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What is an Organizational Crisis? Published: Sunday, September 13, 1998 By: Dr. Manuel Angel Morales

There is no single, universally accepted, definition of a crisis, but there is a general agreement that a crisis is an event that can destroy or affect an entire organization. This is what Ian Mitroff talks about in Transforming the Crisis Prone Organization. The point is that, if something affects merely a part or one unit of an organization, it may or may not be, or lead to, a crisis. A crisis can affect the very existence of an organization, a mayor product line, a business unit, or the like. A crisis can also damage, perhaps severely, an organization`s financial performance. It can also harm the health and well being of customers, employees, the surrounding community, and the environment itself. A crisis can destroy the public`s basic trust or belief in an organization, its reputation, and its image.

What are the actions and decisions that organizations can take during a crisis? (1) Understanding the Precipitating Crisis- regardless of the way in which its occurrence has come to your attention, your organization has been hit by a crisis if there is a mayor threat to its credibility, identity, or reputation; financial disaster, health threat to consumers, employees, or surrounding community; class-action suit; sabotage attempt; product defect; service stoppage tampering incident; or fill in the blank... (2) Anticipating and Managing the Media- the questions that the media will ask during a crisis will include the following: Is the crisis your organization`s fault, and if not, how do you know is not?, What is your organization doing about the situation, whether or not it is at fault, and specially if it is?, When did your organization first learn about the situation, and what did it then do?, Where there any warning signals that such a crisis may occur, and if there were, what actions did your organization take when it first learned about the situation, to prevent it from occurring?, If warning signals were not detected, or if the organization did not take any actions, why not? (3) Create and Activate Your Crisis Management Team- including representatives from the legal, finance, operations, human resources, health and safety domains. (4) Helping the Injured Is Priority Number One- the number- one priority in all crisis is the prompt treatment of injuries to humans, animals, and the environment. (5) What is the Real Crisis? - you may well assume that an organization "know" what the initial precipitating crisis is, but often it does not. (6) Containing the Damage and Recovering- putting into action specific mechanisms and procedures in order to avoid spreading to unaffected parts of the organization. Different crisis call for different recovery strategies (resume production, reenter buildings, allow citizens to return to their community, recover operations, reputation, technologies, activate redundancies within the system). (7) Communicating to the Media and Other Authorities- honest and open communication does not require, perfect, instantaneous knowledge- "We don`t know exactly what happened, but we promise we`ll get back to you as soon as we do know more". (8) Will your Organization Be a Hero, Victim, or Villain?

How the organization perform on every aspect of the crisis management process will determine in the end whether the public perceive the organization favorably as a hero or a victim or unfavorably as a villain...


Copyright 1998 QBS, Inc.
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