2. THE SOURCE OF CRISIS
Crises are triggered in a variety of ways such as
by natural forces and by the deliberate acts
people inside or outside that society (Boin et al.
2008).
Crises can be made by a single person or a
group of people; natural disaster and
infrastructure disruption (Lewis, 2006).
Crises can be differentiated between intentional
and unintentional (Ulmer et al. 2007)
3. Intentional purposely to harm an organization
including sabotage, workplace violence, poor
employee relationships, poor risk management
and unethical leadership. Unintentional can be
defined like natural disaster, disease outbreaks,
product failures and economy breakdown.
4. TYPES OF CRISES
Coombs
(2006)
points out
three types
of crises.
1. Attack and harming organizations
crisis including product tampering,
workplace violence, terrorism,
computer hacking and rumors.
2. Accidental crisis consists of product
damage, industrial accident,
transportation mishap, challenges
and sudden loss of key personal.
3. Management crisis (misconduct)
consists improper job performance,
performance appraisal and
regulatory violation.
5. TYPES OF CRISES
Lerbinger
(1997)
points out
seven types
of crises
1. Natural Crises- ‘acts of God’ include earthquakes,
volcanic eruptions, tornadoes and hurricanes, flood
, landslide, droughts etc.
2. Technological Crises – by human application of
science and technology. Soft failures, industrial
accidents and oil spills. Human error and
manipulation causes disruptions.
3. Confrontation Crises – occur when discontented
individuals or group fight business, government and
various interest groups to win acceptance of their
demands and expectations like boycotts, picketing,
unrest, strike etc.
4. Crisis of Organizational Misleads- Organization
takes action without impartial manner.
5. Crisis of Skewed Management Value – lopsided
value practice by managers between investors and
internal stakeholders.
6. Crises of Deception – wrong and misrepresents
information given to the customers.
7. Crises of Management Misconduct- deliberate
immorality and illegality.
6. TYPES OF CRISES
• Mitroff (2005)
describes there
are seven types
of crises in
Chinese
Organization.
• Based on
study found that
more than half
crises were
economic and
followed by
reputational
and human
resources crisis
for second and
third
respectively.
1. Economic – labor strike, unrest, market crash, stock
fluctuation, hostile takeovers.
2. Informational- loss of proprietary and confidential
information, false information, tampering with
computer records etc.
3. Physical – breakdown of key equipment, loss of
material suppliers, explosion, poor product design
etc.
4. Human Resources – loss of key executives and
personnel; rise in absenteeism, vandalism and
accidents, lack of succession plan, corruption, work
violence etc.
5. Reputational – slander, gossip, false rumors etc.
6. Psychopathic – product tampering, kidnapping,
hostage taking, terrorism, criminal etc.
7. Natural Disasters – earthquake, storm, landslide,
mudslides, flood, fire etc.
7. SCOPE OF CRISIS IMPACT
Boin et al (2008) depends on the amount of
affect- some affect the whole organization but
others just a few departments or people.
Curtin et al (2005) argue that can produce serious
impact on reputation and brand.
The impact of crisis would be positive or negative
depends on how people accept and manage it.
Other than reputation and brand, crisis enable to
give an impact to other aspect like financial,
property, human resource etc.
8. Crisis Management Model by
Gonzalez-Herrero
1. Diagnosing the 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.
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.
9. 2. Planning
Once a crisis is being detected, crisis
management team must immediately jump into
action. Ask the employees not to panic. 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.
10. 3. Adjusting to Change
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.
