Running head: CRISIS MANAGEMENT PLAN

Crisis Management Plan

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Executive Summary

The study will shed lights on the crisis management scenario in Coles in Australia. It is noted

that the company went against the business ethics and started knocking down the other milk

brands. It affected the morale of the consumers and they alleged against the company by

being very furious. In order to promote the brand, the company shared the pictures of the

empty milk vessels and accused the other milk brands. However, the business strategy

suggests that the company requires maintaining the proper virtue ethics of business as well as

implementing the proper communication transparency for sharing information.

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Table of Contents

Introduction ................................................................................................................................ 3

Identification of the Crisis ......................................................................................................... 3

Theory of Crisis Management ................................................................................................... 4

Crisis Management Model ......................................................................................................... 5

Ethical Considerations in Crisis Management ........................................................................... 7

Stakeholder Analysis ................................................................................................................. 9

Strategy and Tactics ................................................................................................................... 9

Conclusion ............................................................................................................................... 10

References ................................................................................................................................ 12
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Introduction

The current business scenario is surrounded with many of the challenging situations.

The organisations have to deal with such sudden emergencies. The implementation of the

crisis management plan provides the solutions of these hazardous situations. It is noted that

application of the proper communication plan is quite beneficial for mitigating the underlying

risks and resolving the emerging issues (Jin, Liu and Austin 2014). The study will shed lights

on the crisis management scenario in Coles in Australia. The structured crisis management

plan will be discussed in this study by concentrating on the identified issues. The analysis of

the theory based perceptions will also be discussed in this study.

Identification of the Crisis

In recent time, Coles face a significant challenge with the public relation practices.

There is the allegation against Coles was unable to sell the alternatives to the supermarket

milk brands. The shoppers were very furious when the Facebook pages flooded with photos

of empty shelves of other milks brands (News.com.au 2016). Along with Coles, Woolworths

face the same scenario during such times. The angry shoppers exclaimed that Coles is

deliberately holding back the supplies of different milk brands for selling their brands more

effectively. The dairy farmers started encouraging people to purchase only the “branded

milk” except the milk brand of Coles. Coles introduced the new pricing strategy to knock

down the other milk brands. The company started selling the milk at $1/L, which was a bold

move and it was transformed into the higher risks. The issue created the significant impact on

the business functionalities (News.com.au 2016).

Analysis of the Issues

The identified issue highlights the recent crisis faced by Coles, which is a renowned

retail brand in Australian market. The allegations against the company imply that the
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company faced most of the challenges in the decision making process. The inefficient

decision making process led the business towards the crisis, which affected the business

functionalities in a significant manner. It is noted that the company went against the business

ethics and started knocking down the other milk brands. It affected the morale of the

consumers and they alleged against the company by being very furious. The issue emerged

since the management failed to make the proper communication with the associated

employees (Alexander, 2014). The mismanagement of the business promotions is also one of

the major reasons for such crisis scenario. The publicity in the social media was quite

insignificant for the business reputation. The pictures of empty milk vessels shared in the

Facebook pages made the customers more furious. However, concentrating on such crisis

scenario, it is necessary to analyse the case study by describing the theoretical perspectives of

business ethics and crisis management.

Theory of Crisis Management

The crisis management theory indicates that the business management requires

identify the proper transparency and the efforts for resolving the underlying issues.

Maintaining the proper communicational transparency and implementing the proper strategic

decision is beneficial for mitigating the crisis scenario (Spinks, 2015). There are some of the

crisis management theories, which have the significant impact in managing the situational

hazards of the organisations. These theories are discussed further:

Structural Functions Systems Theory

According to Snyder and Diesing (2015), the structural functions system theory is

mainly depending on the high level of communication. The communication transparency

plays the pivotal role in this theoretical process. If the management is efficient enough in

discussing the undertaken organisational functionalities with the employees by establishing

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the proper communication level, it will be helpful enough in ensuring the better performance

parameter. During any crisis situation, the management needs to stand up and face the people.

Avoiding the situation will not resolve the conflicts. The open communication is the major

weapon in managing such theoretical perspectives.

Diffusion of Innovation Theory

The Diffusion of Innovation Theory indicates that the organisation must share the

relevant information during the situational emergencies (Sung and Hwang, 2014). Sharing the

proper information regarding the crisis scenario may bring more innovative ideas to resolve

the issues. When the management is sharing such information with the associated workers,

they come up with alternative ideas. The application of the innovative ideas would be much

beneficial for the company to take the company out of the crisis scenario.

Unequal Human Capital Theory

If the workplace maintains the discriminations between the diverse working groups, it

may lead towards severe form of conflicts in the internal management scenario.

Discriminations on the grounds of job profile, caste, race, and salary would lead the

employees towards job dissatisfaction (Snyder and Diesing 2015). Automatically, the

organisational productivity will be decreased due to the lack of motivations and

discriminative attitudes (Ayios et al. 2014). During such time, the company may face the

internal conflicts, which may affect the business functions in a significant manner.

Crisis Management Model

The model of crisis management is recognised through three different stages. These

stages of crisis management are addressed further:

Stage 1: Diagnosis of the Crisis

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The first stage of crisis management indicates the identification of the emergency

situations that have the special impacts on the organisational functions. The managers and the

leaders need to derive the sense of warning during such stage (Sung and Hwang 2014). In this

case study, the management firstly needed to be concentrated about the promotional process

of the milk brands. The Facebook posts and dominating the other milk brands in the market

were the most insignificant decisions made by the upper management. However, once the

issue was identified, it is essential for the management of Coles to monitor the decision

making process and the promotional activities.

Stage 2: Planning

The second stage refers to the structured planning for managing the crisis situation.

During the crisis situation, the management of Coles needs to talk to the employees and

suggest the good strategies to be implemented. It will be helpful in mitigating the current

conflicts and get the reputed position back.

Stage 3: Adjustments with the Changes

Change is evitable and adopting the changes can bring more efficiency in the business

context. When any crisis situation arises, the company faces the difficult scenario and

enormous changes (Coombs 2014). It is necessary to adopt these changes that can create the

effective consequences to strengthen the organisational position.

The management of Coles also needs to focus on these stages of Crisis Management

Model. Incorporating these theoretical perspectives in the business context will be helpful for

Coles to get out of this crisis situation. However, the management of the company has to take

such initiatives to implement such strategic model.

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Ethical Considerations in Crisis Management

The crisis is considered as the unpredictable threat that creates the negative influence

in the organisational scenario, stakeholders, and industries. Therefore, it is necessary to

maintain some of the business ethics, which protect the companies from these hazardous

situations.

 The business companies needs to follow the ethical virtues that recognise the potential

impacts of the community during a crisis situation.

 The concentration on the excellence virtue determines that the management of the

company requires undertaking the significant performance for the each phases of

crisis management (Weiss 2014).

 The integrity virtue ethics is focused on the multi-disciplined level of proper

behavioural aspects that can resolve the emerging conflicts.

 Finally, the judgment virtue initiates the idea of the appropriate course of actions that

will create the positive impacts on the organisational performance (Schnackenberg

and Tomlinson 2016).

Maintenance of these ethical virtues may lead the organisation towards achieving the

business goals by mitigating the underlying issues. Moreover, it is even necessary to apply

these codes of ethics to manage a crisis scenario.

Environmental Scanning and Media

The public media and the environmental scanning are the major factors for the

survival of an organisation. In order to identify the organisational situation, the SWOT

analysis would be much preferable.

Strengths
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 The well-known brand

 Product varieties

 Well established customer base

 Low price of the goods

Weakness

 Lack of information sharing system

 Lack of communication transparency

 Ineffective decision making

Opportunities

 Demands for the retail products and milk brands

 The open public media for promotions

 Exploring the market niches

 Establishment of business innovations (Grimmer, Miles, and Grimmer 2016).

Threats

 Aggressive promotional marketing

 Dominating the other milk brands

 Presence of other branded milk or dairy farmers

The identification of the environment specifies that the company has enormous

opportunities to explore the business areas if the management can implement the proper

business strategy (Coombs 2013). Deriving help from the media for the promotional purposes

is one of the most efficient strategies for a business. However, if the business fails to use the

media benefits properly, it becomes the threatening scenario for the company. The company
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introduced the low price of the milk. The aggressive promotions through social media were

also quite inefficient step undertaken by Coles. Therefore, it is seen that the company faced

such crisis situations which is affecting the business functions in a significant way.

Stakeholder Analysis

The major stakeholders of Coles are:

Internal Stakeholders External Stakeholders

1. Employees 1. Customers

2. Management 2. Suppliers

3. Local Communities

4. Interest Groups

Table 1: Stakeholders of Coles

(Source: Wesfarmers.com.au 2016)

The company is committed towards engaging the stakeholders for creating the long

term values. Coles is mainly focusing on providing the satisfactory returns for the associated

shareholders (Wesfarmers.com.au, 2016). Therefore, the shareholders can invest more

capitals for the business procedures and establishing the long term sustainability.

Strategy and Tactics

The crisis scenario of Coles indicates that the management took the wrong decision of

promoting the milk brand through social media. Concentrating on such consequences, it can

be inferred that the company requires implementing the proper business strategy, which will

mitigate the emerged issues. If the company can establish the communicational transparency

among the stakeholders, it will be beneficial to share the purpose or information of the
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business marketing (Olsson 2014). The maintenance of the proper communication

transparency level will be helpful for the employees to bring out the effective performance

parameter, which is essential. Moreover, when the company will share the information with

the stakeholder group, it will be easier to resolve such conflicting scenario (Kim and Sung

2014). The information sharing through the effective communication channel is one of the

most significant strategies that can help the organisation to mitigate such issues.

Professional Presentation

The study identifies the current crisis situation faced by Coles, the giant retail chain in

Australian market. The aggressive promotional marketing through social media brought

hazardous situations for the company. However, the analysis of the current business

functionalities, it is noted that the company lacks the effective communication transparency

and the high level of information sharing systems. Therefore, the management of Coles needs

to pay attention towards establishing the communication transparency for sharing the

necessary information. The effective communication can even create positive impacts on the

business decision making scenario. Hence, the company requires focusing on implementing

the business strategy and tactics wisely.

Conclusion

The study points out the crisis management scenario at Coles, which is a renowned

retail chain in Australia. Recently, the company introduced the lower price of the milk. In

order to promote the brand, the company shared the pictures of the empty milk vessels and

accused the other milk brands. This step made the customers and dairy farmers much angry

and they put the allegations against Coles. However, the inefficient decision making and the

lack of communicational transparency are the major reasons for such crisis scenario.

However, the business strategy suggests that the company requires maintaining the proper
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virtue ethics of business as well as implementing the proper communication transparency for

sharing information. Maintaining these steps is helpful enough for the company to mitigate

the crisis scenario. Moreover, the company can establish the long term value with their

potential stakeholders. Eventually, such steps will lead the business towards achieving the

long term sustainability by gaining back its reputation. Following such strategic decisions

would be beneficial for the associated workers as well.

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References

Alexander, D.E., 2014. Social media in disaster risk reduction and crisis

management. Science and Engineering Ethics, 20(3), pp.717-733.

Ayios, A., Jeurissen, R., Manning, P. and Spence, L.J., 2014. Social capital: a review from an

ethics perspective. Business Ethics: A European Review, 23(1), pp.108-124.

Coombs, W.T., 2013. Applied crisis communication and crisis management: Cases and

exercises. Sage Publications.

Coombs, W.T., 2014. Ongoing crisis communication: Planning, managing, and responding.

Sage Publications.

Crandall, W.R., Parnell, J.A. and Spillan, J.E., 2013. Crisis management: Leading in the new

strategy landscape. Sage Publications.

Grimmer, L., Miles, M.P. and Grimmer, M., 2016. The performance advantage of business

planning for small and social retail enterprises in an economically disadvantaged

region. European Journal of International Management, 10(4), pp.403-421.

Jin, Y., Liu, B.F. and Austin, L.L., 2014. Examining the role of social media in effective

crisis management: The effects of crisis origin, information form, and source on publics’

crisis responses. Communication research, 41(1), pp.74-94.

Kim, S. and Sung, K.H., 2014. Revisiting the effectiveness of base crisis response strategies

in comparison of reputation management crisis responses. Journal of Public Relations

Research, 26(1), pp.62-78.

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News.com.au, 2016. Shoppers’ fury over milk shortage. [online] NewsComAu. Available at:

<http://www.news.com.au/finance/business/retail/shoppers-furious-over-milk-shortage/news-

story/c8600a8a77678e2309489dca70204c7a> [Accessed 29 Jan. 2017].

Olsson, E.K., 2014. Crisis communication in public organisations: Dimensions of crisis

communication revisited. Journal of Contingencies and Crisis management, 22(2), pp.113-

125.

Schnackenberg, A.K. and Tomlinson, E.C., 2016. Organizational transparency: A new

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Management, 42(7), pp.1784-1810.

Snyder, G.H. and Diesing, P., 2015. Conflict among nations: Bargaining, decision making,

and system structure in international crises. Princeton University Press.

Spinks, M., 2015. Crisis management. Emergency Nurse, 22(9), pp.12-12.

Sung, M. and Hwang, J.S., 2014. Who drives a crisis? The diffusion of an issue through

social networks. Computers in Human Behavior, 36, pp.246-257.

Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-

Koehler Publishers.

Wesfarmers.com.au. 2016. Coles. [online] Sustainability.wesfarmers.com.au. Available at:

<http://sustainability.wesfarmers.com.au/our-businesses/coles/coles/> [Accessed 29 Jan.

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