crisis management

1. Crisis Management

2. Crisis
 Crisis is any event that is expected
to lead to, an unstable and
dangerous situation affecting an
individual, group, community or
whole society.
 It is a situation that is
unpredictable, but it is not
unexpected.

3. Common features of Crisis
 The situation materialises unexpectedly.
 Decisions are required urgently.
 Time is short.
 Urgent demands for information are received.
 There is sense of loss of control.
 Pressures build over time.
 Routine business become increasingly difficult.
 Reputation suffers.

4. Types of Crisis
 Financial Crisis
 Technological Crisis
 Crisis of Malevolence
 Natural Crisis
 Crisis of Deception
 Workplace Violence

5. Financial Crisis
 These are the crisis that occur in an organization due to its
prevailing financial conditions.
 Losses, increase in costs, non-availability of funds,
bankruptcy, unable to pay back loans, etc.

6. Examples of Financial Crisis
 Kingfisher Airlines,
recently faced a financial
crisis.
 Deutsche Bank faced a
financial crisis in USA, in
2009.

7. Technological Crisis
 Technological crisis are caused by human application of
science and technology. This occurs when technology
becomes complex and the system breaks down.
 Software failures, Industrial accidents etc.

8. Examples of Technological Crisis
 Exxon Valdez, oil spill in
Alaska, on March 24,1989.
 Union Carbide India Ltd,
gas leak in Bhopal, on
December 2, 1984.

9. Crisis of Malevolence
 When opponents or miscreant individuals use extreme
tactics for the purpose of expressing anger or seeking gain
from, a company or economic system, perhaps with the
aim of destroying it.
 Product tampering, kidnapping, malicious rumors,
terrorism etc.

10. Example of Malevolence Crisis
 The Tylenol (Extra-Strength capsules) murder case in
Chicago, on 29 September, 1982.

11. Natural Crisis
 Natural crisis, are natural disasters considered as 'acts of
God,' are such environmental phenomena.
 Earthquakes, volcanic eruptions, tornadoes and hurricanes,
floods, landslides, tsunamis, storms, and droughts etc.

12. Examples of Natural Crisis
 The Power Project of
Jaiprakash Associates, at
Nathpa, in Himachal Pradesh
was devastated by floods.
 The Indian Ocean
earthquake (Tsunami) , in
2004.

13. Crisis of Deception
 Crisis of deception occur when management conceals or
misrepresents information about itself and its products
in its dealing with consumers and others.

14. Example of Crisis of Deception
 Dow Corning’s silicone-
gel controversy in
Michigan, USA.
 The Satyam scam,
which came into
light, in 2009

15. Workplace Violence and Rumors
 Crisis occur when an employee(s) or former employee(s)
commits an act of violence against other employees on
organizational grounds.
 Rumors are, when false information about an organization
or its products creates crises hurting it’s reputation.

16. Example of Workplace Violence and Rumors
 A workplace violence had
occurred between the
laborers and higher
authority, in Vardhman
Group of Companies.
 Procter & Gamble’s
Logo controversy in 1985.

17. 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 the general
public.

18. Crisis Management Plan
 Gather facts.
 Be prepared.
 Communicate quickly and accurately
conduct brainstorming.
 Develop policies to minimize crisis.
 Assemble and organize resources.
 Create a Crisis Management Team.
 Execute actions

19. Example of Unsuccessful Crisis Management
 Union Carbide India Ltd, gas leak tragedy in
Bhopal, on December 2, 1984.

20.  It occurred on the night of December 2–3, 1984 at the
Union Carbide India Ltd, pesticide plant in Bhopal,
Madhya Pradesh.
 A leak of methyl isocyanate gas and other chemicals from
the plant resulted in the exposure of hundreds of
thousands of people.
 Estimates vary on the death toll. The official immediate
death toll was 2,259 and the government of Madhya
Pradesh.

21. Example of Successful Crisis Management
 The Pepsi Corporation faced a crisis in 1993,
which was successfully managed by the company.
 Cadbury’s chocolates – worms in packing.

22.  In 1993, claims of syringes being found in cans of diet
Pepsi were made.
 Company urged stores not to remove the product from
shelves while it had the cans and the situation
investigated.
 Pepsi released videos and made public, showing the
production process to demonstrate that such tampering
was impossible within their factories.
 Crisis was managed through effective communication.

23. Thanks….