5.7 Flashcards
what is crisis management?
Crisis management is the process of managing the business as a reaction to an event that has taken place. It is a strategy that places the business in a better position to recover following the crisis. It creates systematic steps and efforts to limit the damage from the crisis. It is therefore reactive to an event.
what is contingency planning?
Contingency planning is the process of identifying potential risks to the business and thereby developing a plan and put in place procedures that allows the business to fall back to the plan in the event of a crisis. This is therefore proactive planning.
what is the realtionship between crisis managemnet and congingency planning?
Contingency planning and crisis management are two complimentary elements used in business to handle a crisis.
Although one is reactive (crisis Management) and the other is proactive (contingency planning) if companies do not operate both these two strategies at the same time, the consequences may involve failure to fully recover from the event.
Because crisis management is designed to prevent or diminish the damage of a crisis, it has a number of phases that include….?
Pre-crisis - prevention,
Crisis- response, and
Post-crisis – preparation and planning for the next crisis.
expand on the posy-crisis phase?
The post-crisis phases of crisis management is essentially contingency planning which now identifies, plans and rehearses the response to potential threats that may reoccur.
what are some reasons as to which crisis managemnet might be nessisary?
Crisis management might happen due to different reasons; such as: Human activity (financial crisis 2008), Industrial accidents (BP golf of Mexico disaster 2010) or natural disasters (tsunami in japan 2010). A Pandemic like COVID-19 is the latest example.
what is 100% needed in crisis management?
Transparency
communication
speed
controle
expand on transparicy as some thing needed during crisis managemnet?
Following the occurrence of an event, full disclosure involves being transparent and being truthful to all stakeholders. If companies fail to be transparent, the aftermath of when the truth emerges can harm the business and have more detrimental consequences on the company. In addition, not being transparent may further deepen the crisis .
expand on communication as some thing needed during crisis managemnet?
This is most likely the single most important aspect in Crisis Management.
The way that the business is able to communicate during the crisis will determine if the event itself or the consequences of the ongoing event will spiral and escalate out of control.
By developing a crisis communication plan, understanding how media works, taking advantage of the “golden hour” (the hour immediately following the crisis event) the business will prevent the wrong information from circulating.
expand on speed as some thing needed during crisis managemnet?
this refers to how much time there is to respond to a crisis or incident breaking in the media. This is impacted bysocial media, eyewitness of events or rumours appearing on Twitter at a speed once unimaginable.
As mentioned before the “golden hour” refers to the speed of the response. Hence, a swift response within the shortest period of time will ensure that the damage is minimized and damage control measures are in place.
expand on controle as some thing needed during crisis managemnet?
- keep in control of the crisis and not be swept along by events helps to present an image of calm and confidence. This will help restore the image of the organization once the crisis has passed. Having a contingency plan will greatly help keeping control.
Contingency planning could be compared with a list of “what if…?” scenarios, with simulations and procedures in place. what factors are particually important?
cost
time
risk
safty
expand on costs as a factor particually important for contgency planning?
Although the planning costsfor a possible crisis can be frustrating, expensive and overwhelming, the cost of not having a plan in place can be catastrophic.
Despite the costs, contingency planning helps firms be better prepared and eliminates the indecision and uncertainty that usually follows an event.
expand on time as a factor particually important for contgency planning?
Depending on the number of contingency related events that a firm may wish to prepare for, the opportunity cost of the time spent to identify the events, plan the events, and rehearse the events can require months or years. A business that spends too much time and excessive resources on planning the contingency plan may find itself unable to execute it.
On the other hand, the more time spend on contingency planning, the more prepared a business is and therefore able to recover from the crisis. A balance between time spent on contingency planning and dedication to the core business activity must be well planned.
expand on risk as a factor particually important for contgency planning?
Contingency planning begins with identifying the potential risks and involves minimizing the risk itself and its outcome. Similar to any planning, the time and effort spent it risk aversion may become excessive and obstruct the core business activity.
However, if risks are identified and risk preparation is at its optimum, the outcome of the risky event will be easily contained.
