Managing Corporate Crises and Issues
Definition
of a Crisis
“Big trouble” (headline on front page of
newspapers)
An event that brings, or has the
potential for bringing, an organization into disrepute and imperils its future
profitability, growth, and possibly, its very survival
Source : The Crisis Manager. Otto
Lerbinger. 1997
Characteristic
of a Crisis
Suddenness
Uncertainty
Time compression (decision under stress)
Why
Is More Crisis Occurring ?
Communication
technology
-Government’s disclosure policy
-Independent watchdog groups
-Investigative journalism
-Media love crises
-“Whistle-blowing”
Types
of Crisis
Acute
:
something suddenly happens
Chronic
:
escalating problem, tendency to not label it as crisis yet until something else
happens (threshold)
-Moderate
n Involves bad
press
n Reputation is at
stake
n Impact may not
be too broad
-Severe
n Survival,
profitability and growth of the company is at stake
n People at large
want major restructuring (“head to roll”)
Vulnerability
in a Crisis
Certain
company and/or industry are more vulnerable to have a crisis, e.g.:
-Industry leader
-Conglomerate
-MNCs
-Chemical industry
-Automobile industry
The
Beauty of Crisis Management
-May influence how the company is
perceived for years to come
-Crisis provide opportunity for PR
personnel to prove their worth an impress management with their skills and
talents
Goals
of Crisis Management
-Terminate the crisis quickly
-Limit the damage
-Restore credibility
Typology
of Crisis
- Crises of
the Physical World :
-Nature
-Technology
- Crises of
The Human Climate
-Confrontation
-Malevolence
- Crises of
Management Failure :
-Skewed values
-Deception
-Misconduct
Communication
During a Crisis
-Crisis creates an information gap –
needs to speedily fills the void, can’t stay silence
-The first hours after a crisis event
are of critical importance – gain control over the reporting of the event :
n Describing what
happened
n Defining the
event
n Framing the
context in which the crisis is judged
Burger’s
Rules of the Game
-“If a question contain offensive
language or simply word you do not like, do not repeat, event to deny them”
-“Do not argue with a reporter or lose
your cool”
-State the most importan fact at the
beginning”
-“Do not exaggerate the fact”
-“If the reporter asks a direct question
he or she is entitle to an equality direct answer”
Source : How to Meet the Press, Harvard
Business Review, Chester Burger, 1975
Most
Important Rules
-If an executive does not know the
answer to a question, he or she should simply say. “I don’t know, but I’ll find
out for you”
-“TELL THE TRUTH, EVEN IF IT HURTS”
Source : How to Meet the Press, Harvard
Business Review, Chester Burger, 1975
Communication
During Crisis
-Ascertain & face up to the reality
of a crisis
-Active crisis management team and alert
top management
-Designate crisis media center
-Conduct necessary fact-finding (who,
what, when, where, why, how
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