Crisis management refers to the process via which an organization handles a major event that poses a threat to its reputation, stakeholders or general public. Its study originated with large-scale environmental and industrial disasters that occurred in the 1980s. Crisis management is seen as the most critical process in any public relations exercise.
Owing to the unpredictable nature of global occurrences, organizations must have the ability of coping with the possibility of drastic changes in how they conduct business.
Often, crisis management requires that decisions are reached within a short time-frame. This normally happens after a certain event has already happened. To minimize uncertainty in a case of a crisis, organizations often create a plan for managing unexpected events.
Different from risk management that involves planning for events that can occur in the future, crisis management involves reacting to a particular event after it occurs. An oil firm for instance, could put in place a plan for handling possible oil spills. If such a calamity does occur, its scale along with public-opinion backlash as well as cleanup-cost may greatly vary and even exceed expectations.
Elements of a Crisis
Three primary elements are common to any crisis. These include:
- a threat posed to the organization,
- the aspect of surprise, as well as
- the short time required for decision-making.
A crisis can be viewed as a transformation process that departs from the old system of doing things. As such, need for change is the fourth defining characteristic. If change is not required, such an event could be more accurately described as an incident or failure.
The discipline of crisis management involves techniques and skills required for identifying, assessing, understanding as well as coping with serious situations. This happens especially from the time it first happens up to when recovery procedures begin. Crisis management is situation-based system of management and delineates clear roles along with responsibilities plus process-related organizational requirements across the entire company.
Response to Crises
Response initiated includes action in prevention, assessment, handling and termination of the crisis. Management of crises targets effective preparedness, ensuring adequate and swift crisis response, maintaining clear reporting and communication lines and agreeing to rules for terminating the crisis.
Aspects of Crisis Management
Varied aspects are involved in crisis management.
- One is the methods applied for responding to both reality and perception of the crises.
- Another is establishing the metrics for defining scenarios constituting a crisis, which consequently should trigger the requisite response mechanisms.
- The last one is communication that occurs in the response phase of scenarios for managing emergencies.
Methods that are customized for business or organizational crisis management are known as crisis-management plan. Occasionally, crisis management is termed as incident management, although a number of industry professionals do not consider this term to be accurate.
Having a crisis mindset factors in the ability of considering the worst-case scenario and simultaneously suggesting multiple plausible solutions. Though an accepted intervention mechanism, using trial and error might not offer great results as the first line of defense. It is thus necessary maintaining an array of contingency plans, apart from always remaining on alert.