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T H E C H I N E S E W O R D
“ C R I S I S ” I S C O M P O S E D
O F T W O C H A R A C T E R S :
“ D A N G E R ” A N D
“ O P P O R T U N I T Y ”
CRISIS MANAGEMENT
M
ankind has faced crises
throughout history, from
natural disasters to man-
made calamities. Businesses face
similar crises—internal or external
events can pose major threats to
the organization. Unpredictable in
nature, they require quick decision
making and action from leaders.
Globalization has increased the
complexity of the business world,
so an event in one country canaffect businesses across the world.
Digital, 24/7 communication means
that news travels far and fast. The
result is that crises may seem to
be more prevalent than they were
during the predigital age.Responding to crisis
The random nature of crises means
that they can strike anywhere.
Typical crises include technological
failure; employee actions, fromA company develops a
crisis management
plan covering “who, what,
when, where, and how” for
the first critical hours.The crisis is effectively
managed and, if possible,
turned into an
opportunity.An unpredictable,
major crisis hits the
company, requiring
immediate decisions and
actions.Leadership takes
control and puts the
crisis management
plan into action.IN CONTEXT
FOCUS
Business crisesKEY DATES
1987 Ian Mitroff, Paul
Shrivastava, and Firdaus
Udwadia publish the paper
“Effective Crisis Management.”1988 Shrivastava, Mitroff,
Danny Miller, and Anil Miglani
say that organizational crisis
requires an interdisciplinary
approach, using psychological,
technological-structural and
social-political perspectives.1995 A. Gonzalez-Herrero and
C. Pratt suggest a model for
crisis management: diagnosis
of impending trouble; decision
and actions; implementation of
change; and monitoring.2000s Business continuity
planning is introduced to deal
with terrorism and major
technology failure.2010s Social media allows a
crisis to be publicized rapidly,
often to a company’s detriment.