Crisis Management Part One

8/13/2019 Crisis Management Part One

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Crisis leadership and

Models and theories associated withcrisis management


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This report aims to answer the following: Discuss the crisis leadership.

Explain the models and theories associated

with crisis management.


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This report will focus mainly on the Crisis

leadership and Models and theories associated with

crisis management.

First, we will discuss Crisis Leadership and giveimportant details about it. Next, the reporters will

explain the Models and theories associated with crisis

management.


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Lastly, the reporters will give

recapitulation in this report.


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Crisis Leadership


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Erika Hayes James, an organizational psychologist at

the University ofViriginiasDarden Graduate School of

Business, identifies two primary types of organizational

crisis. James defines organizational crisis as any

emotionally charged situation that, once it becomes public,

invites negative stakeholder reaction and thereby has the

potential to threaten the financial well-being, reputation, or

survival of the firm or some portion thereof.


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Two Types of Organizational Crisis

1. Sudden crisis

2. Smoldering crisis


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Sudden crisis are circumstances that occur without

warning and beyond an institutions control. Consequently,

sudden crisis are most often situation for which the

institution and its leadership are not blamed

SUDDEN CRISIS


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Smoldering crisis differ from sudden crisis in thatthey begin as minor internal issues that, due to managers

negligence, develop to crisis status. These are situation

when leaders are blamed for the crisis and its subsequent

effect on the institution in question.


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James categorizes five phrases of crisis that require specific crisis

leadership competencies. Each phase contains an obstacle that a

leader must overcome to improve the structure and operations of an

organization. Jamesscase study on crisis in the financial services

sector, for example, explores why crisis events erode public trust in

leadership. Jamess research demonstrates how leadership

competencies of integrity, positive intent, capability, mutual

respect, and transparency impact the trust-building process.


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1. Signal detention

2. Preparing and prevention

3. Containment and damage control4. Business recovery

5. Learning


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Signal detention is the stage in a crisis in

which leaders should, but do not always, sense earlywarning signals (red flag) that suggest the

possibility of a crisis. The detection stages of a crisis

include: sense-making: represents an attempt to

create order and make sense, retrospectively, ofwhat occurs. Perspective-taking to consider another

persons or groups point of view.


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It is during this stage that crisis handlers begin

preparing for or averting the crisis that had been

foreshadowed in the signal detection stage.Organizations such as the Red Crosss 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 theincredibly speedy and well-coordinated effort to get

supplies to the Gulf Coast of the United State in

anticipation of Hurricane Katrina.


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When crisis hits, organizations must be abe to

carry on with their business in the midst of the crisiswhile simultaneously planning for how they will

recover from the damage the crisis caused. Crisis

handlers not only engage in continuity planning

(determining the people, financial, and technologyresources needed to keep the organization running),

but will also actively pursue organizational resilence.

Business recovery


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In the wake of crisis, organizational decisionmakers adopt a learning orientation and use priorexperience to develop new routines and behaviorsthat ultimately change the way the organizationoperates. The best leaders recognize this and are

purposeful and skillful in finding the learningopportunities inherent in every crisis.

Learning


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Models and theoriesassociated with crisis

management


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Successfully defusing a crisis requires an

understanding of how to handle a crisisbefore they

occur. Gonzalez-Herrero and Pratt found the differentphrases of Crisis management.


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There are 3 phases in any Crisis Management are as below

1. The diagnosis of the impending trouble or the danger

signals.

2. Choosing appropriate turnaround strategy.

3. Implementation of the change process and its monitoring.


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No corporation looks forward to facing a situationthat causes a significant disruption to their business,

especially one that stimulates extensive media coverage.

Public scrutiny can result in a negative financial, political,

legal and government impact. Crisis management

planning deals with providing the best response to crisis.


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Preparing contingency plans in advance, as part of crisis management

plan, is the first step to ensuring an organization is appropriate prepared

for a crisis. Crisis management teams can rehearse a crisis plan by

developing a simulated scenario to use a drill. The plan should clearlystipulate that the only people to speak publicly about the crisis team

members. The first hour after crisis breaks are most crucial, so working

with speed and efficiency is important, and the plan should indicate how

quickly each function should be performed.


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When a crisis will undoubtedly cause asignificant disruption to an organization, abusiness continuity plan can help minimize

the disruption. First, one must identify thecritical functions and processes that arenecessary to keep the organizationrunning. Then each critical function and orprocess must have its own contingency

plan in the event that one of the functionsprocesses ceases to fails.

Business continuity planning


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Testing these contingency plans by rehearsing the required actions

in a simulation will allow for all involved to become more sensitive

and aware of the possibility of a crisis. As a result, in the event of an

actual crisis, the team members will act more quickly andeffectively.


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James defines organizational crisis as any

emotionally charged situation that, once it becomespublic, invites negative stakeholder reaction and thereby

has the potential to threaten the financial well-being,

reputation, or survival of the firm or some portion thereof.

Two Types of Organizational Crisis

1. Sudden crisis

2. Smoldering crisis


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There are 3 phases in any Crisis Management are as below

1. The diagnosis of the impending trouble or the danger

signals.2. Choosing appropriate turnaround strategy.

3.Implementation of the change process and its

monitoring.


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five phrases of crisis

1. Signal detention

2. Preparing and prevention

3. Containment and damage control

4. Business recovery

5. Learning

Documents

Crisis Management Part One