Unit 11: Crisis Management Flashcards
What is meant by crisis?
Crisis is a time of intense difficulty, danger, or trouble
How is a business crisis different from a business problem?
A business crisis is much more serious and attention-demanding than a business problem
List the 6 types of crises and explain them.
The 6 types of crises are
1) international = whereas two countries have conflict between them
2) monetary = whereas a country’s currency is fast losing its value
3) financial = whereas a country’s financial institutions have too many non-performing loans
4) economic = whereas a country has high inflation, massive unemployment, and a falling GDP
5) domestic = whereas a country has an internal problem
6) political = whereas a country has a problem related to its government, etc.
Explain bankruptcy, boycott, natural disaster, recall, recession, scandal, and strike.
Bankruptcy is when a company cannot pay back its debt.
Boycott is when someone takes action against a party by not buying or using their product.
Natural disasters are events occurring naturally that results in loss.
Recall is when a company is required to have their products taken back in.
Recession is when the economy of a country isn’t doing very good — typically at a -5% growth rate.
Scandal is an event regarded as morally or legally wrong, causing a public outrage.
Strike is when workers stop working for a company in hopes of a beneficial response.
How is a strike different from an industrial action?
A strike is when workers stop working completely, but an industrial action is when workers take action that will harm the company they work for but not hurt the people e.g. when train station workers let people go on for free
What is meant by a bubble in economics? and what happens when the so-called bubble bursts?
A bubble is a market where prices are inflated much higher than the item’s actual value. When the bubble bursts, prices crash and demands fall.
How does a contingency plan differ from an action plan?
A contingency plan is a plan designed to take a possible future event into account; what will we do if x happens; probably going to be used
An action plan is a detailed plan outlining actions needed to reach one or more specific goals; what will we do about x; is going to be done
What’s the difference between a press conference and a press release?
A press conference is held face-to-face, but a press release is a statement or a letter
Why can crises be so damaging to businesses?
Because it costs them a lot, and their reputation may not recover
Companies are judged on how well they treat customers but who else? Give an example about what they can do.
They are also judged based on how well they treat their employees; companies can offer employee assistance programs to help them
Why does it make business sense for an organization to be caring?
Because staff turnover costs them a lot, and a good image positively affects sales
What is meant by damage limitation?
Damage limitation are actions taken to limit or lessen the damage caused by crises.
What is meant by a public relations nightmare?
A public relations nightmare is when all the media reports badly about you
What is an employee assistance program?
An employee assistance program is a work-based intervention program designed to assist employees in resolving personal problems
What is a flow of information?
Flow of information is the exchange of information among parties related to a business.
