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. The study of crisis management originated with the
large-scale industrial and environmental disasters in the
1980s.[1][2] It is considered to be the most important process in public relations.[2]

Crisis-management methods of a business or an organization are called a crisis-management plan. A British Standard BS11200:2014 provides a useful foundation for understanding terminology and frameworks relating to crisis, in this document the focus is on the corporate exposure to risks in particular to the black swan events that result in signicant strategic threats to organisations. CurThree elements are common to a crisis: (a) a threat to the rently there is work on-going to develop an International
organization, (b) the element of surprise, and (c) a short standard.
decision time.[3] Venette[4] argues that crisis is a process Crisis management is occasionally referred to as incident
of transformation where the old system can no longer be management, although several industry specialists such as
maintained. Therefore, the fourth dening quality is the Peter Power argue that the term crisis management is
need for change. If change is not needed, the event could more accurate. [5]
more accurately be described as a failure or incident.
A crisis mindset requires the ability to think of the
worst-case scenario while simultaneously suggesting numerous solutions. Trial and error is an accepted discipline, as the rst line of defense might not work. It is
necessary to maintain a list of contingency plans and to be
always on alert. Organizations and individuals should always be prepared with a rapid response plan to emergencies which would require analysis, drills and exercises.[6]

In contrast to risk management, which involves assessing

potential threats and nding the best ways to avoid those
threats, crisis management involves dealing with threats
before, during, and after they have occurred. It is a discipline within the broader context of management consisting of skills and techniques required to identify, assess,
understand, and cope with a serious situation, especially
from the moment it rst occurs to the point that recovery
procedures start.

The credibility and reputation of organizations is heavily inuenced by the perception of their responses during crisis situations. The organization and communication involved in responding to a crisis in a timely fashion
makes for a challenge in businesses. There must be open
1 Introduction
and consistent communication throughout the hierarchy
to contribute to a successful crisis-communication proCrisis management is a situation-based management syscess.
tem that includes clear roles and responsibilities and process related organisational requirements company-wide. The related terms emergency management and business
The response shall include action in the following areas: continuity management focus respectively on the prompt
Crisis prevention, crisis assessment, crisis handling and but short lived rst aid type of response (e.g. putting
crisis termination. The aim of crisis management is to be the re out) and the longer-term recovery and restoration
well prepared for crisis, ensure a rapid and adequate re- phases (e.g. moving operations to another site). Crisis is
sponse to the crisis, maintaining clear lines of reporting also a facet of risk management, although it is probably
and communication in the event of crisis and agreeing untrue to say that crisis management represents a failure
of risk management, since it will never be possible to torules for crisis termination.
tally mitigate the chances of catastrophes occurring.
Crisis management consists of dierent aspects including;
Methods used to respond to both the reality and perception of crisis.

2 Types of crisis

Establishing metrics to dene what scenarios conDuring the crisis management process, it is important to
stitute a crisis and should consequently trigger the
identify types of crises in that dierent crises necessitate
necessary response mechanisms.
the use of dierent crisis management strategies.[7] Po[7]
Communication that occurs within the response tential crises are enormous, but crises can be clustered.
Lerbinger[8] categorized eight types of crises

phase of emergency-management scenarios.

1

2
1. Natural disaster
2. Technological crises
3. Confrontation
4. Malevolence
5. Organizational Misdeeds
6. Workplace Violence

TYPES OF CRISIS

2.4 Crisis of malevolence

An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or
other extreme tactics for the purpose of expressing hostility or anger toward, or seeking gain from, a company,
country, or economic system, perhaps with the aim of
destabilizing or destroying it. Sample crisis include product tampering, kidnapping, malicious rumors, terrorism,
and espionage.[7][8]

7. Rumours
8. Terrorist attacks/man-made disasters

2.1

Natural crisis

Natural crises, typically natural disasters, are such environmental phenomena as earthquakes, volcanic eruptions, tornadoes and hurricanes, oods, landslides,
tsunamis, storms, and droughts that threaten life, property, and the environment itself.[7][8]
Example: 2004 Indian Ocean earthquake
(Tsunami)

Example: 1982 Chicago Tylenol murders

2.5 Crisis of organizational misdeeds

Crisis occur when management takes actions it knows
will harm or place stakeholders at risk for harm without
adequate precautions.[7] Lerbinger[8] specied three different types of crises of organizational misdeeds: crises
of skewed management values, crises of deception, and
crises of management misconduct.

2.5.1 Crises of skewed management values

2.2

Technological crisis

Technological crises are caused by human application

of science and technology. Technological accidents inevitably occur when technology becomes complex and
coupled and something goes wrong in the system as a
whole (Technological breakdowns). Some technological
crises occur when human error causes disruptions (Human breakdowns[7] ). People tend to assign blame for a
technological disaster because technology is subject to
human manipulation whereas they do not hold anyone
responsible for natural disaster. When an accident creates signicant environmental damage, the crisis is categorized as megadamage.[7] Samples include software failures, industrial accidents, and oil spills.[7][8]
Examples: Chernobyl disaster, Exxon Valdez
oil spill, Heartbleed security bug

2.3

Confrontation crisis

Crises of skewed management values are caused when

managers favor short-term economic gain and neglect
broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business creed that focuses on the interests of stockholders and tends to disregard the interests of its other
stakeholders such as customers, employees, and the community
Example: Sears sacrices customer trust
It has 3 stages -precrisis -acute -chronic and -conict
resolution

2.5.2 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.

Confrontation crisis occur when discontented individuals

and/or groups ght businesses, government, and various
Example: Dow Cornings silicone-gel breast
interest groups to win acceptance of their demands and
implant
expectations. The common type of confrontation crisis
is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of
buildings, and resisting or disobeying police.
2.5.3 Crisis of management misconduct
Example: Rainbow/PUSHs (People United to
Serve Humanity) boycott of Nike

Some crises are caused not only by skewed values and

deception but deliberate amorality and illegality.

3.3

Signal detection

2.6

Workplace violence

2.7

Rumors

case study on crisis in the nancial services sector, for

example, explores why crisis events erode public trust in
Crises occur when an employee or former employee com- leadership. Jamess research demonstrates how leadermits violence against other employees on organizational ship competencies of integrity, positive intent, capabilgrounds.
ity, mutual respect, and transparency impact the trustbuilding process. [11]
Example: DuPonts Lycra
1. Signal detection

False information about an organization or its products

creates crises hurting the organizations reputation. Sample is linking the organization to radical groups or stories
that their products are contaminated.[7]

3. Containment and damage control

4. Business recovery
5. Learning

Example: Procter & Gambles Logo controversy

3.3 Signal detection

Crisis leadership

Si Sense-making: represents an attempt to create order and make sense, retrospectively, of what occurs.
Perspective-taking: the ability to consider another persons or groups point of view.

Alan Hilburg, a pioneer in crisis management, denes organizational crises as categorized as either acute crises or
chronic crises. Erika Hayes James, an organizational psychologist at the University of Virginias Darden Graduate
School of Business, identies two primary types of organizational crisis.[9] James denes organizational crisis as
any emotionally charged situation that, once it becomes
public, invites negative stakeholder reaction and thereby
has the potential to threaten the nancial well-being, reputation, or survival of the rm or some portion thereof.
[10]

1. Sudden crisis
2. Smoldering crises

3.1

2. Preparation and prevention

Sudden crisis

3.4 Preparation and prevention

It is during this stage that crisis handlers begin preparing
for or averting the crisis that had been foreshadowed in
the signal detection stage. Hilburg has demonstrated that
using an impact/probability model allows organizations to
fairly accurately predict crisis scenarios. Hes recognized
the greatest organizational challenge is 'speaking truth to
power' to predict truly worst-case scenarios. Organizations such as the Red Cross's primary mission is to prepare for and prevent the escalation of crisis events. Walmart has been described as an emergency-relief standard
bearer after having witnessed the incredibly speedy and
well-coordinated eort to get supplies to the Gulf Coast
of the United States in anticipation of Hurricane Katrina.

Sudden crises are circumstances that occur without warn- 3.5 Containment and damage control
ing and beyond an institutions control. Consequently,
sudden crises are most often situations for which the in- Usually the most vivid stage, the goal of crisis containstitution and its leadership are not blamed.
ment and damage control is to limit the reputational, nancial, safety, and other threats to rm survival. Crisis
handlers work diligently during this stage to bring the cri3.2 Smoldering crisis
sis to an end as quickly as possible to limit the negative
publicity to the organization, and move into the business
Smoldering crises dier from sudden crises in that they
recovery phase.
begin as minor internal issues that, due to managers negligence, develop to crisis status. These are situations
when leaders are blamed for the crisis and its subsequent
3.6 Business recovery
eect on the institution in question. [10]
James categorises ve phases of crisis that require specic crisis leadership competencies.[10] Each phase contains an obstacle that a leader must overcome to improve
the structure and operations of an organization. Jamess

When crisis hits, organizations must be able to carry on

with their business in the midst of the crisis while simultaneously planning for how they will recover from the
damage the crisis caused. Crisis handlers not only engage

MODELS AND THEORIES ASSOCIATED WITH CRISIS MANAGEMENT

in continuity planning (determining the people, nancial,

and technology resources needed to keep the organization running), but will also actively pursue organizational
resilience.

cially one that stimulates extensive media coverage. Public scrutiny can result in a negative nancial, political, legal and government impact. Crisis management planning
deals with providing the best response to a crisis.[12]

3.7

4.3 Contingency planning

Learning

In the wake of a crisis, organizational decision makers

adopt a learning orientation and use prior experience
to develop new routines and behaviors that ultimately
change the way the organization operates. The best leaders recognize this and are purposeful and skillful in nding the learning opportunities inherent in every crisis situation.

3.8

Crisis communication

The eort taken by an organization to communicate with

the public and stakeholders when an unexpected event
occurs that could have a negative impact on the organizations reputation. This can also refer to the eorts
to inform employees or the public of a potential hazard
which could have a catastrophic impact. There are 3 essential steps that an organization can take to prepare for
and withstand a communications crisis: 1) Dene your
philosophy; 2) Assess your vulnerabilities; 3) Develop a
protocol.

4
4.1

Models and theories associated

with crisis management
Crisis Management Model

Preparing contingency plans in advance, as part of a

crisis-management plan, is the rst step to ensuring an
organization is appropriately prepared for a crisis. Crisismanagement teams can rehearse a crisis plan by developing a simulated scenario to use as a drill. The plan should
clearly stipulate that the only people to speak to publicly
about the crisis are the designated persons, such as the
company spokesperson or crisis team members. Ideally
it should be one spokesperson who can be available on call
at any time. Cooperation with media is crucial in crisis
situation, assure that all questions are answered on time
and information on what was done to resolve the situation is provided. The rst hours after a crisis breaks are
the most crucial, so working with speed and eciency
is important, and the plan should indicate how quickly
each function should be performed. When preparing to
oer a statement externally as well as internally, information should be accurate and transparent. Providing
incorrect or manipulated information has a tendency to
backre and will greatly exacerbate the situation. The
contingency plan should contain information and guidance that will help decision makers to consider not only
the short-term consequences, but the long-term eects of
every decision.[12]

4.4 Business continuity planning

When a crisis will undoubtedly cause a signicant disruption to an organization, a business continuity plan can
help minimize the disruption. First, one must identify
the critical functions and processes that are necessary to
keep the organization running. This part of the planning
should be conducted in the earliest stages, and is part of a
business impact analysis phase that will signpost How
There are 3 phases in any Crisis Management as shown much does the organization stand to lose? (Osborne,
A. (2007). Practical Business Continuity Management.
below
Business Management: Top tips for eective, real-world
1. The diagnosis of the impending trouble or the dan- Business Continuity Management).
ger signals.
Each critical function and or/process must have its
own contingency plan in the event that one of the
2. Choosing appropriate Turnaround Strategy.
functions/processes ceases or fails, then the busi3. Implementation of the change process and its mon- ness/organization is more resilient, which in itself provides a mechanism to lessen the possibility of having to
itoring
invoke recovery plans (Osborne, 2007). Testing these
contingency plans by rehearsing the required actions in
a simulation will allow those involved to become more
4.2 Crisis Management Planning
acutely aware of the possibility of a crisis. As a result,
No corporation looks forward to facing a situation that and in the event of an actual crisis, the team members
causes a signicant disruption to their business, espe- will act more quickly and eectively.[12]
Successfully managing a crisis requires an understanding
of how to handle a crisis beginning with before they
occur. Alan Hilburg speaks about a crisis arc. The arc
consists of crisis avoidance, crisis mitigation and crisis
recovery. Gonzalez-Herrero and Pratt found the dierent phases of Crisis Management.

4.8

Crisis leadership

A note of caution when planning training scenarios, all

too often simulations can lack ingenuity, an appropriate
level of realism and as a consequence potentially lose their
training value. This part can be improved by employing
external exercise designers who are not part of the organisational culture and are able to test an organizations
response to crisis, in order to bring about a crisis of condence for those who manage vital systems (Borodzicz,
Edward P. (2005). Risk, Crisis & Security Management).

5
pathy, two less expensive strategies, are as eective as
an apology in shaping peoples perceptions of the organization taking responsibility for the crisis because these
strategies focus on the victims needs. The sympathy response expresses concern for victims while compensation
oers victims something to oset the suering.[14]

4.8 Crisis leadership

Following a simulation exercise, a thorough and system- James identies ve leadership competencies which facilatic debrieng must be conducted as a key component of itate organizational restructuring during and after a crisis.
any crisis simulation. The purpose of this is to create a
link and draw lessons from the reality of the simulated
1. Building an environment of trust
representation and the reality of the real world. (Borodzicz, 2005).
2. Reforming the organizations mindset
The whole process relating to business continuity plan3. Identifying obvious and obscure vulnerabilities of
ning should be periodically reviewed to identify any numthe organization
ber of changes that may invalidate the current plan. (Osborne, 2007).
4. Making wise and rapid decisions as well as taking
courageous action

4.5

Structural-functional systems theory

5. Learning from crisis to eect change.

Providing information to an organization in a time of crisis is critical to eective crisis management. Structuralfunctional systems theory addresses the intricacies of information networks and levels of command making up
organizational communication. The structural-functional
theory identies information ow in organizations as
networks made up of members ". Information in organizations ow in patterns called networks.[13]

Crisis leadership research concludes that leadership action in crisis reects the competency of an organization, because the test of crisis demonstrates how well
the institutions leadership structure serves the organizations goals and withstands crisis. [10] Developing effective human resources is vital when building organizational capabilities through crisis management executive
leadership.[15]

4.6

4.9 Unequal human capital theory

Diusion of innovation theory

Another theory that can be applied to the sharing of information is Diusion of Innovation Theory. Developed
by Everett Rogers, the theory describes how innovation
is disseminated and communicated through certain channels over a period of time. Diusion of innovation in
communication occurs when an individual communicates
a new idea to one or several others. At its most elementary form, the process involves: (1) an innovation, (2) an
individual or other unit of adoption that has knowledge
of or experience with using the innovation, (3) another
individual or other unit that does not yet have knowledge
of the innovation, and (4) a communication channel connecting the two units. A communication channel is the
means by which messages get from one individual to another.

4.7

Role of apologies in crisis management

There has been debate about the role of apologies in crisis management, and some argue that apology opens an
organization up for possible legal consequences. However some evidence indicates that compensation and sym-

James postulates that organizational crisis can result from

discrimination lawsuits. [16] Jamess theory of unequal
human capital and social position derives from economic
theories of human and social capital concluding that minority employees receive fewer organizational rewards
than those with access to executive management. In a
recent study of managers in a Fortune 500 company, race
was found to be a predictor of promotion opportunity or
lack thereof.[17] Thus, discrimination lawsuits can invite
negative stakeholder reaction, damage the companys reputation, and threaten corporate survival.

4.10 Social media and crisis management

Social media has accelerated the speed that information
about a crisis can spread. The viral eect of social networks such as Twitter means that stakeholders can break
news faster than traditional media - making managing
a crisis harder.[18] This can be mitigated by having the
right training and policy in place as well as the right social media monitoring tools to detect signs of a crisis
breaking.[19] Social media also gives crisis management

EXAMPLES OF SUCCESSFUL CRISIS MANAGEMENT

teams access to real-time information about how a crisis of E. coli bacteria in Washington state, California, Colis impacting stakeholder sentiment and the issues that are orado and British Columbia was traced to unpasteurized
of most concern to them.
apple juice manufactured by natural juice maker Odwalla
The crisis management mantra of Lanny Davis, former Inc. Forty-nine cases were reported, including the death
counsellor to Bill Clinton is to Tell it Early, Tell it All, of a small child. Within 24 hours, Odwalla conferred
Tell it Yourself. A strategy employed at the Clinton with the FDA and Washington state health ocials; established a schedule of daily press briengs; sent out
White House 1996 1998, to any breaking [20]
press releases which announced the recall; expressed reOrganisations should have a planned approach to releas- morse, concern and apology, and took responsibility for
ing information to the media in the event of a crisis. anyone harmed by their products; detailed symptoms of
A media reaction plan should include a company media E. coli poisoning; and explained what consumers should
representative as part of the Crisis Management Team do with any aected products. Odwalla then developed (CMT). Since there is always a degree of unpredictability through the help of consultants - eective thermal produring a crisis, it is best that all CMT members under- cesses that would not harm the products avors when
stand how to deal with the media and be prepared to do production resumed. All of these steps were communiso, should they be thrust into such a situation.[21]
cated through close relations with the media and through
In 2010 Procter & Gamble Co called reports that its new full-page newspaper ads.
Pampers with Dry Max caused rashes and other skin irritations completely false as it aimed to contain a pub5.3 Mattel
lic relations threat to its biggest diaper innovation in 25
years. A Facebook group called Pampers bring back
Mattel Inc., the toy maker, has been plagued with more
the OLD CRUISERS/SWADDLERS rose to over 4,500
than 28 product recalls and in Summer of 2007, among
members. Pampers denied the allegation and stated that
problems with exports from China, faced two product
only two complaints had been received for every one milrecalls in two weeks. The company did everything it
lion diapers sold.[22] Pampers quickly reached out to peocould to get its message out, earning high marks from conple expressing their concerns via social media, Pampers
sumers and retailers. Though upset by the situation, they
even held a summit with four inuential mommy blogwere appreciative of the companys response. At Mattel,
gers, to help dispel the rumour. Pampers acted quickly
just after the 7 a.m. recall announcement by federal oand decisively to an emerging crisis, before competitors
cials, a public relations sta of 16 was set to call reporters
and critics alike could fuel the re further.
at the 40 biggest media outlets. They told each to check
their e-mail for a news release outlining the recalls, invited them to a teleconference call with executives and
5 Examples of successful crisis scheduled TV appearances or phone conversations with
Mattels chief executive. The Mattel CEO Robert Eckmanagement
ert did 14 TV interviews on a Tuesday in August and
about 20 calls with individual reporters. By the weeks
5.1 Tylenol (Johnson and Johnson)
end, Mattel had responded to more than 300 media inquiries in the U.S. alone.[25]
In the fall of 1982, a murderer added 65 milligrams of
cyanide to some Tylenol capsules on store shelves, killing
seven people, including three in one family. Johnson & 5.4 Pepsi
Johnson recalled and destroyed 31 million capsules at a
cost of $100 million. The aable CEO, James Burke, The Pepsi Corporation faced a crisis in 1993 which
appeared in television ads and at news conferences in- started with claims of syringes being found in cans of diet
forming consumers of the companys actions. Tamper- Pepsi. Pepsi urged stores not to remove the product from
resistant packaging was rapidly introduced, and Tylenol shelves while it had the cans and the situation investigated.
sales swiftly bounced back to near pre-crisis levels.[23]
This led to an arrest, which Pepsi made public and then
When another bottle of tainted Tylenol was discovered in followed with their rst video news release, showing the
a store, it took only a matter of minutes for the manufac- production process to demonstrate that such tampering
turer to issue a nationwide warning that people should not was impossible within their factories. A second video
news release displayed the man arrested. A third video
use the medication in its capsule form.[24]
showed surveillance from a convenience store where a
woman was caught inserting a syringe into a can.[26] The
company simultaneously publicly worked with the FDA
5.2 Odwalla Foods
during the crisis. This made public communications efWhen Odwalla's apple juice was thought to be the cause fective throughout the crisis. After the crisis had been reof an outbreak of E. coli infection, the company lost a solved, the corporation ran a series of special campaigns
third of its market value. In October 1996, an outbreak designed to thank the public for standing by the corpora-

6.3

Exxon

tion, along with coupons for further compensation. This 6.3 Exxon
case served as a design for how to handle other crisis
situations.[27]
On March 24, 1989, a tanker belonging to the Exxon
Corporation ran aground in the Prince William Sound in
Alaska. The Exxon Valdez spilled millions of gallons of
crude oil into the waters o Valdez, killing thousands of
sh, fowl, and sea otters. Hundreds of miles of coastline
6 Examples of unsuccessful crisis were polluted and salmon spawning runs disrupted; numerous shermen, especially Native Americans, lost their
management
livelihoods. Exxon, by contrast, did not react quickly in
terms of dealing with the media and the public; the CEO,
Lawrence Rawl, did not become an active part of the pub6.1 Bhopal
lic relations eort and actually shunned public involvement; the company had neither a communication plan nor
The Bhopal disaster in which poor communication be- a communication team in place to handle the eventin
fore, during, and after the crisis cost thousands of lives, fact, the company did not appoint a public relations manillustrates the importance of incorporating cross-cultural ager to its management team until 1993, 4 years after the
communication in crisis management plans. According incident; Exxon established its media center in Valdez, a
to American Universitys Trade Environmental Database location too small and too remote to handle the onslaught
Case Studies (1997), local residents were not sure how of media attention; and the company acted defensively in
to react to warnings of potential threats from the Union its response to its publics, even laying blame, at times, on
Carbide plant. Operating manuals printed only in English other groups such as the Coast Guard. These responses
is an extreme example of mismanagement but indicative also happened within days of the incident.[31]
of systemic barriers to information diusion. According to Union Carbides own chronology of the incident
(2006), a day after the crisis Union Carbides upper management arrived in India but was unable to assist in the 7 Lessons learned in crisis manrelief eorts because they were placed under house aragement
rest by the Indian government. Symbolic intervention can
be counter productive; a crisis management strategy can
help upper management make more calculated decisions 7.1 Impact of catastrophes on shareholder
value
in how they should respond to disaster scenarios. The
Bhopal incident illustrates the diculty in consistently
applying management standards to multi-national oper- One of the foremost recognized studies conducted on
ations and the blame shifting that often results from the the impact of a catastrophe on the stock value of an organization was completed by Dr Rory Knight and Dr
lack of a clear management plan.[28]
Deborah Pretty (1996, Templeton College, University
of Oxford - commissioned by the Sedgewick Group).
This study undertook a detailed analysis of the stock
price (post impact) of organizations that had experienced
6.2 Ford and Firestone Tire and Rubber catastrophes. The study identied organizations that recovered and even exceeded pre-catastrophe stock price,
Company
(Recoverers), and those that did not recover on stock
price, (Non-recoverers). The average cumulative impact
The Ford-Firestone Tire and Rubber Company dispute
transpired in August 2000. In response to claims that on shareholder value for the recoverers was 5% plus on
their 15-inch Wilderness AT, radial ATX and ATX II their original stock value. So the net impact on sharetire treads were separating from the tire coreleading holder value by this stage was actually positive. The nonto crashesBridgestone/Firestone recalled 6.5 million recoverers remained more or less unchanged between
tires. These tires were mostly used on the Ford Explorer, days 5 and 50 after the catastrophe, but suered a net
negative cumulative impact of almost 15% on their stock
the worlds top-selling sport utility vehicle (SUV).[29]
price up to one year afterwards.
The two companies committed three major blunders
early on, say crisis experts. First, they blamed con- One of the key conclusions of this study is that Efsumers for not inating their tires properly. Then they fective management of the consequences of catastrophes
blamed each other for faulty tires and faulty vehicle de- would appear to be a more signicant factor than whether
sign. Then they said very little about what they were do- catastrophe insurance hedges the economic impact of the
ing to solve a problem that had caused more than 100 catastrophe.
deathsuntil they got called to Washington to testify be- While there are technical elements to this report it is
fore Congress.[30]
highly recommended to those who wish to engage their

8 PUBLIC-SECTOR CRISIS MANAGEMENT

senior management in the value of crisis management.[32]

plans.

Crisis-management plans cover a wide variety of incidents including bomb threats, child abuse, natural disas7.2 Crisis as Opportunity
ters, suicide, drug abuse and gang activities just to list
a few.[37] In a similar fashion the plans aim to address all
Hilburg proers that every crisis is an opportunity to
audiences in need of information including parents, the
showcase an institutions character, its commitment to
media and law enforcement ocials.[38]
its brand promise and its institutional values. To address such shareholder impact, management must move
from a mindset that manages crisis to one that generates 8.2 Government and crisis management
crisis leadership. [9] Research shows that organizational
contributory factors aect the tendency of executives to Historically, government at all levelslocal, state, and
adopt an eective crisis as opportunity mindset. [33] nationalhas played a large role in crisis management.
Since pressure is both a precipitator and consequence of Indeed, many political philosophers have considered this
crisis, leaders who perform well under pressure can ef- to be one of the primary roles of government. Emergency
fectively guide the organization through such crisis. [34]
services, such as re and police departments at the local
James contends that most executives focus on communications and public relations as a reactive strategy. While
the companys reputation with shareholders, nancial
well-being, and survival are all at stake, potential damage
to reputation can result from the actual management of
the crisis issue.[9] Additionally, companies may stagnate
as their risk management group identies whether a crisis
is suciently statistically signicant. [35] Crisis leadership, on the other hand, immediately addresses both the
damage and implications for the companys present and
future conditions, as well as opportunities for improvement. [10]

Public-sector crisis management

level, and the United States National Guard at the federal

level, often play integral roles in crisis situations.
To help coordinate communication during the response
phase of a crisis, the U.S. Federal Emergency Management Agency (FEMA) within the Department of Homeland Security administers the National Response Plan
(NRP). This plan is intended to integrate public and private response by providing a common language and outlining a chain-of-command when multiple parties are mobilized. It is based on the premise that incidences should
be handled at the lowest organizational level possible.
The NRP recognizes the private sector as a key partner
in domestic incident management, particularly in the area
of critical infrastructure protection and restoration.[39]

The NRP is a companion to the National Incidence Management System, which acts as a more general template
Corporate America is not the only community that is vul- for incident management regardless of cause, size, or
nerable to the perils of a crisis. Whether a school shoot- complexity.[39]
ing, a public health crisis or a terrorist attack that leaves
FEMA oers free web-based training on the National
the public seeking comfort in the calm, steady leadership
Response Plan through the Emergency Management
of an elected ocial, no sector of society is immune to
Institute.[40]
crisis. In response to that reality, crisis management policies, strategies and practices have been developed and Common Alerting Protocol (CAP) is a relatively recent
mechanism that facilitates crisis communication across
adapted across multiple disciplines.
dierent mediums and systems. CAP helps create a consistent emergency alert format to reach geographically
and linguistically diverse audiences through both audio
8.1 Schools and crisis management
and visual mediums.
In the wake of the Columbine High School Massacre, the
September 11 attacks in 2001, and shootings on college
campuses including the Virginia Tech massacre, educa- 8.3 Elected ocials and crisis management
tional institutions at all levels are now focused on crisis
management.[36]
A national study conducted by the University of Arkansas Historically, politics and crisis go hand in hand. In defor Medical Sciences (UAMS) and Arkansas Childrens scribing crisis, President Abraham Lincoln said, We live
Hospital Research Institute (ACHRI) has shown that in the midst of alarms, anxiety beclouds the future; we
many public school districts have important deciencies expect some new disaster with each newspaper we read.
in their emergency and disaster plans (The School Violence Resource Center, 2003). In response the Resource
Center has organized a comprehensive set of resources
to aid schools is the development of crisis management

Crisis management has become a dening feature of contemporary governance. In times of crisis, communities
and members of organizations expect their public leaders
to minimize the impact of the crisis at hand, while crit-

9
ics and bureaucratic competitors try to seize the moment
to blame incumbent rulers and their policies. In this extreme environment, policymakers must somehow establish a sense of normality, and foster collective learning
from the crisis experience.[41]
In the face of crisis, leaders must deal with the strategic challenges they face, the political risks and opportunities they encounter, the errors they make, the pitfalls
they need to avoid, and the paths away from crisis they
may pursue. The necessity for management is even more
signicant with the advent of a 24-hour news cycle and an
increasingly internet-savvy audience with ever-changing
technology at its ngertips.[41]
Public leaders have a special responsibility to help safeguard society from the adverse consequences of crisis.
Experts in crisis management note that leaders who take
this responsibility seriously would have to concern themselves with all crisis phases: the incubation stage, the onset, and the aftermath. Crisis leadership then involves
ve critical tasks: sense making, decision making, meaning making, terminating, and learning.[41]
A brief description of the ve facets of crisis leadership
includes:[42]

10 See also
Common Alerting Protocol
Contingency plan
Crisis
Cross-cultural communication
Emergency services
Emergency management
Federal Emergency Management Agency
ISO/TC 223 Societal Security
Management
Management by exception
Risk Management
Social Responsibility

11 References
1. Sense making may be considered as the classical situation assessment step in decision making.
2. Decision making is both the act of coming to a decision as the implementation of that decision.

[1] Shrivastava, P. Mitro, I.I., Miller, D. and A. Miglani, "

Understanding industrial crises.Journal of Management
Studies, 1988, 25, 4, 285-304.

3. Meaning making refers to crisis management as political communication.

[2] ASIS International, Organizational Resilience: Security, Preparedness, and Continuity Management SystemsRequirements with Guidance for Use, ASIS SPC.1-2009,
American National Standard, 2009

4. Terminating a crisis is only possible if the public

leader correctly handles the accountability question.

[3] Seeger, M. W.; Sellnow, T. L.; Ulmer, R. R. (1998).

Communication, organization and crisis. Communication Yearbook 21: 231275.

5. Learning, refers to the actual learning from a crisis

is limited. The authors note, a crisis often opens a
window of opportunity for reform for better or for
worse.

[4] Venette, S. J. (2003). Risk communication in a High Reliability Organization: APHIS PPQs inclusion of risk in
decision making. Ann Arbor, MI: UMI Proquest Information and Learning.
[5] Incident or crisis? Why the debate?".

Professional organizations

[6] Alan B. Bernstein and Cindy Rakowitz (2012). Emergency

Public Relations: Crisis Management In a 3.0 World. p. 5.
ISBN 978-1469159546

There are a number of professional industry associations

that provide advice, literature and contacts to turnaround
professionals and academics. Some are:

[7] Coombs, W. T. (1999). Ongoing crisis communication:

Planning, managing, and responding. Thousand Oaks,
CA: Sage.

1. Turnaround Management Society (International / Focus on Europe)

[8] Lerbinger, O. (1997). The crisis manager: Facing risk and

responsibility. Mahwah, NJ: Erlbaum.

2. Institute for Turnaround (England)

[9] Crisis Leadership. Retrieved 2010-06-22.

3. Turnaround Management Association (International)

4.
Institut fr die Standardisierung von Unternehmenssanierungen (Germany)

[10] James, E. (Spring 2007). Leadership as (Un)usual: How

to Display Competence InTimes of Crisis (PDF). Leadership Preview. Retrieved 2010-06-22.

10

[11] James, Erika Hayes; Roberts, J (2009). Arginine decarboxylase from a Pseudomonas species. Journal of Financial Transformation 125 (2): 6017. PMC 236121.
PMID 1382. Retrieved 2010-06-22.
[12] Rigor and Relevance in Management. 12Manage.com.
Retrieved 2007-10-11.
[13] Infante, D.; Rancer, A.; Womack, D. (1997). Building
communication theory (3rd ed.). Prospect Heights, IL:
Waveland Press.
[14] Coombs, W. T. (2007). Ongoing Crisis Communication:
Planning, Managing, and Responding (2nd ed.). Thousand Oaks, CA: Sage.
[15] James, E.; James, E. H. (2008).
Linking Crisis Management and Leadership Competencies: The
Role of Human Resource Development. Advances
in Developing Human Resources 10 (3): 352379.
doi:10.1177/1523422308316450. Retrieved 2010-0622.
[16] James, Erika Hayes; Lynn Perry Wooten (2010). Why
Discrimination Lawsuits Are a Noteworthy Crisis. Leading Under Pressure. Routledge Academic.
[17] James, Erika Hayes (SeptemberOctober 2000).
Race-Related Dierences in Promotions and Support:
Underlying Eects of Human and Social
Capital. Organizational Science 11 (5): 493508.
doi:10.1287/orsc.11.5.493.15202. Retrieved 2010-0622.
[18] See
http://issuu.com/steelhenge/docs/socialmedia_
crisis?mode=window&backgroundColor=%23222222
[19] Lewis, Adam. How to manage a social media crisis.
[20] Davis, Lanny (May 1999) Truth to Tell: Tell it Early,
Tell it All, Tell it Yourself Notes from My White House
Education. New York: Free Press
[21] Fischer, Robert. P., Halibozek, Edward., & Green, Gion,
(2008) Introduction to Security. 8th Edition, p. 256
ISBN 978-0-7506-8432-3.
[22] Martinne
Geller
Reuters,
http://
www.reuters.com/article/2010/05/07/
us-procter-pampers-idUSTRE6457AH20100507
[23] Dezenhall, E. (2004-03-17). Tylenol Can't Cure All Crisis. Retrieved 2007-10-08.
[24] Rudolph, B. (1986-02-24). Coping with catastrophe.
Time. Retrieved 2007-10-06.
[25] Goldman, A.; Reckard, E. (2007). Tactics dier for 2
rms in crises. Retrieved 2007-10-13.
[26] The Great Pepsi Panic. Newsweek. 27 June 1993.
[27] The Pepsi Product Tampering Scandal of 1993. Retrieved 7 September 2009.
[28] Shrivastava, P. (1987). Bhopal: Anatomy of a Crisis.
Ballinger Publishing Company.

12 FURTHER READING

[29] Ackman, D. (2001). Tire Trouble: The Ford-Firestone

Blowout. Forbes. Retrieved 2014-05-29.
[30] Warner, F. (2002). How to Stay Loose in a Tight Spot.
Fast Company. Retrieved 2007-10-15.
[31] Pauly, J. J.; Hutchison, L. L. (2005). Moral fables of
public relations practice: The Tylenol and Exxon Valdez
cases. Journal of Mass Media Ethics 20 (4): 231249.
doi:10.1207/s15327728jmme2004_2.
[32] Knight, Rory F.; Pretty, Deborah (1996). The Impact of
Catasrophes on Shareholder Value (Report).
[33] James, E.; James, E. H. (2008). Toward an Understanding of When Executives See Crisis as Opportunity.
The Journal of Applied Behavioral Science 44 (1): 94
115. doi:10.1177/0021886307313824. Retrieved 201006-22.
[34] James, Erika Hayes; Lynn Wooten (2010). Leading Under Pressure. Routledge Academic.
[35] The Wall Street Journal Community. Retrieved 201006-22.
[36] Campus Security Summit (RealMedia Streaming
Video).
[37] Crisis management. Kansas City Public Schools. 2007.
[38] Resource guide for crisis management in Virginia
schools (PDF). Virginia Department of Education. 2002.
Archived from the original (PDF) on 2007-08-03. Retrieved 2007-10-15.
[39] Quick Reference Guide for the National Response Plan
(version 4.0)" (PDF). May 2006.
[40] Emergency Management Institute Home Page.
[41] Boin, A.; P. Hart; E. Stern (2005). The politics of crisis management: Public leadership under pressure. New
York: Cambridge University Press.
[42] Hellsloot, I. (2007). Review of The politics of crisis
management: Public leadership under pressure by A.
Boin, P. Hart, E. Stern and B. Sundelius. Journal of
Contingencies and Crisis Management 15 (3): 168169.
doi:10.1111/j.1468-5973.2007.00519.x.

12 Further reading
Barton, L. (2007). Crisis leadership now: A realworld guide to preparing for threats, disaster, sabotage, and scandal. New York, NY: McGraw-Hill.
Borodzicz, Edward P. (2005). Risk, Crisis and Security Management. West Sussex, England: John Wiley and Sons Ltd.
Coombs, W. T. (2006). Code Red in the Boardroom: Crisis Management as Organizational DNA.
Westport, CT: Praeger.

11
Oce of Security and Risk Management Services
(October 2007). Crisis Management Workbook
(PDF). Fairfax County Public Schools.

Dezenhall, E.; Weber, J. (2007). Damage control:

Why everything you know about crisis management
is wrong. Portfolio Hardcover.

Davidson, M.N. (2005). Ethics in Human Resource Management, in P.H. Werhane, R. E. Freeman (Eds.), Blackwell Encyclopedic Dictionary of
Business Ethics. Malden, MA: Blackwell Publishing.

Erickson, Paul A. (2006). Emergency Response

Planning for Corporate and Municipal Managers
(2nd ed.). Burlington, MA: Elsevier, Inc.

Davidson, M.N. (2004). Leading in Black and

White: Working across the Racial Divide in Corporate America. Personnel Psychology 75 (2).
Davidson, M.N. (2004). Here and There: A Conversation about Identity. Industrial-Organizational
Psychologist 41 (3).
Davidson, M.N. (2004). Diversity that matters.
Batten Briengs 3 (1).
Davidson, M.N. (2003). Making the Tough Calls:
Negotiating Exclusion in Inclusive and Diverse Organizations. Industrial-Organizational Psychologist
41 (1).
Davidson, M.N. (2003). Leveraging Dierence for
Organizational Excellence. Batten Briengs 2 (1).
Davidson, M.N. (2002). Inclusion and Power: Reections on Dominance and Subordination in Organizations. Industrial-Organizational Psychologist
40 (1).
Davidson (2001). Diversity and inclusion: What
dierence does it make?". Industrial-Organizational
Psychologist 39 (2).
Davidson, M.N. (2001). The impact of race on
styles of dealing with conict. Sex Roles 45 (5/6):
259276. doi:10.1023/A:1014301429426.
Davidson, M.N. (2001). Mentoring in the preparation of ethnically diverse graduate students. Review of Educational Research 71 (4): 549574.
doi:10.3102/00346543071004549.
Davidson, M.N. (1999). The role of emotion in negotiation: The impact of anger. In R.J. Bies, R.J.
Lewicki, B.H. Sheppard, (Eds.), Research on Negotiation in Organizations. Greenwich, CT: JAI Press
Inc.
Davidson, M.N. (1999). The value of being included: An examination of diversity change initiatives in organizations. Performance Improvement
Quarterly 12 (1): 164180. doi:10.1111/j.19378327.1999.tb00121.x.
Dezenhall, E. (2003). Nail 'em!: Confronting highprole attacks on celebrities & businesses. Amherst,
New York: Prometheus Books.

Feltus, Christophe; Djamel Khadraoui; Cedric Bonhomme (April 69). Electric Blackout Prevention: Toward a Computer-Mediated Weather Alert
Broadcasting Solution. International Conference
on Society and Information Technologies. Check
date values in: |date=, |year= / |date= mismatch
(help)
Ferdman (2002). Inclusion: What can I and my organization do about it?". Industrial-Organizational
Psychologist 39 (4).
Ferdman (2002). Drawing the line: Are some differences too dierent?". Industrial-Organizational
Psychologist 39 (3).
Fink, S. (2007). Crisis management: Planning for
the inevitable. Backinprint.com.
Friedman, R.A. (2001). Managing diversity and
second-order conict. Journal of Conict Management 12 (2): 132153. doi:10.1108/eb022853.
Friedman, R.A. (1999). The role of emotion in negotiation: The impact of anger. In R.J. Bies, R.J.
Lewicki, B.H. Sheppard, (Eds.), Research on Negotiation in Organizations. Greenwich, CT: JAI Press
Inc.
Groom, S.A.; Fritz, J.H. (2011). Communication
ethics and crisis: Negotiating dierences in public
and private spheres. Madison, New Jersey: Fairleigh
Dickinson University Press.
Mitro, Ian I.; Gus Anagnos (2000). Managing
Crises Before They Happen: What Every Executive Needs to Know About Crisis Management. New
York: AMACOM.
Mitro, Ian I. (2003). Crisis Leadership: Planning
for the Unthinkable. New York: John Wiley.
Mitro, Ian I. (2005). Why Some Companies
Emerge Stronger And Better From a Crisis: Seven Essential Lessons For Surviving Disaster. New York:
AMACOM.
Public Relations Review 35 (1) http://www.
sciencedirect.com/science/journal/03638111. contains a collection of articles on crisis management.
Missing or empty |title= (help)
Department of Homeland Security, Federal Emergency Management Agency (September 2007).
National Response Plan.

12

13

Shrivastava, Paul (1987). Bhopal:Anatomy of a crisis. New York: Ballinger.

Smith, Larry; Dan Millar, PhD (2002). Before Crisis
Hits: Building a Strategic Crisis Plan. Washington,
DC: AACC Community College Press.
Smith, Larry; Dan Millar, PhD (2002). Crisis
Management and Communication; How to Gain and
Maintain Control (2nd ed.). San Francisco, CA:
International Association of Business Communicators.
Ulmer, R. R.; Sellnow, T. L.; Seeger, M. W. (2006).
Eective crisis communication: Moving from crisis
to opportunity. Thousand Oaks, CA: Sage Publications.

13

External links

http://www.corpress.uk/?page_id=431 Crisis Management: A review of strategic crisis management

and governance; BS 11200.
http://www.apc.org.hk Academy of Professional
Certication, Certication Body for ISO and Professional Certications
Crisis management and business continuity planning. 2007. United Kingdom Government Business
Link.
Crisis Manager Newsletter, a free collection of 600+
articles on crisis management-related topics.
Crisis Management and Communication Entry Institute for Public Relations article
CRISIS MANAGEMENT AND BUSINESS CONTINUITY A short program oered at MIT
The Institute of Crisis and Risk Management Confers Certied Risk Planner (CRP)", Certied Risk
Trainer (CRT)" and Certied Crisis Consultant
(CCC)" designations
TURNAROUND MANAGEMENT ASSOCIATION Certifying Body for Certied Turnaround
Professionals/Crisis Managers
The International Research Group on Crisis Communication Publications and crisis institutions
database
The Growing Need for Emergency Management
Experts Infographic that visually explains growing
need of professionals in the Crisis Management Industry

EXTERNAL LINKS

13

14
14.1

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