations and changes for effective functioning of organization in near future. It is important to analyze the causes which led to a crisis at the workplace. Mistakes should not be repeated and new plans and processes must be incorporated in the system.

   Structural Functions Systems Theory

   According to structural functions systems theory, communication plays a pivotal role in crisis management. Correct flow of information across all hierarchies is essential. Transparency must be maintained at all levels. Management must effectively communicate with employees and provide them the necessary information at the times of crisis. Ignoring people does not help, instead makes situations worse. Superiors must be in regular touch with subordinates. Leaders must take charge and ask the employees to give their best.

   Diffusion of innovation Theory

   Diffusion of innovation theory proposed by Everett Rogers, supports the sharing of information during emergency situations. As the name suggests during crisis each employee should think out of the box and come out with something innovative to overcome tough times. One should be ready with an alternate plan. Once an employee comes up with an innovative idea, he must not keep things to himself. Spread the idea amongst all employees and departments. Effective communication is essential to pass on ideas and information in its desired form.

   Unequal Human Capital Theory

   Unequal human capital theory was proposed by James. According to unequal human capital theory, inequality amongst employees leads to crisis at the workplace. Discrimation on the grounds of caste, job profile as well as salary lead to frustrated employees who eventually play with the brand name, spread baseless rumors and earn a bad name for the organization.

   Crisis Communication - Meaning, Need and its Process

   
   
   
   

   Crisis refers to sequence of unwanted events at the workplace which lead to disturbances and major unrest amongst the individuals. Crisis generally arises on a short notice and triggers a feeling of threat and fear in the employees. In simpler words crisis leads to uncertainty and causes major harm to the organization and its employees.

   It is essential for the employees to sense the early signs of crisis and warn the employees against the negative consequences of the same. Crisis not only affects the smooth functioning of the organization but also pose a threat to its brand name.

   What is Crisis Communication ?

   Crisis Communication refers to a special wing which deals with the reputation of the individuals as well as the organization. Crisis communication is an initiative which aims at protecting the reputation of the organization and maintaining its public image. Various factors such as criminal attacks, government investigations, media enquiry can tarnish the image of an organization.

   Crisis Communication specialists fight against several challenges which tend to harm the reputation and image of the organization.

   Need for Crisis Communication

   Crisis can have a negative effect on brand image. Crisis Communication experts are employed to save an organization’s reputation against various threats and unwanted challenges.

   Brand identity is one of the most valuable assets of an organization. The main purpose of Crisis Communication team is to protect the brand identity and maintain the organization’s firm standing within the industry.

   Crisis Communication specialists strive hard to overcome tough situations and help the organization come out of difficult situations in the best possible and quickest way.

   Crisis Communication Process

   • Employees should not ignore any of the external parties and important clients Come out, meet them and discuss the problem with them. There is nothing to be ashamed of. If needed, seek their help. Media must not be ignored. Answer their questions. Avoiding media makes situation all the more worse.
   • Don’t criticize individuals. Show a feeling of care and concern for them. Share their feelings and encourage them not to lose hope. Encourage them to deliver their level best. Put yourself in their place. Respect them and avoid playing blame games.
   • Effective communication must be encouraged at the workplace during emergency situations. Employees should have an easy access to superior’s cabins to discuss critical issues with them and reach to a mutually acceptable solution.
   • Information must flow across all departments in its desired form. One should not rely on mere guess works or assumptions during crisis. Make sure the information you have is accurate.
   • Crisis communication specialists must learn to take quick decisions. Remember one needs to respond quickly and effectively during unstable situations. Think out of the box and devise alternate plans for the smooth functioning of organization.
   • Make sure information is kept confidential. Serious action must be taken against employees sharing information and data with external parties. Such things are considered highly unprofessional and unethical and spoil the reputation of the organization.
   • The superiors must evaluate performance of employees on a regular basis. Ask for feedbacks and reports to know what they are up to. Conduct surprise audits to track performance of employees.

   Organizations hire crisis communication specialists to overcome tough times as well as to maintain their reputation and position in the market.