Crisis management

1. What is Crisis? A crisis is any situation that threatens the integrity or reputation of your company,
usually brought on by adverse or negative media attention.

2. A Crisis Situation  On October 3, 2012, the Food and Drug Administration Commissioner received
complaints about infestation in two bars of Cadbury Dairy Milk  Resulting in adverse media coverage
touched close to 1000 clips in print and 120 on TV news channels  Company’s reputation and credibility
was under intense scrutiny  Sales volumes came down drastically in the first 10 weeks  Retailer
stocking and display dropped, employee morale was shaken

3. Characteristics of Crisis 1. Unexpected 2. Creates Uncertainty 3. Is seen as a threat to important goals

4. Leads to a process of transformation

4. Types of Crisis

5. What is Crisis Management? Crisis management is the process by which an organization deals with a
major event that threatens to harm the organization, its stakeholders, or the general public.

6. About Crisis Management

7. Facts about Crisis Management  51% of the organizations do not have a crisis management plan in
place  59% of organizations do not have written policies and procedures for crisis management
According to The American Management Association’s Survey

8. Steps of Crisis Management Crisis Team Getting Started Issue Identification Policy Preparation
Preparing Specific Responses

9. Crisis Team  Prepares plan and meets regularly to update and test it  Responsible for identifying
various scenarios that could adversely affect the company  Develop a model or plan to follow in each
scenario.  Prepare media statements, press releases, notification lists and other materials that helps
keep a crisis situation under control  Includes top management, operations personnel, public relations
experts, legal assistance, and insurance carriers

10. Getting Started  Crisis Management plan should be a part of an overall safety and emergency
preparedness plan  It should be a standard part of an overall strategic planning process  It should deal
with what the public thinks happened i.e. the perception of the people

11. How to get started on crisis Management Plan? Predict Position Prevent Plan Persevere Evaluate

12. Issue Identification  This stage is an ongoing process  The crisis team must identify every
imaginable issue and list them

13. Policy Preparation  The response towards crisis should be honest, timely and direct.  A prepared,
approved and distributed policy document helps in handling media in a +ve way and makes the
company appear cooperative and non-secretive  Incorporating ethical standards into the policy,
keeping in mind the interest of all the parties, is vital  Correct, current and complete information
should be provided about the crisis and the company
14. Preparing Specific Responses  Defining the scope of the crisis: Local or Regional, National or
International  Establishing a position statement for each issue identified  Establishing a unified
response  Crisis management team must be aware about their roles individually and fully prepared

15. Preparing Specific Responses (Cont.) Preparing for Media  Understanding what Media wants 
Preparation of sample press release  Keeping the message simple, clear, consistent, and customized to
each audience  Anticipating media questions and establishing answers for each situation and
continuously updating the questions  Media should be briefed about what’s happening continuously
and regularly  Media calls must be answered quickly and completely  A media log must be maintained

16. Post-Crisis Review  Crisis Management is a continuous process  Each crisis situation must be
reviewed and evaluated  Studying the media coverage  Understanding the company’s image post the
crisis  Short and long term programs to rebuild image  Review the position statements for relevance
and necessary revisions  Evaluation and effectiveness of the crisis management team

17. How did Cadbury Manage Crisis? Key Challenge Restore confidence in the key stakeholders Build
back credibility for the corporate brand through the Media Bring back the sales number

18. How did Cadbury Manage Crisis? (Cont.) Focused and intense communications program was
implemented over the next six months to rebuild credibility and restore confidence among the key
stakeholders

19. How did Cadbury Manage Crisis? (Cont.)

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Crisis management
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Crisis management is the process by which an organization deals with a disruptive and unexpected
event that threatens to harm the organization or its stakeholders. [1] The study of crisis management
originated with large-scale industrial and environmental disasters in the 1980s. [2][3] It is considered to
be the most important process in public relations.[3]
Three elements are common to a crisis: (a) a threat to the organization, (b) the element of surprise,
and (c) a short decision time.[4] Venette[5] argues that "crisis is a process of transformation where the
old system can no longer be maintained". Therefore, the fourth defining quality is the need for
change. If change is not needed, the event could more accurately be described as a failure or
incident.
In contrast to risk management, which involves assessing potential threats and finding the best ways
to avoid those threats, crisis management involves dealing with threats before, during, and after they
have occurred. It is a discipline within the broader context of management consisting of skills and
 techniques required to identify, assess, understand, and cope with a serious situation, especially
from the moment it first occurs to the point that recovery procedures start.

Contents

 1Introduction
 2Types of Crisis
 3Information Technology and workplace
o 3.1Natural disaster
o 3.2Technological crisis
o 3.3Confrontation crisis
o 3.4Crisis of malevolence
o 3.5Crisis of organizational misdeeds
 3.5.1Crises of skewed management values
 3.5.2Crisis of deception
 3.5.3Crisis of management misconduct
o 3.6Workplace violence
o 3.7Rumors
 4Crisis leadership
o 4.1Sudden crisis
o 4.2Smoldering crisis
o 4.3Signal detection
o 4.4Preparation and prevention
o 4.5Containment and damage control
o 4.6Business recovery
o 4.7Learning
o 4.8Crisis communication
 5Models and theories associated with crisis management
o 5.1Crisis Management Strategy
o 5.2Crisis Management Model
o 5.3Crisis Management Planning
o 5.4Contingency planning
o 5.5Business continuity planning
o 5.6Structural-functional systems theory
o 5.7Diffusion of innovation theory
o 5.8Role of apologies in crisis management
o 5.9Crisis leadership
o 5.10Unequal human capital theory
o 5.11Social media and crisis management
 6Examples of successful crisis management
o 6.1Tylenol (Johnson and Johnson)
o 6.2Odwalla Foods
o 6.3Mattel
o 6.4Pepsi
 7Examples of unsuccessful crisis management
o 7.1Bhopal
 o 7.2Ford and Firestone Tire and Rubber Company
o 7.3Exxon
 8Lessons learned in crisis management
o 8.1Impact of catastrophes on shareholder value
o 8.2Crisis as Opportunity
 9Public-sector crisis management
o 9.1Schools and crisis management
o 9.2Government and crisis management
o 9.3People and crisis management
o 9.4Elected officials and crisis management
 10Professional organizations
 11See also
 12References
 13Further reading
 14External links

Introduction[edit]
Crisis management is a situation-based management system that includes clear roles and
responsibilities and process related organisational requirements company-wide. The response shall
include action in the following areas: Crisis prevention, crisis assessment, crisis handling and crisis
termination. The aim of crisis management is to be well prepared for crisis, ensure a rapid and
adequate response to the crisis, maintaining clear lines of reporting and communication in the event
of crisis and agreeing rules for crisis termination.
The techniques of crisis management include a number of consequent steps from the understanding
of the influence of the crisis on the corporation to preventing, alleviating, and overcoming the
different types of crisis.[6] Crisis management consists of different aspects including:

 Methods used to respond to both the reality and perception of crisis.

 Establishing metrics to define what scenarios constitute a crisis and should consequently trigger
the necessary response mechanisms.
 Communication that occurs within the response phase of emergency-management scenarios.
Crisis-management methods of a business or an organization are called a crisis-management plan.
A British Standard BS11200:2014 provides a useful foundation for understanding terminology and
frameworks relating to crisis, in this document the focus is on the corporate exposure to risks in
particular to the black swan events that result in significant strategic threats to organisations.
Currently there is work on-going to develop an International standard.
Crisis management is occasionally referred to as incident management, although several industry
specialists such as Peter Power argue that the term "crisis management" is more accurate. [7]
A crises mindset requires the ability to think of the worst-case scenario while simultaneously
suggesting numerous solutions. Trial and error is an accepted discipline, as the first line of defense
might not work. It is necessary to maintain a list of contingency plans and to be always on alert.
Organizations and individuals should always be prepared with a rapid response plan to emergencies
which would require analysis, drills and exercises.[8]
The credibility and reputation of organizations is heavily influenced by the perception of their
responses during crisis situations. The organization and communication involved in responding to a
crisis in a timely fashion makes for a challenge in businesses. There must be open and consistent
communication throughout the hierarchy to contribute to a successful crisis-communication process.
The related terms emergency management and business continuity management focus respectively
on the prompt but short lived "first aid" type of response (e.g. putting the fire out) and the longer-term
recovery and restoration phases (e.g. moving operations to another site). Crisis is also a facet of risk
management, although it is probably untrue to say that crisis management represents a failure of
risk management, since it will never be possible to totally mitigate the chances of catastrophes'
occurring.

Types of Crisis[edit]
During the crisis management process, it is important to identify types of crises in that different
crises necessitate the use of different crisis management strategies.[9] Potential crises are enormous,
but crises can be clustered.[9]
Lerbinger[10] categorized eight types of crises

1. Natural disaster
2. Technological crisis
3. Confrontation
4. Malevolence
5. Organizational Misdeeds
6. Workplace Violence
7. Rumours
8. Terrorist attacks/man-made disasters

Information Technology and workplace[edit]

Sius Consulting[11] from Germany categorized nineteen types of prevention and protection

1. Fundamentals of occupational safety

2. Personal protective equipment (PPE) at the workplace
3. Hazard perception
4. Prevention of violence
5. Compliance
6. Economic crime
Natural disaster[edit]
Natural disaster related crises, typically natural disasters, are such environmental phenomena
as earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, landslides, tsunamis, storms,
and droughts that threaten life, property, and the environment itself.[9][10]
Example: 2004 Indian Ocean earthquake (Tsunami)
Technological crisis[edit]
Technological crises are caused by human application of science and technology. Technological
accidents inevitably occur when technology becomes complex and coupled and something goes
wrong in the system as a whole (Technological breakdowns). Some technological crises occur
when human error causes disruptions (Human breakdowns[9]). People tend to assign blame for a
technological disaster because technology is subject to human manipulation whereas they do
not hold anyone responsible for natural disaster. When an accident creates significant
environmental damage, the crisis is categorized as megadamage.[9] Samples include software
failures, industrial accidents, and oil spills.[9][10]
Examples: Chernobyl disaster, Exxon Valdez oil spill, Heartbleed security bug
Confrontation crisis[edit]
Confrontation crisis occur when discontented individuals and/or groups fight businesses,
government, and various interest groups to win acceptance of their demands and
expectations. The common type of confrontation crisis is boycotts, and other types are
picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and
resisting or disobeying police.
Example: Rainbow/PUSH’s (People United to Serve Humanity) boycott of Nike
Crisis of malevolence[edit]
An organization faces a crisis of malevolence when opponents or miscreant individuals
use criminal means or other extreme tactics for the purpose of expressing hostility or
anger toward, or seeking gain from, a company, country, or economic system, perhaps
with the aim of destabilizing or destroying it. Sample crisis include product tampering,
kidnapping, malicious rumors, terrorism, cybercrime and espionage.[9][10]
Example: 1982 Chicago Tylenol murders
Crisis of organizational misdeeds[edit]
Crises occur when management takes actions it knows will harm or place
stakeholders at risk for harm without adequate precautions.[9] Lerbinger[10] specified
three different types of crises of organizational misdeeds: crises of skewed
management values, crises of deception, and crises of management misconduct.
Crises of skewed management values[edit]
Crises of skewed management values are caused when managers favor short-term
economic gain and neglect broader social values and stakeholders other than
investors. This state of lopsided values is rooted in the classical business creed that
focuses on the interests of stockholders and tends to disregard the interests of its
other stakeholders such as customers, employees, and the community
Example:[example needed]
It has 3 stages[clarification needed] -precrisis -acute -chronic and -conflict resolution
Crisis of deception[edit]
Crisis of deception occur when management conceals or misrepresents
information about itself and its products in its dealing with consumers and
others.
Example: Dow Corning’s silicone-gel breast implant
Crisis of management misconduct[edit]
Some crises are caused not only by skewed values and deception but
deliberate amorality and illegality.
Workplace violence[edit]
Crises occur when an employee or former employee commits violence
against other employees on organizational grounds.
Example:[example needed]
Rumors[edit]
 False information about an organization or its products creates crises
hurting the organization's reputation. Sample is linking the organization
to radical groups or stories that their products are contaminated.[9]
Example: Procter & Gamble logo myth

Crisis leadership[edit]
Alan Hilburg, a pioneer in crisis management, defines
organizational crises as categorized as either acute crises or
chronic crises. Hilburg also created the concept of the Crisis Arc.
Erika Hayes James, an organizational psychologist at the
University of Virginia's Darden Graduate School of Business,
identifies two primary types of organizational crisis.[12] James
defines organizational crisis as “any emotionally charged situation
that, once it becomes public, invites negative stakeholder reaction
and thereby has the potential to threaten the financial well-being,
reputation, or survival of the firm or some portion thereof".[13]

1. Sudden crisis
2. Smoldering crises
Sudden crisis[edit]
Sudden crises are circumstances that occur without warning and
beyond an institution's control. Consequently, sudden crises are
most often situations for which the institution and its leadership are
not blamed.
Smoldering crisis[edit]
Smoldering crises differ from sudden crises in that they begin as
minor internal issues that, due to manager's negligence, develop to
crisis status. These are situations when leaders are blamed for the
crisis and its subsequent effect on the institution in question. [13]
James categorises five phases of crisis that require specific crisis
leadership competencies.[13] Each phase contains an obstacle that a
leader must overcome to improve the structure and operations of
an organization. James's case study on crisis in the financial
services sector, for example, explores why crisis events erode
public trust in leadership. James's research demonstrates how
leadership competencies of integrity, positive intent, capability,
mutual respect, and transparency impact the trust-building process.
[14]

1. Signal detection
2. Preparation and prevention
3. Containment and damage control
4. Business recovery
5. Learning
Signal detection[edit]
Signal detection is the stage in a crisis in which leaders should, but
do not always, sense early warning signals (red flags) that suggest
the possibility of a crisis. The detection stages of a crisis include:

 Sense-making: represents an attempt to create order and

make sense, retrospectively, of what occurs.
 Perspective-taking: the ability to consider another person's or
group's point of view.
Preparation and prevention[edit]
It is during this stage that crisis handlers begin preparing for or
averting the crisis that had been foreshadowed in the signal
detection stage. Hilburg has demonstrated that using an
impact/probability model allows organizations to fairly accurately
predict crisis scenarios. He's recognized the greatest organizational
challenge is 'speaking truth to power' to predict truly worst-case
scenarios. Organizations such as the Red Cross's primary mission
is to prepare for and prevent the escalation of crisis events.
Walmart has been described as an emergency-relief standard
bearer[citation needed] after having witnessed the incredibly speedy and
well-coordinated effort to get supplies to the Gulf Coast of the
United States in anticipation of Hurricane Katrina.
Containment and damage control[edit]
Usually the most vivid stage, the goal of crisis containment and
damage control is to limit the reputational, financial, safety, and
other threats to firm survival. Crisis handlers work diligently during
this stage to bring the crisis to an end as quickly as possible to limit
the negative publicity to the organization, and move into the
business recovery phase.
Business recovery[edit]
When crisis hits, organizations must be able to carry on with their
business in the midst of the crisis while simultaneously planning for
how they will recover from the damage the crisis caused. Crisis
handlers not only engage in continuity planning (determining the
people, financial, and technology resources needed to keep the
organization running), but will also actively pursue organizational
resilience.
Learning[edit]
In the wake of a crisis, organizational decision makers adopt a
learning orientation and use prior experience to develop new
routines and behaviors that ultimately change the way the
organization operates. The best leaders recognize this and are
purposeful and skillful in finding the learning opportunities inherent
in every crisis situation.
Crisis communication[edit]
The effort taken by an organization to communicate with the public
and stakeholders when an unexpected event occurs that could
have a negative impact on the organization's reputation. This can
also refer to the efforts to inform employees or the public of a
potential hazard which could have a catastrophic impact. There are
3 essential steps that an organization can take to prepare for and
withstand a communications crisis: 1) Define your philosophy; 2)
Assess your vulnerabilities; 3) Develop a protocol.[15]

Models and theories associated with crisis

management[edit]
Crisis Management Strategy[edit]
Crisis management strategy (CMS)[16] is corporate development
strategy designed primarily to prevent crisis for follow-up company
advancement. Thus, CMS is synthesis of strategic management. It
includes projection of the future based on ongoing monitoring of
business internal and external environment, as well as selection
and implementation of crisis prevention strategy and operating
management. This is including current status control based on
ongoing monitoring of the internal and external environment, as
well as crisis-coping strategy selection and implementation.
Crisis Management Model[edit]
Successfully managing a crisis requires an understanding of how to
handle a crisis – beginning with before they occur. Alan Hilburg
speaks about a crisis arc. The arc consists of crisis avoidance,
crisis mitigation and crisis recovery. Gonzalez-Herrero and Pratt
found the different phases of Crisis Management.
There are 3 phases in any Crisis Management as shown below

1. The diagnosis of the impending trouble or the danger

signals.
2. Choosing appropriate Turnaround Strategy.
3. Implementation of the change process and its monitoring
Crisis Management Planning[edit]
No corporation looks forward to facing a situation that causes a
significant disruption to their business, especially one that
stimulates extensive media coverage. Public scrutiny can result in a
negative financial, political, legal and government impact. Crisis
management planning deals with providing the best response to a
crisis.[17]
With the growing threat of cyber attacks, "traditional information
technology incident response plans often fail to consider the cross-
organizational activities that need to be performed to remain
resilient when a major cyber crisis occurs, resulting in a delayed,
chaotic, unstructured, and fragmented response. A cyber crisis
management plan is designed to reduce these risks through careful
pre-planning; therefore, developing a cyber crisis management plan
requires organizations to take a holistic approach to cyber crisis
planning. By proactively acting to build a cyber crisis management
plan, a broader, carefully considered, integrated and validated plan
can be developed to meet an organization's unique demands
before the crisis strikes."[18]
Contingency planning[edit]
Preparing contingency plans in advance, as part of a crisis-
management plan, is the first step to ensuring an organization is
appropriately prepared for a crisis. Crisis-management teams can
rehearse a crisis plan by developing a simulated scenario to use as
a drill. The plan should clearly stipulate that the only people to
speak to publicly about the crisis are the designated persons, such
as the company spokesperson or crisis team members. Ideally it
should be one spokesperson who can be available on call at any
time. Cooperation with media is crucial in crisis situation, assure
that all questions are answered on time and information on what
was done to resolve the situation is provided. The first hours after a
crisis breaks are the most crucial, so working with speed and
efficiency is important, and the plan should indicate how quickly
each function should be performed. When preparing to offer a
statement externally as well as internally, information should be
accurate and transparent. Providing incorrect or manipulated
information has a tendency to backfire and will greatly exacerbate
the situation. The contingency plan should contain information and
guidance that will help decision makers to consider not only the
short-term consequences, but the long-term effects of every
decision.[17]
Business continuity planning[edit]
When a crisis will undoubtedly cause a significant disruption to an
organization, a business continuity plan can help minimize the
disruption. First, one must identify the critical functions and
processes that are necessary to keep the organization running.
[19]
This part of the planning should be conducted in the earliest
stages, and is part of a business impact analysis phase that will
signpost “How much does the organization stand to lose?”
(Osborne, A. (2007). Practical Business Continuity Management.
Business Management: Top tips for effective, real-world Business
Continuity Management).
Each critical function and or/process must have its own
contingency plan in the event that one of the functions/processes
ceases or fails, then the business/organization is more resilient,
which in itself provides a mechanism to lessen the possibility of
having to invoke recovery plans (Osborne, 2007). Testing these
contingency plans by rehearsing the required actions in a
simulation will allow those involved to become more acutely aware
of the possibility of a crisis. As a result, and in the event of an
actual crisis, the team members will act more quickly and
effectively.[17]
A note of caution when planning training scenarios, all too often
simulations can lack ingenuity, an appropriate level of realism and
as a consequence potentially lose their training value. This part can
be improved by employing external exercise designers who are not
part of the organisational culture and are able to test an
organizations response to crisis, in order to bring about a crisis of
confidence for those who manage vital systems.[20]
Following a simulation exercise, a thorough and systematic
debriefing must be conducted as a key component of any crisis
simulation. The purpose of this is to create a link and draw lessons
from the reality of the simulated representation and the reality of
the real world.[21]
The whole process relating to business continuity planning should
be periodically reviewed to identify any number of changes that
may invalidate the current plan.[22]
Structural-functional systems theory[edit]
Providing information to an organization in a time of crisis is critical
to effective crisis management. Structural-functional systems
theory addresses the intricacies of information networks and levels
of command making up organizational communication. The
structural-functional theory identifies information flow in
organizations as "networks" made up of members ". Information in
organizations flow in patterns called networks.[23]
Diffusion of innovation theory[edit]
Another theory that can be applied to the sharing of information is
Diffusion of Innovation Theory. Developed by Everett Rogers, the
theory describes how innovation is disseminated and
communicated through certain channels over a period of time.
Diffusion of innovation in communication occurs when an individual
communicates a new idea to one or several others. At its most
elementary form, the process involves: (1) an innovation, (2) an
individual or other unit of adoption that has knowledge of or
experience with using the innovation, (3) another individual or other
unit that does not yet have knowledge of the innovation, and (4) a
communication channel connecting the two units. A communication
channel is the means by which messages get from one individual to
another.
Role of apologies in crisis management[edit]
There has been debate about the role of apologies in crisis
management, and some argue that apology opens an organization
up for possible legal consequences. "However some evidence
indicates that compensation and sympathy, two less expensive
strategies, are as effective as an apology in shaping people’s
perceptions of the organization taking responsibility for the crisis
because these strategies focus on the victims’ needs. The
sympathy response expresses concern for victims while
compensation offers victims something to offset the suffering."[24]
Crisis leadership[edit]
James identifies five leadership competencies which facilitate
organizational restructuring during and after a crisis.

1. Building an environment of trust

 2. Reforming the organization's mindset
3. Identifying obvious and obscure vulnerabilities of the
organization
4. Making wise and rapid decisions as well as taking
courageous action
5. Learning from crisis to effect change.
Crisis leadership research concludes that leadership action in crisis
reflects the competency of an organization, because the test of
crisis demonstrates how well the institution's leadership structure
serves the organization's goals and withstands crisis. [13] Developing
effective human resources is vital when building organizational
capabilities through crisis management executive leadership.[25]
Unequal human capital theory[edit]
James postulates that organizational crisis can result from
discrimination lawsuits. [26] James's theory of unequal human capital
and social position derives from economic theories of human and
social capital concluding that minority employees receive fewer
organizational rewards than those with access to executive
management. In a recent study of managers in a Fortune 500
company, race was found to be a predictor of promotion
opportunity or lack thereof.[27] Thus, discrimination lawsuits can
invite negative stakeholder reaction, damage the company's
reputation, and threaten corporate survival.
Social media and crisis management[edit]
Social media has accelerated the speed that information about a
crisis can spread. The viral effect of social networks such as Twitter
means that stakeholders can break news faster than traditional
media - making managing a crisis harder.[28] This can be mitigated
by having the right training and policy in place as well as the right
social media monitoring tools to detect signs of a crisis breaking.
[29]
Social media also gives crisis management teams access to
real-time information about how a crisis is impacting stakeholder
sentiment and the issues that are of most concern to them.
The crisis management mantra of Lanny Davis, former counsellor
to Bill Clinton is to “Tell it Early, Tell it All, Tell it Yourself”. A
strategy employed at the Clinton White House 1996 – 1998, to any
breaking [30]
Organisations should have a planned approach to releasing
information to the media in the event of a crisis. A media reaction
plan should include a company media representative as part of the
Crisis Management Team (CMT). Since there is always a degree of
unpredictability during a crisis, it is best that all CMT members
understand how to deal with the media and be prepared to do so,
should they be thrust into such a situation.[31]
In 2010 Procter & Gamble Co called reports that its new Pampers
with Dry Max caused rashes and other skin irritations "completely
false" as it aimed to contain a public relations threat to its biggest
diaper innovation in 25 years. A Facebook group called "Pampers
bring back the OLD CRUISERS/SWADDLERS" rose to over 4,500
members. Pampers denied the allegation and stated that only two
complaints had been received for every one million diapers sold.
[32]
Pampers quickly reached out to people expressing their
concerns via social media, Pampers even held a summit with four
influential “mommy bloggers,” to help dispel the rumour. Pampers
acted quickly and decisively to an emerging crisis, before
competitors and critics alike could fuel the fire further.

Examples of successful crisis

management[edit]
Tylenol (Johnson and Johnson)[edit]
In the fall of 1982, a murderer added 65 milligrams of cyanide to
some Tylenol capsules on store shelves, killing seven people,
including three in one family. Johnson & Johnson recalled and
destroyed 31 million capsules at a cost of $100 million. The affable
CEO, James Burke, appeared in television ads and at news
conferences informing consumers of the company's actions.
Tamper-resistant packaging was rapidly introduced, and Tylenol
sales swiftly bounced back to near pre-crisis levels.[33]
When another bottle of tainted Tylenol was discovered in a store, it
took only a matter of minutes for the manufacturer to issue a
nationwide warning that people should not use the medication in its
capsule form.[34]
Odwalla Foods[edit]
When Odwalla's apple juice was thought to be the cause of an
outbreak of E. coli infection, the company lost a third of its market
value. In October 1996, an outbreak of E. coli bacteria in
Washington state, California, Colorado and British Columbia was
traced to unpasteurized apple juice manufactured by natural juice
maker Odwalla Inc. Forty-nine cases were reported, including the
death of a small child. Within 24 hours, Odwalla conferred with the
FDA and Washington state health officials; established a schedule
of daily press briefings; sent out press releases which announced
the recall; expressed remorse, concern and apology, and took
responsibility for anyone harmed by their products; detailed
symptoms of E. coli poisoning; and explained what consumers
should do with any affected products. Odwalla then developed -
through the help of consultants - effective thermal processes that
would not harm the products' flavors when production resumed. All
of these steps were communicated through close relations with the
media and through full-page newspaper ads.
Mattel[edit]
Mattel Inc., the toy maker, has been plagued with more than 28
product recalls and in the summer of 2007, among problems with
exports from China, faced two product recalls in two weeks. The
company "did everything it could to get its message out, earning
high marks from consumers and retailers. Though upset by the
situation, they were appreciative of the company's response. At
Mattel, just after the 7 a.m. recall announcement by federal
officials, a public relations staff of 16 was set to call reporters at the
40 biggest media outlets. They told each to check their e-mail for a
news release outlining the recalls, invited them to a teleconference
call with executives and scheduled TV appearances or phone
conversations with Mattel's chief executive. The Mattel CEO Robert
Eckert did 14 TV interviews on a Tuesday in August and about 20
calls with individual reporters. By the week's end, Mattel had
responded to more than 300 media inquiries in the U.S. alone."[35]
Pepsi[edit]
The Pepsi Corporation faced a crisis in 1993 which started with
claims of syringes being found in cans of diet Pepsi. Pepsi urged
stores not to remove the product from shelves while it had the cans
and the situation investigated. This led to an arrest, which Pepsi
made public and then followed with their first video news release,
showing the production process to demonstrate that such
tampering was impossible within their factories. A second video
news release displayed the man arrested. A third video showed
surveillance from a convenience store where a woman was caught
inserting a syringe into a can.[36] The company simultaneously
publicly worked with the FDA during the crisis. This made public
communications effective throughout the crisis. After the crisis had
been resolved, the corporation ran a series of special campaigns
designed to thank the public for standing by the corporation, along
with coupons for further compensation. This case served as a
design for how to handle other crisis situations.[37]

Examples of unsuccessful crisis

management[edit]
Bhopal[edit]
The Bhopal disaster in which poor communication before, during,
and after the crisis cost thousands of lives, illustrates the
importance of incorporating cross-cultural communication in crisis
management plans. According to American University's Trade
Environmental Database Case Studies (1997), local residents were
not sure how to react to warnings of potential threats from the
Union Carbide plant. Operating manuals printed only in English is
an extreme example of mismanagement but indicative of systemic
barriers to information diffusion. According to Union Carbide's own
chronology of the incident (2006), a day after the crisis Union
Carbide's upper management arrived in India but was unable to
assist in the relief efforts because they were placed under house
arrest by the Indian government. Symbolic intervention can be
counter productive; a crisis management strategy can help upper
management make more calculated decisions in how they should
respond to disaster scenarios. The Bhopal incident illustrates the
difficulty in consistently applying management standards to multi-
national operations and the blame shifting that often results from
the lack of a clear management plan.[38]
Ford and Firestone Tire and Rubber Company[edit]
Main article: Firestone and Ford tire controversy
The Ford-Firestone Tire and Rubber Company dispute transpired in
August 2000. In response to claims that their 15-inch Wilderness
AT, radial ATX and ATX II tire treads were separating from the tire
core—leading to crashes—Bridgestone/Firestone recalled 6.5
million tires. These tires were mostly used on the Ford Explorer, the
world's top-selling sport utility vehicle (SUV).[39]
The two companies committed three major blunders early on, say
crisis experts. First, they blamed consumers for not inflating their
tires properly. Then they blamed each other for faulty tires and
faulty vehicle design. Then they said very little about what they
were doing to solve a problem that had caused more than 100
deaths—until they got called to Washington to testify before
Congress.[40]
Exxon[edit]
On 24 March 1989, a tanker belonging to the Exxon Corporation
ran aground in the Prince William Sound in Alaska. The Exxon
Valdez spilled millions of gallons of crude oil into the waters off
Valdez, killing thousands of fish, fowl, and sea otters. Hundreds of
miles of coastline were polluted and salmon spawning runs
disrupted; numerous fishermen, especially Native Americans, lost
their livelihoods. Exxon, by contrast, did not react quickly in terms
of dealing with the media and the public; the CEO, Lawrence Rawl,
did not become an active part of the public relations effort and
actually shunned public involvement; the company had neither a
communication plan nor a communication team in place to handle
the event—in fact, the company did not appoint a public relations
manager to its management team until 1993, 4 years after the
incident; Exxon established its media center in Valdez, a location
too small and too remote to handle the onslaught of media
attention; and the company acted defensively in its response to its
publics, even laying blame, at times, on other groups such as the
Coast Guard. These responses also happened within days of the
incident.[41]

Lessons learned in crisis management[edit]

Impact of catastrophes on shareholder value[edit]
One of the foremost recognized studies conducted on the impact of
a catastrophe on the stock value of an organization was completed
by Dr Rory Knight and Dr Deborah Pretty (1996, Templeton
College, University of Oxford - commissioned by the Sedgewick
Group). This study undertook a detailed analysis of the stock price
(post impact) of organizations that had experienced catastrophes.
The study identified organizations that recovered and even
exceeded pre-catastrophe stock price, (Recoverers), and those that
did not recover on stock price, (Non-recoverers). The average
cumulative impact on shareholder value for the recoverers was 5%
plus on their original stock value. So the net impact on shareholder
value by this stage was actually positive. The non-recoverers
remained more or less unchanged between days 5 and 50 after the
catastrophe, but suffered a net negative cumulative impact of
almost 15% on their stock price up to one year afterwards.
One of the key conclusions of this study is that "Effective
management of the consequences of catastrophes would appear to
be a more significant factor than whether catastrophe insurance
hedges the economic impact of the catastrophe".
While there are technical elements to this report it is highly
recommended to those who wish to engage their senior
management in the value of crisis management.[42]
Crisis as Opportunity[edit]
Hilburg proffers that every crisis is an opportunity to showcase an
institution's character, its commitment to its brand promise and its
institutional values. To address such shareholder impact,
management must move from a mindset that manages crisis to one
that generates crisis leadership. [12] Research shows that
organizational contributory factors affect the tendency of executives
to adopt an effective "crisis as opportunity" mindset.[43] Since
pressure is both a precipitator and consequence of crisis, leaders
who perform well under pressure can effectively guide the
organization through such crisis. [44]
James contends that most executives focus on communications
and public relations as a reactive strategy. While the company's
reputation with shareholders, financial well-being, and survival are
all at stake, potential damage to reputation can result from the
actual management of the crisis issue.[12] Additionally, companies
may stagnate as their risk management group identifies whether a
crisis is sufficiently “statistically significant”. [45] Crisis leadership, on
the other hand, immediately addresses both the damage and
implications for the company's present and future conditions, as
well as opportunities for improvement. [13]

Public-sector crisis management[edit]

Corporate America is not the only community that is vulnerable to
the perils of a crisis. Whether a school shooting, a public health
crisis or a terrorist attack that leaves the public seeking comfort in
the calm, steady leadership of an elected official, no sector of
society is immune to crisis. In response to that reality, crisis
management policies, strategies and practices have been
developed and adapted across multiple disciplines.
Schools and crisis management[edit]
In the wake of the Columbine High School Massacre,
the September 11 attacks in 2001, and shootings on college
campuses including the Virginia Tech massacre, educational
institutions at all levels are now focused on crisis management.[46]
A national study conducted by the University of Arkansas for
Medical Sciences (UAMS) and Arkansas Children's Hospital
Research Institute (ACHRI) has shown that many public school
districts have important deficiencies in their emergency and
disaster plans (The School Violence Resource Center, 2003). In
response the Resource Center has organized a comprehensive set
of resources to aid schools is the development of crisis
management plans.[citation needed]
Crisis-management plans cover a wide variety of incidents
including bomb threats, child abuse, natural disasters, suicide, drug
abuse and gang activities – just to list a few.[47] In a similar fashion
the plans aim to address all audiences in need of information
including parents, the media and law enforcement officials.[48]
Government and crisis management[edit]
Historically, government at all levels—local, state, and national—
has played a large role in crisis management. Indeed, many
political philosophers have considered this to be one of the primary
roles of government. Emergency services, such as fire and police
departments at the local level, and the United States National
Guard at the federal level, often play integral roles in crisis
situations.
To help coordinate communication during the response phase of a
crisis, the U.S. Federal Emergency Management Agency (FEMA)
within the Department of Homeland Security administers
the National Response Plan (NRP). This plan is intended to
integrate public and private response by providing a common
language and outlining a chain-of-command when multiple parties
are mobilized. It is based on the premise that incidences should be
handled at the lowest organizational level possible. The NRP
recognizes the private sector as a key partner in domestic incident
management, particularly in the area of critical infrastructure
protection and restoration.[49]
The NRP is a companion to the National Incidence Management
System, which acts as a more general template for incident
management regardless of cause, size, or complexity.[49]
FEMA offers free web-based training on the National Response
Plan through the Emergency Management Institute.[50]
Common Alerting Protocol (CAP) is a relatively recent mechanism
that facilitates crisis communication across different mediums and
systems. CAP helps create a consistent emergency alert format to
reach geographically and linguistically diverse audiences through
both audio and visual mediums.[citation needed]
People and crisis management[edit]
A group of international psychoanalysts started in 1994 with a
project to contribute to crisis management in the sense of
managing conflicts between national groups. They called
themselves Partners in confronting collective atrocities.[51] They
began their work with the so-called Nazareth-Conferences – based
on the model of Leicesterconferences having been developed by
the Tavistock Institute.
Elected officials and crisis management[edit]
Historically, politics and crisis go hand in hand. In describing crisis,
President Abraham Lincoln said, “We live in the midst of alarms,
anxiety beclouds the future; we expect some new disaster with
each newspaper we read.”[citation needed]
Crisis management has become a defining feature of contemporary
governance. In times of crisis, communities and members of
organizations expect their public leaders to minimize the impact of
the crisis at hand, while critics and bureaucratic competitors try to
seize the moment to blame incumbent rulers and their policies. In
this extreme environment, policymakers must somehow establish a
sense of normality, and foster collective learning from the crisis
experience.[52]
In the face of crisis, leaders must deal with the strategic challenges
they face, the political risks and opportunities they encounter, the
errors they make, the pitfalls they need to avoid, and the paths
away from crisis they may pursue. The necessity for management
is even more significant with the advent of a 24-hour news
cycle and an increasingly internet-savvy audience with ever-
changing technology at its fingertips.[52]
Public leaders have a special responsibility to help safeguard
society from the adverse consequences of crisis. Experts in crisis
management note that leaders who take this responsibility
seriously would have to concern themselves with all crisis phases:
the incubation stage, the onset, and the aftermath. Crisis
leadership then involves five critical tasks: sense making, decision
making, meaning making, terminating, and learning.[52]
A brief description of the five facets of crisis leadership includes:[53]

1. Sense making may be considered as the classical situation

assessment step in decision making.
2. Decision making is both the act of coming to a decision as
the implementation of that decision.
3. Meaning making refers to crisis management as political
communication.
4. Terminating a crisis is only possible if the public leader
correctly handles the accountability question.
5. Learning, refers to the actual learning from a crisis is
limited. The authors note, a crisis often opens a window of
opportunity for reform for better or for worse.

Professional organizations[edit]
There are a number of professional industry associations that
provide advice, literature and contacts to turnaround professionals
and academics. Some are:
1. International Association of Emergency Managers (International)
2. Turnaround Management Society (International / Focus on
Europe)
3. Institute for Turnaround (England)
4. Turnaround Management Association (International)
5. Institut für die Standardisierung von Unternehmenssanierungen
(Germany)
6. Disaster Recovery Institute (International)

See also[edit]
 Business continuity
 Common Alerting Protocol
 Contingency plan
 Crisis
 Cross-cultural communication
 Emergency services
 Emergency management
 Federal Emergency Management Agency
 ISO/TC 223 Societal Security
 Management
 Management by exception
 Risk Management
 Social Responsibility

References[edit]
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CRISIS MANAGEMENT AND

COMMUNICATIONS
Posted on October 30, 2007by Institute for PR

INTRODUCTION
Crisis management is a critical organizational function. Failure can result in
serious harm to stakeholders, losses for an organization, or end its very
existence. Public relations practitioners are an integral part of crisis
management teams. So a set of best practices and lessons gleaned from our
knowledge of crisis management would be a very useful resource for those in
public relations. Volumes have been written about crisis management by both
practitioners and researchers from many different disciplines making it a
challenge to synthesize what we know about crisis management and public
relations’ place in that knowledge base. The best place to start this effort is by
defining critical concepts

DEFINITIONS
There are plenty of definitions for a crisis. For this entry, the definition reflects
key points found in the various discussions of what constitutes a crisis. A crisis
is defined here as a significant threat to operations that can have negative
consequences if not handled properly. In crisis management, the threat is the
potential damage a crisis can inflict on an organization, its stakeholders, and an
industry. A crisis can create three related threats: (1) public safety, (2)
financial loss, and (3) reputation loss. Some crises, such as industrial accidents
and product harm, can result in injuries and even loss of lives. Crises can
create financial loss by disrupting operations, creating a loss of market
share/purchase intentions, or spawning lawsuits related to the crisis. As
Dilenschneider (2000) noted in The Corporate Communications Bible, all crises
threaten to tarnish an organization’s reputation. A crisis reflects poorly on an
organization and will damage a reputation to some degree. Clearly these three
threats are interrelated. Injuries or deaths will result in financial and reputation
loss while reputations have a financial impact on organizations.

Effective crisis management handles the threats sequentially. The primary

concern in a crisis has to be public safety. A failure to address public safety
intensifies the damage from a crisis. Reputation and financial concerns are
considered after public safety has been remedied. Ultimately, crisis
management is designed to protect an organization and its stakeholders from
threats and/or reduce the impact felt by threats.

Crisis management is a process designed to prevent or lessen the damage a

crisis can inflict on an organization and its stakeholders. As a process, crisis
management is not just one thing. Crisis management can be divided into three
phases: (1) pre-crisis, (2) crisis response, and (3) post-crisis. The pre-crisis
phase is concerned with prevention and preparation. The crisis response phase
is when management must actually respond to a crisis. The post-crisis phase
looks for ways to better prepare for the next crisis and fulfills commitments
made during the crisis phase including follow-up information. The tri-part view
of crisis management serves as the organizing framework for this entry.

PRE-CRISIS PHASE
Prevention involves seeking to reduce known risks that could lead to a crisis.
This is part of an organization’s risk management program. Preparation involves
creating the crisis management plan, selecting and training the crisis
management team, and conducting exercises to test the crisis management plan
and crisis management team. Both Barton (2001) and Coombs (2006) document
that organizations are better able to handle crises when they (1) have a crisis
management plan that is updated at least annually, (2) have a designated crisis
management team, (3) conduct exercises to test the plans and teams at least
annually, and (4) pre-draft some crisis messages. Table 1 lists the Crisis
Preparation Best Practices. The planning and preparation allow crisis teams to
react faster and to make more effective decisions. Refer to Barton’s (2001)
Crisis in Organizations II or Coombs’ (2006) Code Red in the Boardroom for more
information on these four lessons.

Table 1: Crisis Preparation Best Practices

1. Have a crisis management plan and update it at least annually.
2. Have a designate crisis management team that is properly trained.
3. Conduct exercise at least annually to test the crisis management plan and team.
4. Pre-draft select crisis management messages including content for dark web sites and
templates for crisis statements. Have the legal department review and pre-approve these
messages.
CRISIS MANAGEMENT PLAN
A crisis management plan (CMP) is a reference tool, not a blueprint. A CMP
provides lists of key contact information, reminders of what typically should be
done in a crisis, and forms to be used to document the crisis response. A CMP
is not a step-by-step guide to how to manage a crisis. Barton (2001), Coombs
(2007a), and Fearn-Banks (2001) have noted how a CMP saves time during a
crisis by pre-assigning some tasks, pre-collecting some information, and serving
as a reference source. Pre-assigning tasks presumes there is a designated
crisis team. The team members should know what tasks and responsibilities
they have during a crisis.

CRISIS MANAGEMENT TEAM

Barton (2001) identifies the common members of the crisis team as public
relations, legal, security, operations, finance, and human resources. However,
the composition will vary based on the nature of the crisis. For instance,
information technology would be required if the crisis involved the computer
system. Time is saved because the team has already decided on who will do
the basic tasks required in a crisis. Augustine (1995) notes that plans and
teams are of little value if they are never tested. Management does not know if
or how well an untested crisis management plan with work or if the crisis team
can perform to expectations. Mitroff, Harrington, and Gia (1996) emphasize that
training is needed so that team members can practice making decisions in a
crisis situation. As noted earlier, a CMP serves only as a rough guide. Each
crisis is unique demanding that crisis teams make decisions. Coombs (2007a)
summaries the research and shows how practice improves a crisis team’s
decision making and related task performance. For additional information on
the value of teams and exercises refer to Coombs (2006) and the Corporate
Leadership Council’s (2003) report on crisis management strategies.

SPOKESPERSON
A key component of crisis team training is spokesperson training.
Organizational members must be prepared to talk to the news media during a
crisis. Lerbinger (1997), Feran-Banks (2001), and Coombs (2007a) devote
considerable attention to media relations in a crisis. Media training should be
provided before a crisis hits. The Crisis Media Training Best Practices in Table
2 were drawn from these three books:

Table 2: Crisis Media Training Best Practices

1. Avoid the phrase “no comment” because people think it means the organization is guilty and
trying to hide something
2. Present information clearly by avoiding jargon or technical terms. Lack of clarity makes
people think the organization is purposefully being confusing in order to hide something.
3. Appear pleasant on camera by avoiding nervous habits that people interpret as deception. A
spokesperson needs to have strong eye contact,limited disfluencies such as “uhms” or “uhs”, and
avoid distracting nervous gestures such as fidgeting or pacing. Coombs (2007a) reports on
research that documents how people will be perceived as deceptive if they lack eye contact, have
a lot of disfluencies,or display obvious nervous gestures.
4. Brief all potential spokespersons on the latest crisis information and the key message points
the organization is trying to convey to stakeholders.
Public relations can play a critical role in preparing spokespersons for handling
questions from the news media. The media relations element of public relations
is a highly valued skill in crisis management. The public relations personnel can
provide training and support because in most cases they are not the
spokesperson during the crisis.

PRE-DRAFT MESSAGES
Finally, crisis managers can pre-draft messages that will be used during a
crisis. More accurately, crisis managers create templates for crisis messages.
Templates include statements by top management, news releases, and dark web
sites. Both the Corporate Leadership Council (2003) and the Business
Roundtable (2002) strongly recommend the use of templates. The templates
leave blank spots where key information is inserted once it is known. Public
relations personnel can help to draft these messages. The legal department can
then pre-approve the use of the messages. Time is saved during a crisis as
specific information is simply inserted and messages sent and/or made available
on a web site.

COMMUNICATION CHANNELS
An organization may create a separate web site for the crisis or designate a
section of its current web site for the crisis. Taylor and Kent’s (2007) research
finds that having a crisis web sites is a best practice for using an Internet during
a crisis. The site should be designed prior to the crisis. This requires the crisis
team to anticipate the types of crises an organization will face and the types of
information needed for the web site. For instances, any organization that makes
consumer goods is likely to have a product harm crisis that will require a recall.
The Corporate Leadership Council (2003) highlights the value of a crisis web site
designed to help people identify if their product is part of the recall and how the
recall will be handled. Stakeholders, including the news media, will turn to the
Internet during a crisis. Crisis managers should utilize some form of web-based
response or risk appearing to be ineffective. A good example is Taco Bell’s E.
coli outbreak in 2006. The company was criticized in the media for being slow
to place crisis-related information on its web site.

Of course not placing information on the web site can be strategic. An

organization may not want to publicize the crisis by placing information about it
on the web site. This assumes the crisis is very small and that stakeholders are
unlikely to hear about it from another source. In today’s traditional and online
media environment, that is a misguided if not dangerous assumption. Taylor
and Kent (2007) and the Corporate Leadership Council emphasize that a web site
is another means for an organization to present its side of the story and not
using it creates a risk of losing how the crisis story is told. Refer to the PR News
story “Lackluster Online PR No Aid in Crisis Response” (2002) for additional
information about using dark web sites in a crisis,

Intranet sites can also be used during a crisis. Intranet sites limit access,
typically to employees only though some will include suppliers and customers.
Intranet sites provide direct access to specific stakeholders so long as those
stakeholders have access to the Intranet. Dowling’s (2003) research documents
the value of American Airlines’ use of its Intranet system as an effective way to
communicate with its employees following the 9/11 tragedy. Coombs (2007a)
notes that the communication value of an Intranet site is increased when used in
conjunction with mass notification systems designed to reach employees and
other key stakeholders. With a mass notification system, contact information
(phones numbers, e-mail, etc.) are programmed in prior to a crisis. Contacts can
be any group that can be affected by the crisis including employees, customers,
and community members living near a facility. Crisis managers can enter short
messages into the system then tell the mass notification system who should
receive which messages and which channel or channels to use for the delivery.
The mass notification system provides a mechanism for people to respond to
messages as well. The response feature is critical when crisis managers want
to verify that the target has received the message. Table 3 summarizes the
Crisis Communication Channel Preparation Best Practices.

Table 3: Crisis Communication Channel Preparation Best Practices

1. Be prepared to use a unique web site or part of your current web site to address crisis
concerns.
2. Be prepared to use the Intranet as one of the channels for reaching employees and any other
stakeholders than may have access to your Intranet.
3. Be prepared to utilize a mass notification system for reaching employees and other key
stakeholders during a crisis

CRISIS RESPONSE
The crisis response is what management does and says after the crisis hits.
Public relations plays a critical role in the crisis response by helping to develop
the messages that are sent to various publics. A great deal of research has
examined the crisis response. That research has been divided into two
sections: (1) the initial crisis response and (2) reputation repair and behavioral
intentions.

INITIAL RESPONSE
Practitioner experience and academic research have combined to create a clear
set of guidelines for how to respond once a crisis hits. The initial crisis
response guidelines focus on three points: (1) be quick, (2) be accurate, and (3)
be consistent.

Be quick seems rather simple, provide a response in the first hour after the crisis
occurs. That puts a great deal of pressure on crisis managers to have a
message ready in a short period of time. Again, we can appreciate the value of
preparation and templates. The rationale behind being quick is the need for the
organization to tell its side of the story. In reality, the organization’s side of the
story are the key points management wants to convey about the crisis to its
stakeholders. When a crisis occurs, people want to know what happened.
Crisis experts often talk of an information vacuum being created by a crisis.
The news media will lead the charge to fill the information vacuum and be a key
source of initial crisis information. (We will consider shortly the use of the
Internet as well). If the organization having the crisis does not speak to the
news media, other people will be happy to talk to the media. These people may
have inaccurate information or may try to use the crisis as an opportunity to
attack the organization. As a result, crisis managers must have a quick
response. An early response may not have much “new” information but the
organization positions itself as a source and begins to present its side of the
story. Carney and Jorden (1993) note a quick response is active and shows an
organization is in control. Hearit’s (1994) research illustrates how silence is too
passive. It lets others control the story and suggests the organization has yet
to gain control of the situation. Arpan and Rosko-Ewoldsen (2005) conducted a
study that documented how a quick, early response allows an organization to
generate greater credibility than a slow response. Crisis preparation will make
it easier for crisis managers to respond quickly.

Obviously accuracy is important anytime an organization communicates with

publics. People want accurate information about what happened and how that
event might affect them. Because of the time pressure in a crisis, there is a risk
of inaccurate information. If mistakes are made, they must be corrected.
However, inaccuracies make an organization look inconsistent. Incorrect
statements must be corrected making an organization appear to be
incompetent. The philosophy of speaking with one voice in a crisis is a way to
maintain accuracy.

Speaking with one voice does not mean only one person speaks for the
organization for the duration of the crisis. As Barton (2001) notes, it is
physically impossible to expect one person to speak for an organization if a
crisis lasts for over a day. Watch news coverage of a crisis and you most likely
will see multiple people speak. The news media want to ask questions of
experts so they may need to talk to a person in operations or one from security.
That is why Coombs (2007a) emphasizes the public relations department plays
more of a support role rather than being “the” crisis spokespersons. The crisis
team needs to share information so that different people can still convey a
consistent message. The spokespersons should be briefed on the same
information and the key points the organization is trying to convey in the
messages. The public relations department should be instrumental in preparing
the spokespersons. Ideally, potential spokespersons are trained and practice
media relations skills prior to any crisis. The focus during a crisis then should
be on the key information to be delivered rather than how to handle the media.
Once more preparation helps by making sure the various spokespersons have
the proper media relations training and skills.

Quickness and accuracy play an important role in public safety. When public
safety is a concern, people need to know what they must do to protect
themselves. Sturges (1994) refer to this information as instructing information.
Instructing information must be quick and accurate to be useful. For instance,
people must know as soon as possible not to eat contaminated foods or to
shelter-in-place during a chemical release. A slow or inaccurate response can
increase the risk of injuries and possibly deaths. Quick actions can also save
money by preventing further damage and protecting reputations by showing that
the organization is in control. However, speed is meaningless if the information
is wrong. Inaccurate information can increase rather than decrease the threat
to public safety.

The news media are drawn to crises and are a useful way to reach a wide array
of publics quickly. So it is logical that crisis response research has devoted
considerable attention to media relations. Media relations allows crisis
managers to reach a wide range of stakeholders fast. Fast and wide ranging is
perfect for public safety—get the message out quickly and to as many people as
possible. Clearly there is waste as non-targets receive the message but speed
and reach are more important at the initial stage of the crisis. However, the
news media is not the only channel crisis managers can and should use to reach
stakeholders.

Web sites, Intranet sites, and mass notification systems add to the news media
coverage and help to provide a quick response. Crisis managers can supply
greater amounts of their own information on a web site. Not all targets will use
the web site but enough do to justify the inclusion of web-base communication in
a crisis response. Taylor and Kent’s (2007) extensive analysis of crisis web
sites over a multiyear period found a slow progression in organizations utilizing
web sites and the interactive nature of the web during a crisis. Mass
notification systems deliver short messages to specific individuals through a mix
of phone, text messaging, voice messages, and e-mail. The systems also allow
people to send responses. In organizations with effective Intranet systems, the
Intranet is a useful vehicle for reaching employees as well. If an organization
integrates its Intranet with suppliers and customers, these stakeholders can be
reached as well. As the crisis management effort progresses, the channels can
be more selective.
More recently, crisis experts have recommended a third component to an initial
crisis response, crisis managers should express concern/sympathy for any
victims of the crisis. Victims are the people that are hurt or inconvenienced in
some way by the crisis. Victims might have lost money, become ill, had to
evacuate, or suffered property damage. Kellerman (2006) details when it is
appropriate to express regret. Expressions of concern help to lessen
reputational damage and to reduce financial losses. Experimental studies by
Coombs and Holladay (1996) and by Dean (2004) found that organizations did
experience less reputational damage when an expression of concern is offered
verses a response lacking an expression of concern. Cohen (1999) examined
legal cases and found early expressions of concern help to reduce the number
and amount of claims made against an organization for the crisis. However,
Tyler (1997) reminds us that there are limits to expressions of concern.
Lawyers may try to use expressions of concern as admissions of guilt. A
number of states have laws that protect expressions of concern from being used
against an organization. Another concern is that as more crisis managers
express concern, the expressions of concern may lose their effect of people.
Hearit (2007) cautions that expressions of concern will seem too routine. Still,
a failure to provide a routine response could hurt an organization. Hence,
expressions of concern may be expected and provide little benefit when used
but can inflict damage when not used.

Argenti (2002) interviewed a number of managers that survived the 9/11

attacks. His strongest lesson was that crisis managers should never forget
employees are important publics during a crisis. The Business Roundtable
(2002) and Corporate Leadership Council (2003) remind us that employees need
to know what happened, what they should do, and how the crisis will affect
them. The earlier discussions of mass notification systems and the Intranet are
examples of how to reach employees with information. West Pharmaceuticals
had a production facility in Kinston, North Carolina leveled by an explosion in
January 2003. Coombs (2004b) examined how West Pharmaceuticals used a
mix of channels to keep employees apprised of how the plant explosion would
affect them in terms of when they would work, where they would work, and their
benefits. Moreover, Coombs (2007a) identifies research that suggest well
informed employees provide an additional channel of communication for
reaching other stakeholders.

When the crisis results in serious injuries or deaths, crisis management must
include stress and trauma counseling for employees and other victims. One
illustration is the trauma teams dispatched by airlines following a plane crash.
The trauma teams address the needs of employees as well as victims’ families.
Both the Business Roundtable (2002) and Coombs (2007a) note that crisis
managers must consider how the crisis stress might affect the employees,
victims, and their families. Organizations must provide the necessary resources
to help these groups cope.

We can take a specific set of both form and content lessons from the writing on
the initial crisis response. Table 4 provides a summary of the Initial Crisis
Response Best Practices. Form refers to the basic structure of the response.
The initial crisis response should be delivered in the first hour after a crisis and
be vetted for accuracy. Content refers to what is covered in the initial crisis
response. The initial message must provide any information needed to aid
public safety, provide basic information about what has happened, and offer
concern if there are victims. In addition, crisis managers must work to have a
consistent message between spokespersons.

Table 4: Initial Crisis Response Best Practices

1. Be quick and try to have initial response within the first hour.
2. Be accurate by carefully checking all facts.
3. Be consistent by keeping spokespeople informed of crisis events and key message points.
4. Make public safety the number one priority.
5. Use all of the available communication channels including the Internet, Intranet, and mass
notification systems.
6. Provide some expression of concern/sympathy for victims
7. Remember to include employees in the initial response.
8. Be ready to provide stress and trauma counseling to victims of the crisis and their families,
including employees.
REPUTATION REPAIR AND BEHAVIORAL INTENTIONS
A number of researchers in public relations, communication, and marketing have
shed light on how to repair the reputational damage a crisis inflicts on an
organization. At the center of this research is a list of reputation repair
strategies. Bill Benoit (1995; 1997) has done the most to identify the reputation
repair strategies. He analyzed and synthesized strategies from many different
research traditions that shared a concern for reputation repair. Coombs (2007a)
integrated the work of Benoit with others to create a master list that integrated
various writings into one list. Table 5 presents the Master List of Reputation
Repair Strategies. The reputation repair strategies vary in terms of how much
they accommodate victims of this crisis (those at risk or harmed by the crisis).
Accommodate means that the response focuses more on helping the victims
than on addressing organizational concerns. The master list arranges the
reputation repair strategies from the least to the most accommodative
reputation repair strategies. (For more information on reputation repair
strategies see also Ulmer, Sellnow, and Seeger, 2006).
Table 5: Master List of Reputation Repair Strategies
1.Attack the accuser: crisis manager confronts the person or group claiming something is wrong
with the organization.
2.Denial: crisis manager asserts that there is no crisis.
3. Scapegoat: crisis manager blames some person or group outside of the organization for the
crisis.
4. Excuse: crisis manager minimizes organizational responsibility by denying intent to do harm
and/or claiming inability to control the events that triggered the crisis.
Provocation: crisis was a result of response to some one else’s actions.
Defeasibility: lack of information about events leading to the crisis situation.
Accidental: lack of control over events leading to the crisis situation.
Good intentions: organization meant to do well
5. Justification: crisis manager minimizes the perceived damage caused by the crisis.
6. Reminder: crisis managers tell stakeholders about the past good works of the organization.
7. Ingratiation: crisis manager praises stakeholders for their actions.
8. Compensation: crisis manager offers money or other gifts to victims.
9. Apology: crisis manager indicates the organization takes full responsibility for the crisis and
asks stakeholders for forgiveness.
It should be noted that reputation repair can be used in the crisis response
phase, post-crisis phase, or both. Not all crises need reputation repair efforts.
Frequently the instructing information and expressions of concern are enough to
protect the reputation. When a strong reputation repair effort is required, that
effort will carry over into the post-crisis phase. Or, crisis managers may feel
more comfortable waiting until the post-crisis phase to address reputation
concerns.

A list of reputation repair strategies by itself has little utility. Researchers have
begun to explore when a specific reputation repair strategy or combination of
strategies should be used. These researchers frequently have used attribution
theory to develop guidelines for the use of reputation repair strategies. A short
explanation of attribution theory is provided along with its relationship to crisis
management followed by a summary of lessons learned from this research.

Attribution theory believes that people try to explain why events happen,
especially events that are sudden and negative. Generally, people either
attribute responsibility for the event to the situation or the person in the
situation. Attributions generate emotions and affect how people interact with
those involved in the event. Crises are negative (create damage or threat of
damage) and are often sudden so they create attributions of responsibility.
People either blame the organization in crisis or the situation. If people blame
the organization, anger is created and people react negatively toward the
organization. Three negative reactions to attributing crisis responsibility to an
organization have been documented: (1) increased damage to an organization’s
reputation, (2) reduced purchase intentions and (3) increased likelihood of
engaging in negative word-of-mouth (Coombs, 2007b; Coombs & Holladay, 2006).

Most of the research has focused on establishing the link between attribution of
crisis responsibility and the threat to the organization’s reputation. A number of
studies have proven this connection exists (Coombs, 2004a; Coombs & Holladay,
1996; Coombs & Holladay, 2002; Coombs & Holladay, 2006). The research
linking organizational reputation with purchase intention and negative word-of-
mouth is less developed but so far has confirmed these two links as well
(Coombs, 2007b; Coombs & Holladay, 2006).

Coombs (1995) pioneered the application of attribution theory to crisis

management in the public relations literature. His 1995 article began to lay out
a theory-based approach to matching the reputation repair strategies to the
crisis situation. A series of studies have tested the recommendations and
assumptions such as Coombs and Holladay (1996), Coombs & Holladay, (2002)
and Coombs (2004a), and Coombs, (2007b). This research has evolved into the
Situation Crisis Communication Theory (SCCT). SCCT argues that crisis
managers match their reputation repair strategies to the reputational threat of
the crisis situation. Crisis managers should use increasingly accommodative
the reputation repair strategies as the reputational threat from the crisis
intensifies (Coombs & Holladay, 1996; Coombs, 2007b).

Crisis managers follow a two-step process to assess the reputational threat of a

crisis. The first step is to determine the basic crisis type. A crisis managers
considers how the news media and other stakeholders are defining the crisis.
Coombs and Holladay (2002) had respondents evaluate crisis types based on
attributions of crisis responsibility. They distilled this data to group the basic
crises according to the reputational threat each one posed. Table 6 provides a
list the basic crisis types and their reputational threat.

Table 6: Crisis Types by Attribution of Crisis Responsibility

Victim Crises: Minimal Crisis Responsibility
Natural disasters: acts of nature such as tornadoes or earthquakes.
Rumors: false and damaging information being circulated about you organization.
Workplace violence: attack by former or current employee on current employees on-site.
Product Tampering/Malevolence: external agent causes damage to the organization.
Accident Crises: Low Crisis Responsibility
Challenges: stakeholder claim that the organization is operating in an inappropriate manner.
Technical error accidents: equipment or technology failure that cause an industrial accident.
Technical error product harm: equipment or technology failure that cause a product to be
defective or potentially harmful.
Preventable Crises: Strong Crisis Responsibility
Human-error accidents: industrial accident caused by human error.
Human-error product harm: product is defective or potentially harmful because of human error.
Organizational misdeed: management actions that put stakeholders at risk and/or violate the law.
The second step is to review the intensifying factors of crisis history and prior
reputation. If an organization has a history of similar crises or has a negative
prior reputation, the reputational threat is intensified. A series of experimental
studies have documented the intensifying value of crisis history (Coombs, 2004a)
and prior reputation (Coombs & Holladay, 2001; Coombs & Holladay, 2006; Klein
& Dawar, 2004). The same crisis was found to be perceived as having much
strong crisis responsibility (a great reputational threat) when the organization
had either a previous crisis (Coombs, 2004a) or the organization was known not
to treat stakeholders well/negative prior reputation (Coombs & Holladay, 2001;
Coombs & Holladay, 2006; Klein & Dewar, 2004). Table 7 is a set of crisis
communication best practices derived from attribution theory-based research in
SCCT (Coombs, 2007b, Coombs & Holladay, 1996; Coombs & Holladay, 2001;
Coombs & Holladay, 2006).

Table 7: Attribution Theory-based Crisis Communication Best Practices

1. All victims or potential victims should receive instructing information, including recall
information. This is one-half of the base response to a crisis.
2. All victims should be provided an expression of sympathy, any information about corrective
actions and trauma counseling when needed. This can be called the “care response.” This is the
second-half of the base response to a crisis.
3. For crises with minimal attributions of crisis responsibility and no intensifying factors,
instructing information and care response is sufficient.
4. For crises with minimal attributions of crisis responsibility and an intensifying factor, add
excuse and/or justification strategies to the instructing information and care response.
5. For crises with low attributions of crisis responsibility and no intensifying factors, add excuse
and/or justification strategies to the instructing information and care response.
6. For crises with low attributions of crisis responsibility and an intensifying factor, add
compensation and/or apology strategies to the instructing information and care response.
7. For crises with strong attributions of crisis responsibility, add compensation and/or apology
strategies to the instructing information and care response.
8. The compensation strategy is used anytime victims suffer serious harm.
9. The reminder and ingratiation strategies can be used to supplement any response.
10. Denial and attack the accuser strategies are best used only for rumor and challenge crises.
In general, a reputation is how stakeholder perceive an organization. A
reputation is widely recognized as a valuable, intangible asset for an
organization and is worth protecting. But the threat posed by a crisis extends
to behavioral intentions as well. Increased attributions of organizational
responsibility for a crisis result in a greater likelihood of negative word-of-mouth
about the organization and reduced purchase intention from the organization.
Early research suggests that lessons designed to protect the organization’s
reputation will help to reduce the likelihood of negative word-of-mouth and the
negative effect on purchase intentions as well (Coombs, 2007b).

POST-CRISIS PHASE
In the post-crisis phase, the organization is returning to business as usual. The
crisis is no longer the focal point of management’s attention but still requires
some attention. As noted earlier, reputation repair may be continued or
initiated during this phase. There is important follow-up communication that is
required. First, crisis managers often promise to provide additional information
during the crisis phase. The crisis managers must deliver on those
informational promises or risk losing the trust of publics wanting the
information. Second, the organization needs to release updates on the recovery
process, corrective actions, and/or investigations of the crisis. The amount of
follow-up communication required depends on the amount of information
promised during the crisis and the length of time it takes to complete the
recovery process. If you promised a reporter a damage estimate, for example,
be sure to deliver that estimate when it is ready. West Pharmaceuticals
provided recovery updates for over a year because that is how long it took to
build a new facility to replace the one destroyed in an explosion. As Dowling
(2003), the Corporate Leadership Counsel (2003), and the Business Roundtable
(2002) observe, Intranets are an excellent way to keep employees updated, if the
employees have ways to access the site. Coombs (2007a) reports how mass
notification systems can be used as well to deliver update messages to
employees and other publics via phones, text messages, voice messages, and e-
mail. Personal e-mails and phone calls can be used too.

Crisis managers agree that a crisis should be a learning experience. The crisis
management effort needs to be evaluated to see what is working and what
needs improvement. The same holds true for exercises. Coombs (2006)
recommends every crisis management exercise be carefully dissected as a
learning experience. The organization should seek ways to improve prevention,
preparation, and/or the response. As most books on crisis management note,
those lessons are then integrated into the pre-crisis and crisis response
phases. That is how management learns and improves its crisis management
process. Table 8 lists the Post-Crisis Phase Best Practices.

Table 8: Post-Crisis Phase Best Practices

1. Deliver all information promised to stakeholders as soon as that information is known.
2. Keep stakeholders updated on the progression of recovery efforts including any corrective
measures being taken and the progress of investigations.
3. Analyze the crisis management effort for lessons and integrate those lessons in to the
organization’s crisis management system.

CONCLUSION
It is difficult to distill all that is known about crisis management into one,
concise entry. I have tried to identify the best practices and lessons created by
crisis management researchers and analysts. While crises begin as a
negative/threat, effective crisis management can minimize the damage and in
some case allow an organization to emerge stronger than before the crisis.
However, crises are not the ideal way to improve an organization. But no
organization is immune from a crisis so all must do their best to prepare for
one. This entry provides a number of ideas that can be incorporated into an
effective crisis management program. At the end of this entry is an annotated
bibliography. The annotated bibliography provides short summaries of key
writings in crisis management highlighting. Each entry identifies the main
topics found in that entry and provides citations to help you locate those
sources.

7 critical steps to crisis

management
Before a crisis strikes, business owners should think about
how a disaster would impact employees, customers,
suppliers, the general public and their company's value. A
crisis can strike any company anytime, anywhere.
Advanced planning is the key to survival.
 By Bruce ConditVice President, Allegiance Capital @AllCap

SHUTTERSTOCK

Daily headlines are filled with companies dealing with crisis. Is your company
prepared? Just as BP learned with the gulf oil spill and Malaysian Airlines
learned through two disasters, a crisis can strike at any time. However, unlike
Fortune 500 firms, smaller companies are often unprepared and usually do
not have a crisis plan in place. They believe it will never happen to them. But,
what if it does?
How well would your company fare if you died in an auto accident on the way
to work? Who would assume your role and continue operations? Suppose you
own a retail company and you discover that one of your primary products or
services has created a major health issue--what would you do? If you operate
a construction company and an industrial accident has killed several key
members of your team--how would you react?
Before a crisis strikes, business owners should think about how a disaster
would impact employees, customers, suppliers, the general public and their
company's value. A crisis can strike any company anytime, anywhere.
Advanced planning is the key to survival. Here are seven critical steps to crisis
management that every company should have in place regardless of its size.
1.Have a plan--Every plan begins with clear objectives. The objectives during
any crisis are to protect any individual (employee or public) who may be
endangered by the crisis, ensure the key audiences are kept informed, and
the organization survives. This written plan should include specific actions that
will be taken in the event of a crisis.
2. Identify a spokesperson--If the crisis could potentially impact the health or
well-being of customers, the general public or employees, it may attract media
attention. To ensure your company speaks with one voice and delivers a clear
consistent message, a spokesperson must be identified as well as prepared to
answer media questions and participate in interviews.
3. Be honest and open--Nothing generates more negative media coverage
than a lack of honesty and transparency. Therefore, being as open and
transparent as possible can help stop rumors and defuse a potential media
frenzy. This transparency must be projected through all communications
channels: news interviews, social media, internal announcements, etc.
4. Keep employees informed--Maintaining an informed workforce helps
ensure that business continues to flow as smoothly as possible. It also
minimizes the internal rumor mill that may lead to employees posting false
reports on social media.
5. Communicate with customers and suppliers--You do not want
customers and suppliers to learn about your crisis through the media.
Information on any crisis pertaining to your organization should come from
you first. Part of the crisis communications plan must include customers and
suppliers and how they will be regularly updated during the event.
6. Update early and often--It is better to over-communicate than to allow
rumors to fill the void. Issue summary statements, updated action plans and
new developments as early and as often as possible. Remember that with
today's social media and cable news outlets, we live in a time of the 24/7
news cycle. Your crisis plan must do the same.
7. Don't forget social media--The Ebola crisis and other recent major news
events have all confirmed that social media is one of the most important
channels of communications. Be sure to establish a social media team to
monitor, post and react to social media activity throughout the crisis.
A crisis that is not managed well can wipe out decades of hard work and
company value in a matter of hours. A well-managed crisis confirms that your
company has the processes and procedures in place to address almost any
issue that may develop.
Another critical component of crisis management planning is the
establishment of a succession plan. You should clearly outline the necessary
steps to follow if you suddenly become unable to perform your duties. This
plan may include selling the company, or transferring ownership to family
members or key employees.
What is most important is that you create the crisis management plan when
everything is running smoothly and everyone involved can think clearly. By
planning in advance, all parties will have time to seriously think about the ideal
ways to manage different types of crises.
As you develop your crisis management plan, seek advice from the experts
that include your leadership team, employees, customers, communications
experts, investment bankers, exit planners, lawyers and financial managers.
Each of these individuals can provide you valuable insight that could be
critical should a crisis strike your company.
PUBLISHED ON: OCT 20, 2014

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

More from Inc.

Crisis Management: A Historical and Conceptual Approach for a Better Understanding of Today’s Crises

By Khaled Zamoum and Tevhide Serra Gorpe

Submitted: October 28th 2017Reviewed: March 5th 2018Published: June 27th 2018

DOI: 10.5772/intechopen.76198

Home > Books > Crisis Management - Theory and Practice

Downloaded: 1420

Abstract

We argue that the basic and contemporary concepts related to crisis management, especially in the
communication field, share some similarities with what was practiced in ancient civilizations such as the
importance of direct contact between the leadership and the public. Other similarities include the
accurate diagnosis of the real causes of the crisis, the forbiddance of the dissemination of false news
and the reassurance of the public opinion that there is a solution to the crisis, a sound management
decision, and a good plan for its implementation. We link the past time crises to the contemporary era,
providing a comparison framework. The history of crisis tends to show us that the study of crisis
management cannot be linked to a specific civilization or era, especially when humanity had witnessed
multiple and complex environmental, political, economic, and military crisis. Moreover, some of the
problems and complex issues in the modern era are rooted in history. Thus, many geopolitical crises
nowadays are the result of old causes. The study of crisis management from an academic point of view
should be a multifaceted analysis, including a historical, a cultural, and an anthropological one, which
determines the course of evolution and consequences of the crisis.

Keywords

history of crisiscrisis management leadership and crisisethics and crisis

Chapter and author infoShow +

1. Introduction

Humans today are witnessing multiple serious crises, whether economic, social, environmental, but the
most devastating crises are those security crises that end up with endless wars, killing thousands each
year, and displacing millions of others. In fact, most of those destroying conflicts could be avoidable if
the parties involved embrace wisdom by putting common interests ahead of their own desires, and
choosing patience and dialog over stubbornness and extremism, particularly when conflicts and crises
do not build nations and civilizations, but destroy everything instead. Today’s crises bring new
challenges to address and the theoretical frameworks that have been developed by various scholars
may not be adequate to deal with them [1].

The term crisis carries many meanings in itself. These meanings guide the crisis managers and leaders in
deciding what to do in a crisis situation. It is an interesting applied area as well since we talk about
“managing” a crisis when actually each crisis situation is very unique by itself.

What constitutes a crisis is not easily agreed upon however, despite lack of clarity, there are specific
conditions of crises in the crisis literature. For example, crisis situations share six characteristics which
are rare, significant, high impact, ambiguous, urgent and involve high stakes [2]. Crisis involves a period
of discontinuity, a situation where the core values of the organization/system are under threat, and this
requires critical decision-making. There is a destabilizing effect to the organization and its stakeholders
and an escalation of one or more issues, errors or procedures are expected in this period [3].

A crisis could start out by a simple piece of news being disseminated through media outlets or social
networks, then find recipients at large, which leads to the state of agitation and uncertainty within the
target of the crisis. In a narrow framework, crisis can be limited to avoid negative media coverage;
however, this is only related to the communication side of a crisis. Crisis prevention, mitigation and
communication response starts with a strategic business plan and “…the integrity and legitimacy of the
organization are central to the theme of crisis” [4].

The solution against any crisis begins initially with fighting its causes, such as dealing efficiently with the
sources of rumors and false news including via social media, which target official and non-official
organizations and create a toxic environment, which turns into an explosive one in the real world, if not
tackled early enough and efficiently. Crisis management is a proactive process which involves dealing
with the crisis before it happens, during the crisis and aftermath [2]. Crisis management is a process
designed to prevent or lessen the damage a crisis can inflict on an organization and its stakeholders. As a
process, crisis management is not one thing [5]. The purpose of crisis management is to protect the
organization, sector or the stakeholders from damage and prevent or diminish the negative outcomes of
crisis [6].

As stated, crisis management is a process with many parts and one of the crisis management models is
explained as a three-stage process by Coombs [7]. The pre-crisis stage consists of three sub stages:
signal detection, prevention and crisis preparation. At this stage, if a crisis has been detected, this crisis
should be prevented from taking place and prepare for crisis management. The goal is to reduce the
risks that may create crisis and also be prepared strategically and tactically. In this respect, action wise,
the organization at this stage is expected to have a crisis management plan that is updated regularly.
The organization forms a team for managing the crisis, selects spokesperson/s and prepares draft crisis
messages. The second stage is the crisis stage itself, and this stage is formed by two substages, which
are crisis recognition and crisis containment. At this stage, the organization’s response to the crisis
situation, its communication with stakeholders and how the organization deals with crisis is important.
This stage covers the response of the organization to what has actually happened: the crisis
management plan is put into action, and the literature suggests three points which are to be quick, to be
accurate and to be consistent. Support from public relations is heavily observed at this stage since they
develop the messages to be sent to all stakeholder groups, making sure that the public safety is the
most important aspect. The damage that is inflicted on the organization is worked on to repair it. The
post-crisis stage, as the name suggests, comes after the crisis is resolved. At this stage, the organization
evaluates how they dealt with the crisis. Their focus is to be better prepared for potential crises. The
crisis may not be as hot as before, but still the organization scans the media and the activities of
stakeholder groups. Understanding the perceptions of their stakeholder groups is vital. In the crisis
management literature, there are other crisis management process models suggested [8, 9, 10].
However, this three-phase model is a simpler one compared to them.

A crisis situation creates need for information and that need is fulfilled with communication. Neither the
crisis management plan nor the crisis communication before, during and after a crisis should be ignored.
Crisis communication addresses to both internal and external audiences affected by the crisis situations.
It provides information and that information should be consistent throughout the crisis situation with
the designation of one primary spokesperson [11]. Coombs differentiates between two types of crisis
communication: “crisis knowledge management” and “stakeholder reaction management.” “Crisis
knowledge management” involves collecting information, analyzing the information gathered, sharing
what is learned and decision-making. The “stakeholder reaction management,” involves efforts to
influence the organization’s stakeholder groups through communication. This may be accomplished
through words or what is done, the deed. It is important to understand the perception of the
stakeholders’ groups of the crisis situation, the organization under crisis and its response to the crisis to
influence them [12].

We claim that although scholarship in crisis has augmented both in public relations and management
fields recently, crisis situations of different types are common in all civilizations and always there had
been an attempt to fight with it. This chapter discusses some areas of a crisis with a focus on the history
of the crisis. The attempt to deal with crises in the past times may not be as strategic as today’s way of
managing crises, but all civilizations fought with it situationally based on the specifics of the society
and/or its leaders. Moving from this point, the chapter also shares modern time academic work on crisis
including crisis and its link with other fields, crisis management theories, factors affecting the crisis
management, leadership in crisis situations, and ethics. Our understanding of crisis is broader than an
organizational crisis with operational and/or reputational crisis situations, but encompasses all types of
crisis situations. At the conclusion of the chapter, we also put forward some ideas on how to “approach”
crises.
2. Literature review

2.1. “Crisis” from past times

The accumulation of knowledge associated with the evolution of the concept of crisis management is
not only the emanation of the modern academic studies or the practices and experiences of
organizations and agencies, crisis management, rather it benefitted from the expertise and experiences
of previous human civilizations. All civilizations had laid the methodological foundations in managing the
various crises it faced, within the scope of the moment and its specific challenges, “Crisis and contention
do not surface instantly in any society they are rooted in history” [13].

It is argued that as we look back, crises have been a part of the personal, domestic, and international
landscape from time immemorial, from the ancient world to the twenty-first century [14]. Thucydides
described a crisis between Athens and Sparta that resulted in the Peloponnesian War (431–404BC). The
factors that are associated with the importance of direct communication, interaction, and dialog with
the public opinion were important in crisis management in the Greek and Roman eras. These
civilizations were largely focused on creating spaces for dialog, debates, and direct communication with
the public. Those social activities took place in most public venues, such as theaters, stadiums, places of
worship, and so on.

As for the Greek civilization, the foundations of its values were based on philosophy, raising theological
and nontheological issues for never-ending dialog and discussion. Moreover, the Greek civilization was
characterized by its proactive community participatory approach in resolving crises. The citizen had the
right to discuss all issues of concern to public affairs. On the other hand, The Roma civilization tended to
take care of material and entertainment needs of its citizens to ensure the stability of the empire.
Romans also urged residents of Rome and its colonies to participate in the discussion of the problems of
the empire, as they believed that the dialog contributed to absorb public anger and this was what had
enabled the empire to overcome many crises.

As stated earlier, some of the problems and complex issues in the modern era are rooted in history.
Thus, many of the geopolitical crises nowadays are the result of old causes. For example, some military
and political conflicts, as well as the emergence of the protesting movement of ethnic and religious
minorities in the Middle East and North Africa, have their causes linked mainly to military and political
rearrangement plans that were consecrated in the Vienna Conference on 9 June 1815 and the Sykes-
Picot Agreement of 1916. They constituted a secret agreement between France and the United Kingdom
that was ratified by the Russian Empire, on the sharing of the Fertile Crescent land between France and
Britain to determine the zones of influence in West Asia after the pummeling of the Ottoman Empire.

The social texture of a society and the nature of crisis which surface in it are a product of its historicity
[13].
2.2. Defining crisis and its linked fields

Defining crisis is not an easy task because of the interdisciplinary nature of the crisis concept. There is
disagreement on what constitutes a crisis [3]. Although there is no agreed definition of crisis, there is a
general consensus that a crisis event is highly unexpected and uncertain in nature [15]. We suggest to
remove this definition.

Ithaar Abdul Hadi argues that the concept of crisis is an idiomatic concept used by Arabs as an indication
for severity and drought [16]. In the English language, it means a change for the better or the worse
[17]. The origins of the word, crisis, in the late Middle English (denoting the turning point of a disease):
medical Latin, and from the Greek word krisis, ‘decision,’ and from krinein ‘decide.’ The general sense
‘decisive point’ dates from the early seventeenth century [18].

The Chinese Mandarin character for crisis includes “danger” and “opportunity.” This idea is especially
useful because it conveys the fact that we may create opportunities out of a situation that threatens us
[14]. Some Western and Chinese crisis experts claim that it may mean danger and a “turning point,”
which indicates a sense of possible positive outcome [19].

Heath and Millar by tracking crisis discussions over the years state that some of these definitions studied
feature a mistake or a turning point in the organization, some emphasize the need for management
efforts beyond normal sequence and some other discussions focus on stress, inadequate control,
uncertainty, violation of ethics weak preparation, preparations and the need for crisis communicating
planning [4].

Definitions of crisis by various scholars are outlined in “Parameters for Crisis Communication” by
Coombs [20] and Timothy Coombs defines crisis communication as “the perception of an unpredictable
event that threatens important expectancies of stakeholders and can seriously impact an organization's
performance and generate negative outcomes” [21]. This definition highlights the issue of the negative
impact of a crisis on the effectiveness of the affected company or organization’s performance, as any
crisis hinders its development and leaves it in a state of confusion, anxiety and instability. “…Crises are
largely perceptual. If stakeholders believe there is a crisis, the organization is in a crisis unless it can
successfully persuade stakeholders it is not….” [12].

Gibson argues that true crisis is usually the result of a management failure to respond appropriately to
an issue, emergency or accident that requires a timely response and communication [22]. Coombs, in his
definition below, explains the types of damage a crisis can create:
crisis is defined as a significant threat of operations that can have negative consequences if not handled
properly. In crisis management, the treat is the potential damage a crisis can inflict on an organization,
its stakeholders, and an industry. A crisis can create three related threats: (1) public safety, (2) financial
loss, and (3) reputation loss [7].

The roots of crisis management are in emergency and disaster [20]. Mitroff & Anagnos argue that in
contrast to the disciplines of emergency and risk management, which deal primarily with natural
disasters, the field of crisis management deals mainly with man-made or human-caused crises [23].
Disaster and crisis do not mean the same thing. Crisis management may take place in disaster situations,
but disasters are larger in scale and require coordination. Crises can be embedded in disaster and poor
disaster management can result in crises for the agencies responsible for dealing with it [24]. Disasters
require society’s and society’s network dealing with it, and the collaboration process is emphasized in
disaster management.

Crisis communication is linked or connected with three areas which are issues management, risk
communication and reputation management. Failure in any of these areas can create a crisis situation
and a need for crisis management. Also an ineffective crisis communication can create a need for risk
communication, issues management and reputation management as well [24].

How are issues management and crisis management related? An issue can create crisis or vice versa. The
issue generators are not only government entities, but also stakeholder groups. Stakeholder groups may
raise issues about an organization and if they perceive that the organization is not fulfilling their
expectations, then, this can turn into a crisis condition where the organization’s reputation may be
effected as well [24].

Reputation management is a broad area where we talk about measurement in reputation, different
reputation dimensions, and a comprehensive reputation management plan. Building and maintaining
relationships is a very important topic in reputation management. Crisis communication is a specific part
of reputation management because a crisis may endanger the reputation of the entity. A key difference
between operational and reputational crises is that operational crises typically create some threat to
public safety and/or stakeholder welfare. Reputational crises are not likely to produce the same level
concerns. An operational crisis can have an impact reputational image, but reputational crises do not
have an impact on operations in a meaningful way [25].

The tactical approach to crisis management dictates what needs to be done or avoided when a crisis of
any type hits. In this light, we come across lists of do and do not’s, such as “say never no comment, “or
be accessible to media.” However, we have to benefit from research that has looked at specific
dimensions of crisis and the theories that have been borrowed from other disciplines and then became
a theory of crisis management. In this way, crisis management field does not turn into a mediated- crisis
control using media relations online and offline because the ingredients and surroundings of any crisis
situation is complex and should not be underestimated.

2.3. Crisis management theories

An analysis that has been done in crisis communication research articles in Journal of Public Relations
Review and Public Relations Review from 1975 to 2006 reveals the theoretical frameworks of crisis
management. The theories that are applied in crisis communication research are situational crisis
communication theory, issue and crisis management theory, image restoration theory, apology theory,
attribution theory, contingency theory, situational theory, organizational theory and the research also
finds other theories such as the excellence theory, the diffusion and innovation theory, the self-
disclosure theory, the chaos theory, the commodity theory, the stakeholder theory, postmodern theory,
co-orientation theory, and Fink’s stages of crisis [26].

The crisis management theories are from public relations, management and include some rhetorical
theories such as image restoration and apology theory. The most mentioned theory in the study was the
situational crisis communication theory (SCCT). In brief, below are the explanations of the widely
mentioned theories in the research paper.

The situational crisis communication theory proposed by Coombs and Holladay is an extension of the
attribution theory [27]. The underlying idea behind SCCT is that corporations should strategically
respond to a crisis situation based on an understanding of how the public attributes responsibility for
the crisis. If the public perceives a crisis to be more intentional then, they attribute more responsibility
to an organization and vice versa [28] SSCT is used to test different crisis response strategies. SCCT is
audience-oriented theory and still developing [20].

Issue and crisis management theory: The term issues management is coined by Howard Chase in 1976.
In his words:

Issues management is the capacity to understand mobilize, coordinate and direct all strategic and policy
making functions, and all public affairs/public relations skills, toward achievement of one objective:
meaningful participation in creation of public policy that affects personal and institutional destiny [29].

As stated before, issue and crisis have reciprocal relationships. An issue can create a crisis and at the
same time, a crisis can create an issue to deal with. If the issue is not handled effectively, it can turn into
a crisis. In other words, if effective issue management is done, it is less likely to be faced with a crisis
situation. Therefore, in the issues management process, there is a need for anticipation of emerging
issues. This scanning can be considered as pre-crisis planning.
Image restoration (repair theory): Benoit argues that the image restoration strategies are reputation
repair strategies that can be used after a crisis and that successful crisis resolution requires honest and
ethical communication in times of crisis [30]. Image restoration theory offers several crisis response
strategies. This can range from “denial” to “evading responsibility” and to “reducing offensiveness” and
there are several options to select from these strategies. The theory developed by William Benoit
evolved over the years. The core concept of the theory states that an attack can threaten the reputation
(image). An offensive act or accusation of responsibility for the act is a threat for reputation, and the
theory uses communication to defend its reputations [9, 20].

Apology, corporate apologia: Apology and apologia are not similar. Apologia, as another communication
response strategy, is more than apology. By using apologia, the organization explains clearly and tries to
convince the stakeholders that it is right [9]. Apologia is counter-description where the
person/organization defends itself for creating a more favorable content for the allegations. Four
strategies can be used when an organization is accused of wrong doing. These are denial (not involved in
any wrong doing) bolstering (reminding of good things that has been done) differentiation (remove the
action from its negative content) and transcendence (place the action in a new and favorable context
[31].

Attribution theory: Attribution theory highlights and emphasizes communication and media dimension
and the importance of the role of public relations in crisis management. It explains how people make
sense of events. When an event happens and especially when this is negative event, people try to
determine why the event occurred. People will make attributions of responsibility for events. When
applied to crisis, stakeholders will make attributions of crisis responsibility internally (organization) or
externally (environmental factors). Logically, if the stakeholders attribute responsibility to the
organizations for the crisis situations, then they will have more negative images of the organization and
vice versa. This theory is audience-based and attempts to understand the factors in the crisis situation
itself that shape the crisis attributions stakeholders make [20, 32].

Contingency theory of conflict management tries to explain an organization’s communication with its
public groups and specifies the various factors that have an effect on this communication. It has the
concept of “stance” which implies how an organization responds to competition and conflicts with other
parties. Stances are on a continuum and at one point of the continuum, there is advocacy and at the
other end is accommodation. When an organization argues for its interest, it is advocacy and when the
organization makes concessions to other parties, it is accommodation [33]. Contingency theory applied
to crisis demonstrates similarity between the stances and the crisis response strategies of image repair
and SCCT [20]. Contingency theory offers additional variables to consider such as threat type and threat
duration.
2.4. Factors affecting the process of crisis management

Crisis management process requires many skills and expertise because as stated previously, we are
talking here about the process of changing reality and convincing the public opinion of the
organization’s point of view that defends its vision and interests [34]. Moreover, the crisis management
requires social, legal and communication crucial knowledge in the search for possible solutions.

Here are some of the factors affecting crisis management:

Firstly, psychological factors constitute an important element for the individual in charge of crisis
management. Self-control, self-confidence, and coolness, are some of the mental attributes that are
highly needed, as the crisis management process requires patience, wisdom, and sound thinking in the
planning for the management of the crisis and providing appropriate solutions. In this context, Jin argues
that the process of managing crises requires some basic knowledge in psychology, mainly because
managing some crises needs to a great extent of controlling emotions and sentiments, self-control,
patience, calmness and keeping away from anxiety and carelessness [35]. These attitudes and behaviors
are essentials for managing a crisis efficiently, professionally, and with a lot of conciseness, preciseness,
and without tempered reactions that can affect negatively rational and successful decisions.

Secondly, good knowledge of the environment surrounding the organization may include knowledge
related to the cultural, social, and political system of the society. This is due to the complexity of the
process of managing a crisis that needs quick and decisive decisions and emergency management
planning, and execution [36].

Thirdly, those in charge of managing crises should have a good knowledge of the nature of local laws
and regulations related to libel, defamation, disinformation, and copyrights. Also, legal and legislative
components are associated tightly with moral and value aspects of the society, for those in charge of
managing the crisis should be able to control its consequences. Moreover, they will manage to even
improving the performance of the organization, its reputation and image, by committing themselves to
openness and transparency, and showing genuine empathy for the victims.

For example, British Petroleum (BP) applied the mentioned principals during the oil spill crisis on April
20, 2010, in the Gulf of Mexico [37]. The Company opted for transparency and honesty with the
American public opinion and the authorities, by making full disclosure of the crisis and its repercussions,
and providing full apology. It also offered compensations that exceeded $20 billion, even though the
company’s losses from the incident had reached $70 billion.
Fourthly, setting up a communication and media plan aimed at connecting with the public, for it
desperately needs a true narrative of the crisis. Thus, any delay, miscommunication, or silence would
expose the organization to rumors and false news that aggravates and complicate the crisis even more.
Communication strategy must be built on honesty with the public and opinion leaders because it is the
right and proper way to restore the ravages of the crisis. The process of regaining the trust of the public
during or after the crisis is the biggest challenge, and it is impossible to win it without embracing speech
openness and full transparency in managing the crisis.

Fifthly, the necessity of involving the public in managing the crisis. This can take place in several ways.
One of them is including nongovernmental organizations, opinion leaders, and members of local
community. Involving them in the crisis communication strategy in order to reach the appropriate
solutions leads eventually to the absorption of public anger and win back its confidence. In fact one of
the approaches in regaining the trust of the public during or after the crisis is to respect the feelings of
those affected by the crisis and recognizing their rights in order to rehabilitate them and involve them in
making the appropriate decisions.

2.5. Decision-making in crisis and leadership in crisis

On a communicational level, it is primordial that managing a crisis in a positive manner requires a deep
understanding of the local cultural environment and its characteristics, as well as the values and ethics
of the society to which they belong. This brings us to a discussion of decision-making and ethical
leadership.

In the light of what is considered as crisis, decision-making in crisis is very vital. The crisis management
process requires making wise and sound decisions, as they contribute to a successful exit of the crisis
and alleviate its effects [38]. This might explain why decision-making often requires considerable
expertise and knowledge. In fact, key features of an outstanding leader is his ability to make the right
decisions in times of crisis, hence the timing of making those decisions is crucial to their success and
efficiency. Leaders should not rush to conclusions and make hasty decisions about them, especially
when the nature of the crisis does not require a swift interference or decision-making process. This
highlights a quality of leadership by not caving to pressure and making mistakes in the process, while it
is necessary to take the time needed to look deeply into the problem and consult the people who are
aware of it.

Leadership in crisis has become important especially after the 9/11 and the threat of terrorism. This new
reality demands for leaders who have communication skills, caring and vision of the crisis situation. In
addition to these qualities, empathy and expertise and providing experiences with an ability to lead are
the requirements from leaders who have to deal with crisis situations [39]. Task-oriented leadership
behaviors are found more helpful to the effectiveness of crisis leadership. At the same time, people and
organization-oriented leadership behaviors are not also low on the effectiveness. The authors conclude
that although their research highlights task-oriented leadership, but focusing on this leadership alone
will not increase the efficiency of the crisis management [40].

Leaders establish the foundations of the collective consultation that allows the opportunity to
participate in decision-making and the research for solutions in time of crisis.

2.6. The ethical aspect of crisis management

The ethical aspect of crisis management is one of the most important components that recent studies
emphasize upon, knowing that the ethical element is crucial to the mental image rebuilding process, and
to regain the confidence of the public opinion as well [41, 42]. “Engaging in ethical communication in
times of crisis seems to be the ongoing theme in today’s stakeholders communication research and
practice” [41].

Coldwell confirms that recent financial and business crises have indicated repeatedly the poverty of
ethical and responsible leadership behavior in high places [42]. A most recent example of this
phenomenon with global repercussions was the Volkswagen (VW) Crisis, which was largely brought
about through the unethical Business Behavior of its leaders.” On September 18, 2015, Volkswagen
became embroiled in crisis after the US Environmental Protection Agency (EPA) confirmed Volkswagen’s
violation emissions scandal [43].

Ethics recommend that the physical and psychological needs of the stakeholders be the top priority in a
crisis [44]. A crisis should be managed in an ethical manner and “decision-makers who understand the
needs of a wide range of stakeholders as part of their strategic decision-making will make more ethical
decisions during a time of crisis” [45, 46]. Thus, ethical rationality is a habit that must be ingrained in the
culture and daily operations of the organization [47]. This ethical rationality involves the careful
management of the organization’s internal and external stakeholders throughout the duration of the
crisis. Moreover, many recent studies emphasize on the correlation between the moral aspect and the
practical elements such as credibility, objectivity, and the accurate knowledge in the field of public
relations [42].

Credible messages about the potential cause or blame for crisis help the organization to create a
connection to shareholders of the organization. An honest approach is essential during times of crisis. If
communication during crisis events is not ethical, there could be detrimental reputation damage to the
company if proper blame is not assigned for the causes of crisis [48].

Morality and integrity form a solid foundation for a real prevention and risk management plan, which
can be adopted by modern crisis management strategies. This is the best method to solve crises,
meaning by using amnesty and being flexible, as crisis resolution methods by pass the intra-conflicts that
create a worse environment.

Crisis management requires openness and credibility, as lies and opacity lead to deprive a company of
public trust, and make it even harder to regain any credibility in the public opinions. There are always
long-term gains when telling the truth. The other aspect of practicing truthiness has to do with adopting
a strict and clear approach in using traditional and digital media when relaying information, news, and
opinions. Lots of crises start with a rumor, false information, an unverified piece of news, and so on. The
responsibility of spreading misinformation lies on both the sources and the media, as freedom of speech
is tied to a minimum of responsibility. In fact, the result of spreading rumors leads mostly to large crises,
as we have seen what happened to some banks in the United States, Hong Kong, Taiwan, Greece and
Cyprus, where major financial institutions were affected by the spread of rumors during the global
economic crisis that hit the United States in 2008.

The only applicable measure against rumors is to educate people on its negative impact and its
unattended consequences. This mandate works as a basis for public relations ethical
principles/standards: be honest, be accurate, be loyal, and be just [49].

Management should start with establishing an effective communication strategy, which relays on
building a clear, logical and convincing message, as the public is mostly influenced by the
communication style and form, as well as its substance. Spokespeople are essential in the context of
crisis management. The style of the spokespeople must be marked impacted by their unique and
attractive personality. On the other hand, their eloquence, and their open and effective communication
style, coupled with their unique way in delivering information and knowledge, enable them to influence
their audience. The other specificity of spokespeople’s approach is their abilities in using nonverbal
communication, as their facial expressions, their mettle, and body language always reflecting the mood
of the moment. Spokespeople must know how to adjust their voice during their speeches, mixing high
and low pitches to suit their talking points.

3. Conclusion

Examples of different types of crises are identifiable throughout the human history even though they
may not integrate wholly the professional and academic knowledge of crisis management as we know
by of today. Public opinion has been an important force in the history and we see examples of
leaders/organizations that have scanned the opinion of the public informally and thus showed respect
to the opinion of the people. The history is also rich with examples where public opinion is not paid
attention to and thus resulting in negative consequences. Public opinion, public safety, positive image,
and less damage in the crisis situation to the inflected parties have been important pillars in a crisis
situation. For example, Suleiman the Magnificent, the longest reigning Sultan of Ottoman Empire died
during the Battle of Szigetvár, but his death has been kept as a secret to avoid further negative
situations. In any type of interaction, we can see any of these happening-information, persuasion,
compromise, cooperation, which reminds us of the function of crisis management stages. The
accumulation of knowledge on crisis management forms the basis either for avoiding or managing crises
effectively. For example, most of the past military and security crises, including the Second World War,
have been linked to the spread of hatred and racism. Similarly, we are witnessing the same type of
political rhetoric in the mainstream media. The persecution of the Rohingya minority in Myanmar for
over 50 years of military rule is a vivid example of a culture of hatred that had become a systemic policy.

It is inevitable to live in a crisis-free zone as citizens of the world; therefore, we suggest “crisis literacy”
awareness similar to media literacy in some ways. The main concepts of media literacy can be applied to
crisis literacy as well and having crisis literacy expertise will create an ability to encode and decode crisis
situations in a meaningful way. Today’s information landscape is originating from myriad of sources. The
judgment of the individuals may be distorted through these wisely crafted powerful illusions and
sometimes the reality from the creatively constructed crisis communication media messages can be
omitted purposefully. The mediated crisis management efforts may blur the stakeholders groups about
the facts. At the same time, audiences attempt to shape the perceptions about the crisis just like the
media and the organization may do.

In addition to crisis, literacy education embedded in media literacy and/or crisis management course,
and we also suggest working and compiling on crisis management cases from previous civilizations in all
realms of life such as political, religious, individual, international, and so on. An analysis might reveal not
much has changed in what has been done in a crisis situation since then. However, we also need to add
that crisis management has become more scientific today. Global crisis management can be analyzed
from different approaches, and we suggest a historical, ethical and societal approach/framework which
will be comprehensive for all aspects of crisis, including, leadership, ethics, and communication. The
world needs it now.

Crisis Management

REVIEWED BY ADAM HAYES Updated Jul 14, 2019

What Is Crisis Management?

Crisis management is the identification of threats to an organization and its stakeholders, and the
methods used by the organization to deal with these threats. Due to the unpredictability of global
events, organizations must be able to cope with the potential for drastic changes in the way they
conduct business. Crisis management often requires decisions to be made within a short time frame,
and often after an event has already taken place. In order to reduce uncertainty in the event of a crisis,
organizations often create a crisis management plan.

How Crisis Management Works

Any business, large or small, may run into problems that may negatively impact its normal course of
operations. Crises such as a fire, death of a CEO, terrorist attack, data breach, or natural disasters can
lead to tangible and intangible costs to a company in terms of lost sales, customers, and a decrease in
the firm’s net income. Businesses that effectively put a business continuity plan in place in case of
unforeseen contingencies can mitigate the effects of any negative event that occurs. The process of
having a continuity plan in place in the event of a crisis is known as crisis management.

In order to have a business continuity plan in the aftermath of a crisis, most firms start by conducting
risk analysis on their operations. Risk analysis is the process of identifying any adverse events that may
occur and the likelihood of the events occurring. By running simulations and random variables with risk
models, such as scenario tables, a risk manager can assess the probability of a risk occurring in the
future, the best- and worst-case outcome of any negative event, and the damage that the company
would incur should the risk actually happen. For example, a risk manager may estimate that the
probability of a flood occurring within a company’s area of operation is very high. The worst-case
scenario of a flood will be destroying the company’s computer systems and hard drives, thereby, losing
pertinent data on customers, suppliers, and ongoing projects.

Once the risk manager knows what s/he is dealing with in terms of possible risks and the impact to the
firm, a plan is developed by the crisis management team to contain any emergency if and when it
becomes a reality. Following the example above in which a company faces a high probability of a flood
damage, a back-up system for all computer systems might be created. This way, if a flood occurs that
affects the company, it would still have a record of its data and work processes stored. Although
business might slow down for a short period of time while the company purchases new computer
equipment, business operations would not be completely halted. By having a crisis resolution in place, a
company and its stakeholders can prepare and adapt well to sudden, unexpected, and adverse
developments.

KEY TAKEAWAYS
Large or small, even the best-managed businesses may be hit by an unexpected public relations crisis.

These can be recalls of products, a civil lawsuit, or some other unforeseen disaster.

Crisis management is the strategy of dealing with such crises at the corporate level.

Crisis Management vs. Risk Management

Crisis management is not necessarily the same thing as risk management. Unlike risk management,
which involves planning for events that might occur in the future, crisis management involves reacting
to negative events during and after they have occurred. An oil company for example, may have a plan in
place to deal with the possibility of an oil spill, but if such a disaster actually occurs, the magnitude of
the spill, the backlash of public opinion, and the cost of cleanup can vary greatly and may exceed
expectations.

Types of Crises

Crisis can either be self-inflicted or caused by external forces. Examples of external forces that could
affect an organization’s operations include natural disasters, security breaches, or false information
about a company that hurts its reputation.

Self-inflicted crises are caused within the organization, such as when an employee - smokes in an
environment with hazardous chemicals, opens or downloads questionable files on an office laptop,
offers poor customer service that goes viral online, or an accounting department cooking the books.
Internal crisis can be managed, mitigated, or avoided if a company enforces strict compliance guidelines
and protocols regarding ethics, policies, rules, and regulations among employees.

Crisis Management Coverage

Crisis management coverage is insurance coverage designed to help a business limit the negative impact
of events on the business’ reputation. It is an insurance agreement usually made as part of technology
errors and omissions and Internet/online property and liability insurance policies. Previously concerned
with reputation management, crisis management coverage is increasingly used to cover expenses
incurred to restore confidence in the security of the insured's computer system in the event of a
cybersecurity or data breach. It also covers reputational threats such as product contamination or recall,
terrorism and political violence, natural disasters, workplace violence, and adverse media exposure.

Larger corporations are the most frequent buyers of crisis management coverage, but any business
whose profitability is closely linked to its reputation is a potential customer.
crisis management

Posted by: Margaret Rouse

WhatIs.com

Contributor(s): Ivy Wigmore

Crisis management is the application of strategies designed to help an organization deal with a sudden
and significant negative event.

A crisis can occur as a result of an unpredictable event or as an unforeseeable consequence of some

event that had been considered a potential risk. In either case, crises almost invariably require that
decisions be made quickly to limit damage to the organization. For that reason, one of the first actions in
crisis management planning is to identify an individual to serve as crisis manager.

Other crisis management best practices include:

Planning in detail for responses to as many potential crises as possible.

Establishing monitoring systems and practices to detect early warning signals of any foreseeable crisis.

Establishing and training a crisis management team or selecting an external crisis management firm with
a proven track record in your business area.

Involving as many stakeholders as possible in all planning and action stages.

The field of crisis management is generally considered to have originated with Johnson & Johnson's
handling of a situation in 1982, when cyanide-laced Tylenol killed seven people in the Chicago area. The
company immediately recalled all Tylenol capsules in the country and offered free product in tamper-
proof packaging. As a result of the company's swift and effective response, the effect to shareholders
was minimized and the brand recovered and flourished.
See also: disaster recovery planning, risk management, business continuity, contingency plan, reputation
management, customer relationship management

This was last updated in October 2013

Crisis Management - Meaning, Need and its Features

What is Crisis ?

A sudden and unexpected event leading to major unrest amongst the individuals at the workplace is
called as organization crisis. In other words, crisis is defined as any emergency situation which disturbs
the employees as well as leads to instability in the organization. Crisis affects an individual, group,
organization or society on the whole.

Characteristics of Crisis

Crisis is a sequence of sudden disturbing events harming the organization.

Crisis generally arises on a short notice.

Crisis triggers a feeling of fear and threat amongst the individuals.

Why Crisis ?

Crisis can arise in an organization due to any of the following reasons:

Technological failure and Breakdown of machines lead to crisis. Problems in internet, corruption in the
software, errors in passwords all result in crisis.

Crisis arises when employees do not agree to each other and fight amongst themselves. Crisis arises as a
result of boycott, strikes for indefinite periods, disputes and so on.

Violence, thefts and terrorism at the workplace result in organization crisis.

Neglecting minor issues in the beginning can lead to major crisis and a situation of uncertainty at the
work place. The management must have complete control on its employees and should not adopt a
casual attitude at work.

Illegal behaviors such as accepting bribes, frauds, data or information tampering all lead to organization
crisis.

Crisis arises when organization fails to pay its creditors and declares itself a bankrupt organization.

Crisis Management

The art of dealing with sudden and unexpected events which disturbs the employees, organization as
well as external clients refers to Crisis Management.

The process of handling unexpected and sudden changes in organization culture is called as crisis
management.

Need for Crisis Management

Crisis Management prepares the individuals to face unexpected developments and adverse conditions in
the organization with courage and determination.

Employees adjust well to the sudden changes in the organization.

Employees can understand and analyze the causes of crisis and cope with it in the best possible way.

Crisis Management helps the managers to devise strategies to come out of uncertain conditions and also
decide on the future course of action.

Crisis Management helps the managers to feel the early signs of crisis, warn the employees against the
aftermaths and take necessary precautions for the same.

Essential Features of Crisis Management

Crisis Management includes activities and processes which help the managers as well as employees to
analyze and understand events which might lead to crisis and uncertainty in the organization.

Crisis Management enables the managers and employees to respond effectively to changes in the
organization culture.

It consists of effective coordination amongst the departments to overcome emergency situations.

Employees at the time of crisis must communicate effectively with each other and try their level best to
overcome tough times. Points to keep in mind during crisis

Don’t panic or spread rumours around. Be patient.

At the time of crisis the management should be in regular touch with the employees, external clients,
stake holders as well as media.

Avoid being too rigid. One should adapt well to changes and new situations.

Types of Crisis

Crisis refers to sudden unplanned events which cause major disturbances in the organization and trigger
a feeling of fear and threat amongst the employees.

Following are the types of crisis:

Natural Crisis

Disturbances in the environment and nature lead to natural crisis.

Such events are generally beyond the control of human beings.

Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.

Technological Crisis

Technological crisis arises as a result of failure in technology. Problems in the overall systems lead to
technological crisis.

Breakdown of machine, corrupted software and so on give rise to technological crisis.

Confrontation Crisis
Confrontation crises arise when employees fight amongst themselves. Individuals do not agree to each
other and eventually depend on non productive acts like boycotts, strikes for indefinite periods and so
on.

In such a type of crisis, employees disobey superiors; give them ultimatums and force them to accept
their demands.

Internal disputes, ineffective communication and lack of coordination give rise to confrontation crisis.

Crisis of Malevolence

Organizations face crisis of malevolence when some notorious employees take the help of criminal
activities and extreme steps to fulfill their demands.

Acts like kidnapping company’s officials, false rumours all lead to crisis of malevolence.

Crisis of Organizational Misdeeds

Crises of organizational misdeeds arise when management takes certain decisions knowing the harmful
consequences of the same towards the stakeholders and external parties.

In such cases, superiors ignore the after effects of strategies and implement the same for quick results.

Crisis of organizational misdeeds can be further classified into following three types:

Crisis of Skewed Management Values

Crisis of Skewed Management Values arises when management supports short term growth and ignores
broader issues.

Crisis of Deception

Organizations face crisis of deception when management purposely tampers data and information.

Management makes fake promises and wrong commitments to the customers. Communicating wrong
information about the organization and products lead to crisis of deception.

Crisis of Management Misconduct

Organizations face crisis of management misconduct when management indulges in deliberate acts of
illegality like accepting bribes, passing on confidential information and so on.

Crisis due to Workplace Violence

Such a type of crisis arises when employees are indulged in violent acts such as beating employees,
superiors in the office premises itself.

Crisis Due to Rumours

Spreading false rumours about the organization and brand lead to crisis. Employees must not spread
anything which would tarnish the image of their organization.
Bankruptcy

A crisis also arises when organizations fail to pay its creditors and other parties.

Lack of fund leads to crisis.

Crisis Due to Natural Factors

Disturbances in environment and nature such as hurricanes, volcanoes, storms, flood; droughts,
earthquakes etc result in crisis.

Sudden Crisis

As the name suggests, such situations arise all of a sudden and on an extremely short notice.

Managers do not get warning signals and such a situation is in most cases beyond any one’s control.

Smoldering Crisis

Neglecting minor issues in the beginning lead to smoldering crisis later.

Managers often can foresee crisis but they should not ignore the same and wait for someone else to
take action.

Warn the employees immediately to avoid such a situation.

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 The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content
Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter
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of this material is free for learning and education purpose. Please reference authorship of content used,
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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Crisis Management Model

Crisis Management Model

Crisis refer to unplanned events which cause harm to the organization and lead to disturbances and
major unrest amongst the employees.

Crisis gives rise to a feeling of fear and threat in the individuals who eventually lose interest and trust in
the organization.
Crisis Management Model

Gonzalez-Herrero and Pratt proposed a Crisis Management Model which identified three different
stages of crisis management.

According to Gonzalez-Herrero and Pratt, crisis management includes following three stages:

Diagnosis of Crisis

The first stage involves detecting the early indicators of crisis. It is for the leaders and managers to sense
the warning signals of a crisis and prepare the employees to face the same with courage and
determination. Superiors must review the performance of their subordinates from time to time to know
what they are up to.

The role of a manager is not just to sit in closed cabins and shout on his subordinates. He must know
what is happening around him. Monitoring the performance of the employee regularly helps the
managers to foresee crisis and warn the employees against the negative consequences of the same. One
should not ignore the alarming signals of crisis but take necessary actions to prevent it. Take initiative on
your own. Don’t wait for others.

Planning

Once a crisis is being detected, crisis management team must immediately jump into action. Ask the
employees not to panic. Devise relevant strategies to avoid an emergency situation. Sit and discuss with
the related members to come out with a solution which would work best at the times of crisis. It is
essential to take quick decisions. One needs to be alert and most importantly patient. Make sure your
facts and figures are correct. Don’t rely on mere guess works and assumptions. It will cost you later.

Adjusting to Changes

Employees must adjust well to new situations and changes for effective functioning of organization in
near future. It is important to analyze the causes which led to a crisis at the workplace. Mistakes should
not be repeated and new plans and processes must be incorporated in the system.

Structural Functions Systems Theory

According to structural functions systems theory, communication plays a pivotal role in crisis
management. Correct flow of information across all hierarchies is essential. Transparency must be
maintained at all levels. Management must effectively communicate with employees and provide them
the necessary information at the times of crisis. Ignoring people does not help, instead makes situations
worse. Superiors must be in regular touch with subordinates. Leaders must take charge and ask the
employees to give their best.

Diffusion of innovation Theory

Diffusion of innovation theory proposed by Everett Rogers, supports the sharing of information during
emergency situations. As the name suggests during crisis each employee should think out of the box and
come out with something innovative to overcome tough times. One should be ready with an alternate
plan. Once an employee comes up with an innovative idea, he must not keep things to himself. Spread
the idea amongst all employees and departments. Effective communication is essential to pass on ideas
and information in its desired form.

Unequal Human Capital Theory

Unequal human capital theory was proposed by James. According to unequal human capital theory,
inequality amongst employees leads to crisis at the workplace. Discrimation on the grounds of caste, job
profile as well as salary lead to frustrated employees who eventually play with the brand name, spread
baseless rumors and earn a bad name for the organization.

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of this material is free for learning and education purpose. Please reference authorship of content used,
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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Crisis Management Plan

Crisis Management Plan

Crisis refers to a sequence of unwanted events leading to major disturbances and uncertainty at the
workplace.
Crisis is an unexpected event which not only causes harm to the organization but also triggers a feeling
of fear and insecurity amongst the individuals.

Organizations must be prepared well to face inevitable threats and come out of tough times without
much difficulty. Individuals must immediately jump into action; the moment crisis is being detected at
the workplace.

What is a Crisis Management Plan ?

Individuals need to adopt a step by step approach during critical situations. Planning is essential. Getting
hyper does not solve any problem, instead makes the situation worse. It is a crime to take impulsive and
hasty decisions during crisis. It is essential to think rationally and devise strategies which would work
best during emergency situations. Complaining and cribbing lead you nowhere.

Crisis Management Plan refers to a detailed plan which describes the various actions which need to be
taken during critical situations or crisis.

Any plan prepared by superiors, members of crisis management team and related employees to help
organization overcome crisis in the best possible way is called crisis management plan.

Why Crisis Management Plan ?

Crisis management plan helps the employees to adopt a focused approach during emergency situations.

Crisis management Plan elaborates the actions to be taken by the management as well as the
employees to save organization’s reputation and standing in the industry. It gives a detailed overview of
the roles and responsibilities of employees during crisis.

Individuals representing the crisis management team formulate crisis management plan to reduce the
after effects of crisis at the workplace.

Crisis Management Plan helps the managers and superiors to take quick and relevant actions as per the
situation.

Crisis Management plan protects an organization from inevitable threats and also makes its future
secure.

Such plans reduce instability and uncertainty amongst the employees and help them concentrate on
their work.

Characteristics of Crisis Management Plan

Crisis Management Plan should be made in the presence of all executives. Every member of crisis
management team should have a say in the plan. It is important for each one to give his / her valuable
inputs and suggestions.

Crisis Management Plan should take into account all identified problem areas and suggest a possible
solution for all of them to help the organization come out of crisis as soon as possible.

Make sure the plans are realistic and solve the purpose of saving organization’s reputation and name.

How to make a crisis management plan ?

Identify the problem areas and various factors which led to crisis at the workplace.

Discuss issues and areas of concern amongst yourselves on an open forum for everyone to share their
opinion.

Make sure you have accurate information. Don’t depend on guess works and assumptions. Double check
your information before submitting the final plan.

Crisis Management Plan should not only focus on ways to overcome crisis but also on making the
processes foolproof to avoid emergency situations in future.

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of this material is free for learning and education purpose. Please reference authorship of content used,
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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Crisis Communication - Meaning, Need and
its Process

Crisis Communication - Meaning, Need and its Process

Crisis refers to sequence of unwanted events at the workplace which lead to disturbances and major
unrest amongst the individuals. Crisis generally arises on a short notice and triggers a feeling of threat
and fear in the employees. In simpler words crisis leads to uncertainty and causes major harm to the
organization and its employees.
It is essential for the employees to sense the early signs of crisis and warn the employees against the
negative consequences of the same. Crisis not only affects the smooth functioning of the organization
but also pose a threat to its brand name.

What is Crisis Communication ?

Crisis Communication refers to a special wing which deals with the reputation of the individuals as well
as the organization. Crisis communication is an initiative which aims at protecting the reputation of the
organization and maintaining its public image. Various factors such as criminal attacks, government
investigations, media enquiry can tarnish the image of an organization.

Crisis Communication specialists fight against several challenges which tend to harm the reputation and
image of the organization.

Need for Crisis Communication

Crisis can have a negative effect on brand image. Crisis Communication experts are employed to save an
organization’s reputation against various threats and unwanted challenges.

Brand identity is one of the most valuable assets of an organization. The main purpose of Crisis
Communication team is to protect the brand identity and maintain the organization’s firm standing
within the industry.

Crisis Communication specialists strive hard to overcome tough situations and help the organization
come out of difficult situations in the best possible and quickest way.

Crisis Communication Process

Employees should not ignore any of the external parties and important clients Come out, meet them
and discuss the problem with them. There is nothing to be ashamed of. If needed, seek their help.
Media must not be ignored. Answer their questions. Avoiding media makes situation all the more worse.

Don’t criticize individuals. Show a feeling of care and concern for them. Share their feelings and
encourage them not to lose hope. Encourage them to deliver their level best. Put yourself in their place.
Respect them and avoid playing blame games.
Effective communication must be encouraged at the workplace during emergency situations. Employees
should have an easy access to superior’s cabins to discuss critical issues with them and reach to a
mutually acceptable solution.

Information must flow across all departments in its desired form. One should not rely on mere guess
works or assumptions during crisis. Make sure the information you have is accurate.

Crisis communication specialists must learn to take quick decisions. Remember one needs to respond
quickly and effectively during unstable situations. Think out of the box and devise alternate plans for the
smooth functioning of organization.

Make sure information is kept confidential. Serious action must be taken against employees sharing
information and data with external parties. Such things are considered highly unprofessional and
unethical and spoil the reputation of the organization.

The superiors must evaluate performance of employees on a regular basis. Ask for feedbacks and
reports to know what they are up to. Conduct surprise audits to track performance of employees.

Organizations hire crisis communication specialists to overcome tough times as well as to maintain their
reputation and position in the market.

Crisis Management Team

Sequence of sudden unwanted events leading to major disturbances at the workplace is called crisis.
Crisis arises on an extremely short notice and triggers a feeling of fear and uncertainty in the employees.

It is essential for the superiors to sense the early signs of crisis and warn the employees against the
same. Once a crisis is being detected, employees must quickly jump into action and take quick decisions.

What is a Crisis Management Team ?

A Crisis Management Team is formed to protect an organization against the adverse effects of crisis.
Crisis Management team prepares an organization for inevitable threats.

Organizations form crisis management team to decide on future course of action and devise strategies
to help organization come out of difficult times as soon as possible.
Crisis Management Team is formed to respond immediately to warning signals of crisis and execute
relevant plans to overcome emergency situations.

Role of Crisis Management Team

Crisis Management team primarily focuses on:

Detecting the early signs of crisis.

Identifying the problem areas

Sit with employees face to face and discuss on the identified areas of concern

Prepare crisis management plan which works best during emergency situations

Encourage the employees to face problems with courage, determination and smile. Motivate them not
to lose hope and deliver their level best.

Help the organization come out of tough times and also prepare it for the future.

Crisis Management Team includes:

Head of departments

Chief executive officer and people closely associated with him

Board of directors

Media Advisors

Human Resource Representatives

The role of Crisis Management Team is to analyse the situation and formulate crisis management plan to
save the organization’s reputation and standing in the industry.

How does Crisis Management Team function ?

A Team Leader is appointed to take charge of the situation immediately and encourage the employees
to work as a single unit.

The first step is to understand the main areas of concern during emergency situations.
Crisis Management Team then works on the various problems and shortcomings which led to crisis at
the workplace. The team members must understand where things went wrong and how current
processes can be improved and made better for smooth functioning of the organization.

It is important to prioritize the issues. Rank the problems as per their effect on the employees as well as
the organization. Know which problems must be resolved immediately and which all can be attended a
little later.

A single brain cannot take all decisions alone. Crisis Management Team should sit with rest of the
employees on a common platform, discuss prevailing issues, take each other’s suggestions and reach to
plans acceptable to all.

One of the major roles of the Crisis management team is to stay in touch with external clients as well as
media. The team must handle critical situations well.

Develop alternate plans and strategies for the tough times. Make sure you have accurate information.
Double check your information before finalizing the plan.

Implement the plans immediately for results. Proper feedback must be taken from time to time.

Crisis Management team helps the organization to take the right step at the right time and help the
organization overcome critical situations.

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of this material is free for learning and education purpose. Please reference authorship of content used,
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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Ways to Overcome Organizational Crisis

Ways to Overcome Organizational Crisis

Sequence of unwanted events leading to uncertainty at the workplace is called as crisis. Crisis leads to
major disturbances at the workplace and creates unrest amongst the employees.

Employees must not lose hope during crisis. It is important for them to face inevitable threats with
courage, determination and smile.

Let us go through various ways to overcome crisis:

Adopt a focused approach. Take initiative and find out where things went wrong. Identify the problem
areas and devise appropriate strategies to overcome the same.

Gather correct and relevant information. One should not depend on mere guess works and assumptions
during emergency situations. Double check your information before submitting reports.

Employees should change their perspective. One should always look at the brighter side of things.
Remember life has its own ups and downs. Unnecessary cribbing and complaining does not help at the
workplace. Avoid making issues over petty things. Don’t adopt a negative attitude; instead understand
the situation and act accordingly.

Effective communication is essential to overcome crisis in the organization. Information must flow
across all departments in its desired form. Employees must be aware of what is happening around them.
Individuals should have an easy access to their superior’s cabin to discuss critical issues and seek their
suggestions. Superiors must address employees on an open forum during critical situations.

Roles and responsibilities must be delegated as per the employee’s specialization. Make sure the right
person is doing the right job. Employees must be motivated to deliver their level best and focus on the
organization’s goals to overcome tough times in the best possible way.

It is essential to take quick decisions during critical situations. Learn how to take risks. The moment an
employee detects the early signs of crisis, it is important for him to act immediately. Escalate issues to
your superiors and do inform your co workers as well. Don’t wait for others to take action.

Be calm and patient. Don’t panic and spread baseless rumours around. Taking unnecessary stress makes
situation all the more worse. Remember a calm individual can handle things better. Relax and then
decide on the future course of action to overcome crisis. Don’t lash out at others under pressure.

Discussions are essential during crisis. Sit with fellow workers and discuss issues amongst yourselves to
reach to mutually acceptable solutions which would work best at the times of crisis.

Be loyal to your organization even at the times of crisis. Stick to it during bad times. Don’t just treat your
organization as a mere source of earning money. It is important to respect your workplace.
Review your performance regularly. Be your own critic. Strive hard to achieve your targets within the
desired time frame. Don’t work only when your boss is around.

Avoid unnecessary conflicts and misunderstandings at the workplace. Treat your fellow workers as
members of your extended family. Help each other when needed. Employees should not ask for
unjustified things. Think from the management’s perspective as well. Avoid criticizing your colleagues.

Don’t hide at the times of crisis. Come out; interact with external clients as well as media. Do not
hesitate to ask for help. Ignoring outsiders worsens the situations.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content
Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter
Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use
of this material is free for learning and education purpose. Please reference authorship of content used,
including link(s) to ManagementStudyGuide.com and the content page url.

Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Managing Stress during Crisis

Managing Stress during Crisis

Crisis refers to a sequence of unwanted events leading to major disturbances at the workplace.

It triggers a feeling of insecurity and fear amongst the employees.

Crisis causes major harm to the organization and poses a threat to its reputation and brand image.

Let us go through various ways of managing stress during crisis:

Once a crisis is being detected, employees should immediately jump into action. Do not panic. Getting
hyper and nervous never lead to any solution; instead make the situation all the more worse.

It is essential for the individuals to stay calm at the times of crisis. One should not react over petty
issues. Remember a calm and composed individual can take better decisions than a stressed one.
Help your fellow workers during emergency situations. Dont lash out at others under pressure.
Criticizing others at the workplace is just not professional. Try to understand what the other person has
to say. Employees find it difficult to think logically under stress.

One should always look at the brighter sides of things. Adopting a negative attitude goes a long way in
increasing stress among individuals. Don’t take things to heart. It is best to ignore minor issues.

Job mismatch and overlapping of duties lead to stress during emergency situations. Roles and
responsibilities must be clearly defined as per the specialization of employees during crisis. Every one
should be very clear as to what is expected out of him.

Make individuals work as a team. Individuals working alone are generally overburdened and eventually
more stressed out. Let them work together and share ideas on various topics. Speaking out and
discussing issues reduce the stress level at the workplace.

It is absolutely okay to take short breaks at work even during emergency situations. Human beings are
not machines who can start and stop working just at the push of a button. They need time for
themselves. Working at a stretch can lead to fatigue and eventually individuals lose interest in work.
Short tea and snack breaks are necessary to reduce stress. During these breaks employees get time to
interact with each other.

Make necessary arrangements for individuals working at night. It is important for them to feel
comfortable at the workplace. Make sure individuals get dinner on time for them to deliver their level
best. There should be proper restrooms and places where employees can take a nap.

Light music also reduces stress to a large extent. Ensure the office is adequately lit. Dark cabins and
suffocated rooms increase stress and lead to a negative ambience at the workplace.

Encourage necessary motivation programs for the employees to make them face tough times with
determination and courage.

Make sure employees do not feel insecure during emergency situations. It is better to act immediately
as per the situation rather than complaining and cribbing. One should never lose hope even in the worst
conditions.

Appreciating the hard work of employees motivates them to perform better every time. Each employee
should get his /her due credit. Employees should stay away from blame games and nasty politics. Such
activities are considered highly unproductive and lower the morale and self confidence of the
employees.

Employees should be heard. Ignoring individuals results in stress and affects their performance.

Don’t try to do all things together. Adopt a step by step approach. Plan your work well. Managing time
effectively also reduces stress.
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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Role of Employees in Crisis Management

Role of Employees in Crisis Management

The art of managing an emergency situation at the workplace through effective planning and quick
action refers to crisis management. An unstable condition which leads to major disturbances at the
workplace must be controlled immediately for effective functioning of the organization.

Crisis Management helps the employees as well as organization to cope with difficult times in the best
possible way.

Employees play an essential role in crisis management:

Employees must be serious about their own work. Review your performance regularly. Don’t always
wait for your boss to ask for reports. Be your own critic. Strive hard to achieve your targets within the
desired time frame. Never adopt a casual attitude at work. An individual must be able to sense the early
signs of crisis and warn his fellow workers against the same. Take initiative on your own. Escalate issues
immediately to your seniors. Don’t wait for others to take action.

One should not take things lightly. Once a crisis is being detected, employees must immediately jump
into action.

Encourage effective communication during emergency situations. Don’t keep things to yourself. Discuss
ideas amongst your fellow workers to reach to a plan which would work best at the times of crisis.

Don’t spread baseless rumours about your product and organization. Avoid spreading fake information.

It is essential for the employees to respect their organization. One should maintain the decorum of the
organization. Enter office with a cool mind. Don’t unnecessarily fight fault in your coworkers and fight
with them. Remember conflicts lead to no solution. It is always better to discuss things face to face and
come to a mutually beneficial solution.

Don’t ask for unjustified things. Think from the management’s perspective as well. Remember your
organization pays you for your hard work and not for spreading negativity around. Employees should
never indulge in unproductive activities like boycotts or strikes to get their demands fulfilled. Violence at
the workplace is a crime. Neither the management nor the employee benefits out of it. Such activities in
turn tarnish the brand name.

Don’t panic. Maintain your calm and decide on the ways to overcome crisis rather than complaining and
cribbing. Employees should never get hyper as stress and anxiety lead to more mistakes one might not
otherwise commit. Relax and give your best.

Employees must rely on accurate information. Mere assumptions and guess works create problems and
misunderstandings later.

Think out of the box. Try to come out with innovative ideas and strategies to overcome tough times as
soon as possible. Employees must identify the causes of crisis and devise relevant strategies and ways to
avoid it.

Individuals must work as a single unit during emergency situations. Ensure free flow of information
across departments. Avoid playing blame games or criticizing others. It only makes situation worse.

Don’t hide, instead come out, interact with stake holders and external parties, and ask for help. One
must not avoid media.

Discrimination on the grounds of caste, status, income, sex and so on is unethical and leads to crisis.
Everyone must be treated as one for a peaceful environment at the workplace.

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Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Role of Leaders / Managers in Crisis
Management

Role of Leaders / Managers in Crisis Management

A sequence of sudden, unplanned and unexpected events leading to instability in the organization and
major unrest amongst the individuals is called as crisis.

Crisis generally arises on a short notice and causes major disturbances at the workplace.

Leaders and managers play an extremely important role during crisis.

One should lead from the front. Show confidence and steadiness. Take complete charge of the situation.

Managers should have full control on the employees. They should know what is happening around. Any
issue neglected in the initial stage might be a major concern later. Problems must be attended
immediately. One should not ignore even minor issues or wait for someone else to take the initiative.
Any issue left unattended might lead to crisis and major unrest later.

One should be alert at the workplace. A leader should be able to feel the early signs of crisis and warn
the employees against the negative consequences of the same. It is his duty to take precautionary
measures to avoid an emergency situation. A leader should be able to foresee crisis. Such a stage is also
called as Signal Detection.

Leaders must try their level best to prevent crisis. Encourage effective communication at the workplace.
Let employees discuss issues amongst themselves and come to the best possible alternative to
overcome crisis.

Ask the employees not to panic at the time of crisis. Encourage them to face the tough times with
courage, determination and smile. Make them work as a single unit. It is the duty of the leader to
provide a sense of direction to the employees.

The leaders should interact with the employees more often. Let them feel that you are there for them.
Impart necessary crisis management trainings to the employees.

Planning is essential to avoid emergency situations. Learn to take quick decisions. Make sure everyone
at the workplace is well informed about emergency situations.

Identify the important processes and systems which should keep functioning for the smooth running of
the organization. Develop alternate plans with correct and accurate information.

Don’t let negativity creep in the organization. Motivate the employees to believe in themselves and the
organization. It is essential to trust each other during such situations. Take strict action against those
spreading rumours and trying to tarnish organization’s image.

Don’t avoid stakeholders, external parties and most importantly media. Come out, meet them and
explain the whole situation. Ignoring people makes things worse. Develop strong partnerships with
external parties and ask for help.

Never lose hope. Be a strong pillar of support for your team members. They should be able to fall back
on you.

Leaders should strive hard to come out of tough times as soon as possible. Learn to take risks. Clarify the
roles and responsibilities of the individuals during this time.

Once the organization is out of crisis, it is the leader’s duty to communicate the lessons learnt so that
employees do not commit same mistakes again. Work hard and relive your organization’s image. Adapt
well to changes and new situations.
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Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use
of this material is free for learning and education purpose. Please reference authorship of content used,
including link(s) to ManagementStudyGuide.com and the content page url.

Crisis Management

Crisis Management - Introduction

Types of Crisis

Crisis Management Model

Crisis Management Plan

Crisis Communication

Crisis Management Team

Ways to Overcome Crisis

Managing Stress during Crisis

Role of Employees in Crisis

Role of Leaders in Crisis Management

Why Organizations need to Communicate Effectively During Crises

Home Library Organizational Behaviour Crisis Management Why Organizations need to Communicate
Effectively During Crises

Why Organizations need to Communicate Effectively During Crises

Many people think that corporate communication is all about glitzy press conferences in plush hotels
and the hosting as well as the wining and dining of media personnel and associated stakeholders.

However, there is more to corporate communications than coming up with glossy annual reports or
pithy press releases. For instance, the real mettle of the corporate communications team is tested
whenever organizations face crises and the way in which the well oiled machinery of the corporate
communications department or function responds to urgent need for communications often determines
how well the press and the public as well as governmental agencies perceive the organization�s efforts
in mitigating the crisis and the steps taken to address the crisis.

Let us take an example here. Say a prominent multinational or transnational organization has been
found violating the land use or the water use agreements it has with the local and the national
authorities.

Imagine how the media reacts once the scandal or the crisis breaks out and place yourself in the shoes
of the organization when confronted by angry members of the public and the other stakeholders.

In this scenario, the most important aspect is the speed as well as the credibility of the response. In
other words, the organization has to first assess where it stands and then come up with a credible and
authoritative response immediately so as to avoid “stoking the fires” of the simmering issue.

This has been the case with many organizations such as the TATA group and the American cola giants
when they faced allegations of violating the land use and the water usage agreements that they had
with the local and the national stakeholders.
In both these cases, the response was very credible and authoritative and pointed to the steps that the
respective organization had taken to mitigate the crisis as well as the need for all stakeholders to be
patient and not to resort to scaremongering and a “trial by the media”.

The last phrase is very crucial since, in these days of 24/7 breaking news culture, it is often the case that
the media in search of the next sensational news does not bother to fact check or even reach out to the
relevant stakeholders and instead airs the content as it is.

This is where the corporate communications team in organizations can come into the picture as the
senior members of the team must firs ensure that they talk to the organizational leadership, ascertain
what needs to be done, draft a response that accurately represents their stance on the issue and then
release the statement to the media.

Of course, as we shall discuss subsequently, this is not as simple as it sounds since it entails coordinating
with various stakeholders within the organization as well as outside or external agencies such as the
media houses and the governmental authorities before a statement can be issued.

For instance, whenever a crisis breaks, it is often the case that the organizational leaders themselves are
unprepared or “caught off guard” by the sheer speed with which the frenetic and the frenzied media
and public response erupts. So, the task of first ascertaining the facts lies with the leadership since most
of the time, the escalations of problems on the ground do not always reach the top leadership.

To take an example, when the worst industrial disaster in history, the Bhopal Gas Leak incident
happened, it was the case that there was no clear communication both top down as well as bottom up
leading to all sorts of confusing and contradictory responses emerging in the immediate aftermath of
the incident.

More recently, when the Malaysian Airlines flight MH370 disappeared, for a few hours, almost all
stakeholders were like “blind men and the elephant” that were guessing and speculating rather than
arriving at a coherent and cohesive response to the public.

The point here is that in these days of Twitter and Social Media, it is the anonymous public who often
break the story as well as add details and are on the lookout for updates. Therefore, unlike the earlier
eras, the corporate communications team cannot afford to simply “manage the media” which in other
terms means the print and visual media.
Instead, they now have to reckon with armies of social media users who often react with such alarming
speed that would put traditional journalists to shame for the sheer agility and pace.

Therefore, not only does the corporate communications team during crises have to coordinate
internally, but they also have to ensure that keep an eye on the social media feeds so that they can
respond accordingly.

Another important aspect of crisis communication arises whenever there are fatalities or deaths and
injuries to people.

For instance, whenever there is a terrorist attack, it is often the case that corporates come out with
statements that assure and reassure the stakeholders about the safety or their employees as well in the
unfortunate case of fatalities, quickly come up with a response detailing the steps that they are taking.

Indeed, it is during these times that the corporate communications team and the crisis communications
model is tested for its humanitarian aspects as well as the organizational leadership placed in the
spotlight for its commitment to the welfare of its employees.

Considering all these aspects, it is important to note that effective communications during crises often
determine how the organization is perceived. Since the impressions and the perceptions in our “always
on” digital culture are formed instantaneously, the imperatives of speed, accuracy and humaneness are
what matters during crisis communications.

What is Crisis Management?

Crisis management involves dealing with crises in a manner that minimizes damage and allows the
affected organization to recover quickly. Dealing properly with a crisis can be especially important for a
company’s public relations. Crises come in several forms and it is recommended in all cases that a
company be prepared ahead of time with a crisis management plan.
Crisis Management

Types of Crises

There are several types of crises that need critical attention with crisis management in mind:

1. Accidental Disasters

Accidental disasters are those that happen unintentionally by human cause. Fire is one example of
accidental disasters that can affect the workforce and can leave a lot of damage to the entire
organization. Especially in fields such as mining and construction that involve physical labor and
operation of large machinery, drastic accidents that can happen to the workforce in the performance of
their duties can lead to serious consequences.

2. Natural Disasters

Natural disasters are generally environmental crises that are beyond human ability to prevent.
Earthquakes, tornadoes, and floods are good examples of natural disasters.

3. Technology Disasters

A majority of undertakings in an organization involve technology in one way or another. In some cases, a
slight disruption in a company’s technology structure can cause all operations to come to a standstill.
Some technology crises can happen accidentally while others can be maliciously caused. Under
technology disasters, you will find examples such as:
Malevolence crisis – Criminal technology attack by opponents; hostile employees with malicious
intentions of destabilizing the organization

Cybercrime crisis – Intentional theft crime by technology

Critical virus attacks – Accidental or maliciously infected

4. Conflict of Interest Crisis

A crisis involving a conflict of interest can be very tricky to manage as it involves political factors. It does
not provide a particular step-by-step guide, as such crises tend to be unique each time. However, that
does not mean that there are no best practices and strategies that can be implemented. Some events
that would fall under a conflict of interest crises are:

Rumors – False news on an organization and its products. An example is spreading rumors that a certain
organization’s products are contaminated or defective. Bad news travels fast and once such a rumor is
started, intensive public relation strategies may need to be implemented to calm the fire. Such a rumor
can destroy an organization completely. So in these cases, companies can spend considerable sums to
keep their image clean.

Product tampering – Opponents can buy products of a rival company in volume, tamper them and then
release them into the market. This kind of strategy happens between business rivals who are malicious.
One example of product tampering happened to Pepsi Corporation in 1993 when there were claims of
syringes found in Diet Pepsi cans. After a thorough investigation and arrests of culprits, Pepsi
Corporation had to undertake an intense campaign to restore the public’s confidence in the company.

Headhunting – Pouching of top executives or senior management staff can happen between companies
that are neck-to-neck in competition. Business rivalry is the major reason for this kind of crisis.

Other types of crises include workforce violence and employees’ confrontation crises such as boycotting,
go-slow, picketing, and sit-ins with intentions of “arm twisting” the organization in meeting their
demands.

Such are the few of the many unforeseen problems a company can face. In all cases, the focus will be to
resolve the issue at hand and introduce structured means to prevent future occurrences.
Causes of Crises

The process used in tackling the crisis can depend on how the particular emergency arises. There are
two primary ways a disaster can arise, which are a sudden crisis and smoldering crisis.

1. Sudden Crisis

Sudden crises are uncontrollable. They happen and catch the organization stakeholders unaware. The
best examples of sudden crises are natural disasters that occur unexpectedly and without warning.

2. Smoldering Crisis

Just like smoldering fire, smoldering crises start slowly and quietly with a few to no signals at all. They
move in phases, and each stage must be contained and tackled in time before it develops into a greater
crisis and eventually evolving into a major disaster. An illustration of such crises is that of toxic work
behavior that eventually leads to turning the whole company culture sour.

Crisis Management Plan

To counter any looming crisis, a proper process and plan must be used for effective crisis management.
A crisis management plan is a documented outline of a process to follow for an organization to respond
effectively to a crisis.

Crisis management planning will focus mainly on building infrastructures that help the company negate
possibly risks and how to respond to crises should they occur. It also involves the organization workforce
and the crisis management team in testing the methods and having regular internal training on the
processes.
The following guidelines are recommended for establishing good crisis management plans:

Identify an individual from your workforce to take over crisis management role as a manager. Or, you
can employ a professional crisis manager who can help you in planning crisis management processes.

Initiate frequent training and refresher courses on handling crises. Drills and fake operations must
frequently take place to keep refreshing stakeholders on emergency responses to crises.

Form a crisis team to work under the leadership of a crisis manager. When a crisis occurs, this is the
team that should be able to respond quickly. A veteran of several training and drills for such
occurrences, it is expected to be in the frontline in directing other stakeholders on what to do and
where to assemble to avoid further accidents.

Planning responses and crisis management processes for various potential crises is highly
recommended. It takes several approaches and processes to address different crises.

Initiate systems that can effectively monitor or detect foreseeable crises signals early enough in order to
tackle the situation before it gets out of hand. Examples of such systems are smoke detectors that can
detect potential fire long before it gets out of hand.

Provide a list of key persons in case of a crisis and their contacts. The contact information must be
displayed where anyone can see and easily access them.

Identify the ground person to be notified immediately when a crisis occurs. Apart from a crisis manager,
there must be a coordinating person among employees who possess first-hand news on a looming crisis.
It should be the same person who can be trusted by his colleagues with vital information on any
suspected crisis.

Identify a central point where the employees can assemble and the exit points to use in case of a crisis.
Emergency exit doors with ease of opening them must be labeled well and an emergency central place
identified and properly labeled as well.

Regular testing of the crisis management process and emergency equipment and updating them
frequently or as needed.

Crisis Management Cycle

Final Takeaways

In any organization, whether it is small or large, problems or dangers are bound to happen that can
disrupt the smooth operations or affect it negatively. The organizational hazards, which can occur
unexpectedly and drastically, are capable of causing immense harm to its workforce or stakeholders.
Such occurrences can be defined as crises, and it is essential to manage them with efficiency and tact.

Crisis Management: Looking Back and Looking Ahead

By

Robert L. Pfaltzgraff, Jr.

Presented at

The Crisis Management Conference: Athena 2008

Organized by

The Hellenic Ministry of National Defence

July 2, 2008

Crises occur in all dimensions of human existence: between individuals, groups large and small,

and, of course, nations. We also have crises between human beings and nature in the form of

tornados, as well as forest fires such as those that took place in Greece in 2007. Crises may come

about as a result of natural disasters such as floods, hurricanes, earthquakes, and tsunamis.

To discuss the etymological origin of the word crisis, the term in English has Greek origins.

English language dictionary definitions of crisis offer several important insights: Medically, a

crisis is said to be the turning point for better or worse in the case of a patient. The patient either

takes a turn for the worse or begins to recover after perhaps coming close to death. A crisis is an

unstable or crucial time or state of affairs whose outcome will make a decisive difference for

better or worse. A crisis is an emotionally significant event in a person’s life – such as a

psychological crisis. There is the Chinese Mandarin character for crisis, which includes danger

and opportunity. This idea is especially useful because it conveys the fact that we may create

opportunities out of a situation that threatens us. Think, for example, of the economic crisis that

faced Europe just after World War II. Out of this crisis came the Marshall Plan, NATO, and the

European Union and unprecedented peace and prosperity in Europe. Danger gave way to

opportunity. Effective crisis management consists of the ability to snatch victory from the jaws

of defeat – to be able to look ahead with strategies and policy choices that enable us not only to

surmount present threats and dangers, but also to build a better future.

The definition of crisis put forward so far encompasses international relations and domestic

affairs, medicine and economics, crises between humans and efforts to cope with the forces of

nature. Therefore, the concept of crisis cuts across many fields, academic disciplines, and human

activities.

Nevertheless, the focus here is the political, and within the political, the international crisis,

although other types of crises are discussed below. Internationally, as the more general definition

suggests, the term crisis also refers to a turning point – between peace and war. Some analysts

have suggested that a crisis is a condition of neither peace nor war, but containing the elements

of both and having the potential for transformation from peace to war. The crisis can escalate to

war or it can be resolved or defused and thus the crisis can be de-escalated to a modus vivendi or

even a lasting peace between former adversaries.

Because a crisis is a threat to vital or core interests or values, the survival of the person or the

group, the corporation or the nation is likely to be at stake. A crisis may arise from a situation of

intensifying tensions or conflict that leads one party to take action against another party.

Escalating tensions may eventually transform a political relationship from one of peace to one of

war. There are also crises in which one side suddenly takes action to which the other must

respond or confront defeat. We faced this situation when North Korea invaded South Korea in

June 1950 or when the Soviet Union cut off the land access routes to West Berlin in 1948.

In this kind of crisis there is likely to be the element of surprise. Surprise may be either

“strategic” or “tactical”. We may be surprised in strategic terms about the event itself or
tactically, about when or where it will occur. Surprise comes about when the initiator of the crisis

conceals its planned action. There are many examples of such crisis surprise – the 9/11 attack in

2001, the Pearl Harbor attack in 1941, the Gulf War in 1991 when Saddam Hussein invaded

Kuwait, and the North Korean attack against South Korea in 1950. Surprise gives the initiator a

major short-term advantage if the victim is caught off guard. Surprise characterizes many other

types of crises as well. We are aware of the possibility of hurricanes, earthquakes, and tsunamis.

They are more prevalent during some times of the year than others. However, the actual event

may come very suddenly or in the case of hurricanes we may have a warning time of even a few

days, although the storm may change course several times before releasing its devastation, as we

saw in Hurricane Katrina that devastated the city of New Orleans in early September 2005.

However, as we know, storms may also come with little or no warning. Many thousands of

people had no prior warning before the December 2004 tsunami struck in South Asia.

In addition to surprise, crises may be the result of a failure of imagination – our inability to

connect the dots properly. What is unlikely is therefore not the focus of our preparatory efforts.

The unfamiliar becomes the improbable. We discard bits of information that would have enabled

us to prepare for the crisis if only we had been able to think “outside the box.” We lose or

overlook clues that would have given us advance warning. Even worse, we may deceive

ourselves into believing that, for example, because Arab states do not usually attack other Arab

states, Saddam Hussein would not attack Iraq or that Islamic fanatics would not commit suicide

by flying airplanes into buildings on 9/11 because previous hijackers had goals that did not

include the sacrifice of their own lives and the lives of the passengers. Therefore, surprise and

self deception are perhaps two sides of the same coin. Psychologists remind us that we bring to

decision-making the mindsets that draw on familiar patterns and discard that which is discordant.

We seek cognitive balance and shy away from cognitive dissonance. Decision-making groups

are prone to exclude information that contradicts or does not fit familiar patterns and to engage in

“groupthink “leading to conformity and the failure to look at new evidence. Members of a

decision-making unit may reinforce rather than question each other’s assumptions, analyses, and

recommended courses of action that in retrospect may turn out to have been fatally flawed.
A crisis is what political scientists have called a non-routine event – one of extraordinary

importance. Most of the decisions that we make as individuals or groups are routine – what time

to have lunch or when to go shopping or what kinds of military equipment to procure or when to

hold a major conference. We can generally take the time needed to make such decisions. In sharp

contrast, crises do not afford us this luxury. By their very nature as threats to vital interests or

core values, we must take action sooner rather than later. Otherwise, we may not survive the

crisis. Because of the fact that crises pose threats to core interests or values, they invariably bring

into play the top decision makers – the President of the United States, the Prime Minister of

Greece, the defense minister, the foreign minister, the senior military leadership. In the case of a

business corporation it is invariably the top leadership. In a medical crisis, we seek the leading

medical specialists and treatments and wherever possible bring them together to help us

determine the best course of action out of the medical crisis.

The term crisis management had its origins in the Cold War, even though in fact we have been

dealing with crises throughout history. Our Cold War goal was to manage crises with the Soviet

Union so that they did not escalate to nuclear war. Crisis management became both the means

and the goal because all such crises had the potential to get out of control, which of course we

wanted to avoid because nuclear war could have ended civilization as we know it. We had

several defining Cold War crises, none of which was more threatening than the Cuban Missile

Crisis. Both sides had nuclear weapons on alert that could have been used had the crisis escalated

to a higher level.

However, the term crisis management is not fully adequate to describe crisis decision-making.

We need to draw the important distinction between crisis leadership and crisis management.

Crisis leaders decide what is to be done. Managers decide how it is to be done. Crisis leaders set

the course of action to be followed, operating at the strategic level. Crisis managers have the

operational and tactical-level tasks of making sure that what has been decided at the highest level

actually gets done. Of course, the distinction between crisis leadership and crisis management

can be blurred. The greatest and best leaders may also be good managers. Crisis managers must

also often take leadership roles because they may have to take quick and bold action without the
luxury of precise instructions from their leaders. Crisis leadership is deciding what is to be done

and making sure that everyone down the chain of command is working from the same sheet of

music. Otherwise, we would have a decision-making process akin to a fine academic seminar

that results in excellent discussion, debate, and policy options – but no more – if the results in the

form of decisions are not communicated to the field where their impact is to be felt as they are

acted upon. Effective crisis management begins with a process that produces the best decisions

and then sees that they are followed down the chain of command.

Crisis management is stressful because of the nature of crises as major threats to nations, groups,

or individuals – threats to the body politic or the human body – to the state or the corporation.

Crisis leaders and managers may face periods of fatigue and exhaustion because they work under

deadlines and the risks and dire consequences of failure. Because the time available for decisive

action may be short, they may have to act with inadequate information. As time lapses after the

event, we know more and more about it. For example, there is probably no natural disaster or

other crisis in which initial estimates of casualties were not revised as we learned more about it.

At the time of 9/11 the initial reaction was that an aircraft had mistakenly flown into the World

Trade Center building. This is well described in the 9/11 Commission Report, which makes

fascinating reading on many of the issues of crisis management.

Just as intelligence indicators in advance of a crisis may be lacking or, if they even exist, may be

discarded or ignored, we are likely to have inadequate information immediately after the crisis

hits us. We can only react with what we know, and what we know many not be sufficient but it is

all that we have. This is an important point, because we often look back on crises with the benefit

of hindsight as well as information and insights that were lacking at the time of the crisis.

Crisis management requires the ability to draw on a large number of capabilities depending on

the type of crisis. Crisis management brings into play a broad range of people, organizations,

capabilities, and perspectives that otherwise may be seen as separate and unconnected with each

other.

These capabilities may include medical personnel, military forces, firefighters, police, airport

security teams, and other resources for the protection of vital infrastructure, among many others.
Crisis management capabilities may consist of military forces (armies, navies, air forces, and

specialized units), diplomacy and diplomats, and intelligence collection and analysis. The

capabilities for response to a terrorist incident are often the same ones that are needed for a

natural disaster: transport for the evacuation of casualties, as well as food, water, medical

supplies, and warning systems designed to alert people to get out of harm’s way. Therefore, our

ability to cope with a natural disaster may be indicative of our ability to respond effectively to a

manmade crisis such as a weapons-of-mass-destruction attack. Such response capabilities are

what we call consequence management.

Crises have certain timeless characteristics that can be discussed wherever or whenever they

occur. Crises are messy, unstructured affairs in which our ability to manage will never be perfect

because crisis leaders and crisis managers usually lack intelligence information and, in the case

of political crises, we face an enemy who usually seek to deceive or confuse us. Therefore, to

predict when, where, or how a crisis will erupt remains more an art form than a science. We can

best prepare for crises by having a range of capabilities that will be needed in almost any crisis.

This has been called capabilities-based planning. We can also develop information and warning

systems. We can also engage in planning that brings together departments, offices, personnel,

agencies, and decision makers for simulations. Such exercises can be invaluable planning tools.

Actual plans or scenarios themselves may be useless when the event occurs because seldom does

the scenario fully resemble the real event. Nevertheless, planning as a process is essential. Those

who will have to act together in a future crisis can gain valuable experience and expertise by

crisis exercises that help them to get to know and work effectively with their counterparts in

other departments and agencies and their opposite number in other countries.

As we look back, crises have been a part of the personal, domestic, and international landscape

from time immemorial, from the ancient world to the twenty-first century. Thucydides described

a crisis between Athens and Sparta that resulted in the Peloponnesian War (431-404 BC). With

the end of the Cold War we have faced a variety of crises, for example, in Southeastern Europe

and elsewhere in the 1990s and into the first decade of this century. Most of the 1990s crises

posed threats to our values, leading us to seek international participation in peacekeeping, peace
enforcement, and other international interventions designed to end, prevent, or de-escalate
ethnoreligious and other conflicts. We were unprepared to allow the continued slaughter of civilians

after we saw on our television screens these grisly events in Bosnia and elsewhere. Here is an

example of the power of the media shaping crisis management.

With 9/11 and the twenty-first century we have entered another phase of crisis management in

which we find increased importance for non-state actors, including terrorists who may gain

access to weapons of mass destruction – the most dangerous people in possession of the world’s

most dangerous weapons. In anticipation, we have made extensive preparations for consequence

management – coping with the effects of a terrorist incident, in which dealing with the

consequences is itself crisis management.

Looking ahead, we have a crisis landscape that contains unprecedented numbers of actors in

possession of unprecedented capabilities for creating crises. This includes cyber attacks that

could create disruptions in our vital infrastructure, producing cyber-crises in the years ahead. We

have already witnessed Russian efforts to engage in cyber attacks against the advanced

information infrastructure of neighboring Estonia and Lithuania. There also remain numerous

state-to-state crisis flashpoints, especially in East Asia and the Middle East. Terrorist crises could

come about in our cities as we have seen in New York as well as Madrid and London in recent

years. We have a complex global crisis map. In some regions there remains not only great

potential for state-to-state crises, but also other types of crises between subnational and

transnational groups and terrorist organizations, perhaps with nuclear, biological, or chemical

weapons.

Finally, as we look ahead, it is appropriate to consider other key focal points for crisis

management:

● First – on the role of the media in crisis management, it is indispensable that as part of

crisis management we have a media strategy in an era of the 24-hour news cycle and the

Internet. The public must be kept informed, often on an hourly basis, and by the

leadership itself whenever possible. People want to be reassured that those in charge

know what they are doing and are prepared to communicate information to a public that
is hooked in as never before, thanks to twenty-first-century communications. The media

strategy must convey the competence of crisis leaders and managers in addressing the

crisis. Messages must be consistent. Somehow we must tread the narrow line between

providing accurate, up-to-date information while not spreading alarm that leads to panic.

Without a media strategy, crisis management will fail.

● Second – the crisis map extends across the Balkans and the Middle East. We should

highlight not only lessons learned from the 1990s experience, but also the extent to which

Russia, as a state returning to the world stage, will reengage in and near the region and

what this may mean for future crises. Key questions come to mind. For example, could

we have altered the course of events had the United States and its NATO allies, as well as

the broader international community, been prepared to intervene earlier and more

forcefully in Southeastern Europe in the 1990s? What do we need to do in the years

ahead to minimize the prospect for renewed crises in this volatile region?

● Third – an understanding of the Middle East will be incomplete without reference to the

potential for crisis from the development and deployment of an Iranian nuclear capability

that international efforts have not been able so far to halt. There exists the ominous

potential for an escalating crisis resulting in a military strike against Iran’s nuclear

infrastructure. Moreover, the rearming of Hamas and Hezbollah by Iran could produce

another crisis with Israel. All of the rockets used by Hezbollah against Israel in 2006 have

been replaced with more advanced and more numerous capabilities. In other words, there

have been both quantitative and qualitative improvements in such weapons. To this crisis

map should be added the vast Asia-Pacific area, including the Korean peninsula and

Taiwan-Mainland China, as well as India-Pakistan. The potential for terrorist acquisition

not only of weapons of mass destruction, but also seizing power in a failed state such as

happened in Afghanistan that becomes a base for international terrorist operations, adds

yet another troubling dimension to our twenty-first-century crisis map. Therefore, no

region of the world is out of bounds for twenty-first-century crises.

International organizations have an important place in crisis management. Such potential roles
should be neither denigrated nor exaggerated. International organizations can help to identify

early warning indicators of impending crises. The International Atomic Energy Agency has

provided detailed information about Iran’s nuclear program. International organizations can also

play a key role in the de-escalatory phase of a crisis by providing good offices and mediation but

usually only if both sides seek their help. Of course, international organizations such as the

United Nations can and do engage in planning for the use of international capabilities, including

military units, in humanitarian crises, helping to coordinate or helping to coordinate disaster

response efforts.

Last but not least, while the focus of crisis management is inevitably and invariably on the

government because it has as a basic duty and obligation the protection of its citizens, the objects

of attack nearly always include private sector infrastructure. Furthermore, civilians outside of

government are likely to be at much greater risk than military personnel as we look ahead.

Civilian casualties usually far exceed military personnel losses in the wars of the last century.

Civilians are the principal targets or objects across a broad spectrum of crises as we saw in 9/11

and in the case of natural disasters. The military invariably represent our first line of defense,

along with other first responders. First responders are likely to include military personnel as well

as civilians from government agencies and the private sector. Therefore, the ability not only to

work with nongovernmental organizations, but also to bring into greater focus the private sector,

including industry, medical personnel, and others, is essential to twenty-first-century crisis

management.

In the final analysis, we live in a crisis setting in which surprise will remain a defining feature of

crises and the only surprise about the future will be the absence of surprise. Although there is

much that we do not (and cannot) know, we can be certain that we will face a broad spectrum of

likely crises for which we will need to maintain core capabilities that are agile, flexible, and

adaptable if we are both to respond to future crises and help shape the future – to turn danger into

opportunity.
THE HANDBOOK OF CRISIS COMMUNICATION EDITED BY W. TIMOTHY COOMBS AND SHERRY J
HOLLADAY

Organizations frequently find themselves in situations we would define as a crisis.

The reality of crises leads to the need for preparation and readiness to respond – crisis management.
The critical component in crisis management is communication. Over the past decade, there has been a
massive increase in crisis communication research.

there is no one, universally accepted definition of crisis. You will also note many conceptual similarities
in the definitions even when the definitions are not exactly the same. Box 1.1 lists commonly used crisis
definitions. The list contains definitions from well-known crisis authors as well as covering a range of
disciplines, including public relations, management, and organizational communication. One point is
worth discussing before offering the crisis definition utilized in this chapter. Three definitions note that
crises can have positive or negative outcomes. People frequently claim that the Chinese symbol for crisis
represents both

Box 1.1 Definitions of Crisis

a major occurrence with a potentially negative outcome affecting an organization, company, or industry,
as well as publics, products, services or good name. It interrupts normal business transactions and can
sometimes threaten the existence of the organization (Fearn-Banks 1996: 1)

is not necessarily a bad thing. It may be a radical change for good as well as bad” (Friedman 2002: 5)

an event that affects or has the potential to affect the whole of an organization. Thus, if something
affects only a small, isolated part of an organization, it may not be a major crisis. In order for a major
crisis to occur, it must exact a major toll on human lives, property, financial earnings, the reputation, and
the general health and wellbeing of an organization” (Mitroff & Anagnos 2001: 34–35)

turning points in organizational life” (Regester 1989: 38)

an incident that is unexpected, negative, and overwhelming” (Barton 2001: 2)

a specific, unexpected and non-routine organizationally based event or series of events which creates
high levels of uncertainty and threat or perceived threat to an organization’s high priority goals” (Seeger,
Sellnow, & Ulmer 1998: 233)

turning point for better or worse” (Fink 1986: 15)

an event that is an unpredictable, major threat that can have a negative effect on the organization,
industry, or stakeholders if handled improperly” (Coombs 1999: 2)
It is also important to separate crises from incidents (Coombs 2004b). Practitioners often take issue with
how loosely the term crisis is bandied about. Crisis should be reserved for serious events that require
careful attention from management. This belief stems from the fact that the label “crisis” in an
organization results in the allocation of time, attention, and resources (Billings, Milburn, & Schaalman
1980). The majority of the crisis definitions reflect the need to reserve the term crisis for serious events.
So the event has to have the potential to seriously impact the organization. But the definition should not
be viewed as limiting potential harm only to the organization. Harming stakeholders has to rate as the
most significant “negative outcome.” The definition uses “negative outcomes” to include any type of
harm to stakeholders, including physical, financial, and psychological. Potential is used because actions
taken by crisis managers may prevent a crisis or significantly reduce the damage one can inflict. Crisis
management is more than reaction; it can be prevention and preparation too. Finally, the definition
reinforces the role of stakeholders in the crisis through the idea of anomalies. Crises are unusual
occurrences that cannot be predicted but are expected. True, managers should anticipate crises can
occur and on any given day numerous organizations have crises. The analogy between crisis and
earthquakes is fitting.

However, all crises are anomalies because they violate what stakeholders expect.

It is this anomalous dimension of crises that draws the attention of the media and other stakeholders.
Crises are unusual negative events, so humans are drawn to them just like people on the highway gawk
at accidents.

Crisis management can be defined as “a set of factors designed to combat crises and to lessen the actual
damages inflicted” (Coombs 2007b: 5) . Moreover, crisis management “seeks to prevent or lessen the
negative outcomes of a crisis and thereby protect the organization, stakeholders, and/or industry from
damage” (Coombs 1999: 4). We should think of crisis management as a process with many parts, such as
preventative measures, crisis management plans, and post-crisis evaluations. The set of factors that
constitute crisis management can be divided into three categories: pre-crisis, crisis, and post-crisis. Pre-
crisis involves efforts to prevent crises and to prepare for crisis management. Crisis is the response to an
actual event. Post-crisis are efforts to learn from the crisis event (Coombs 2007b). These three
categories reflect the phases of crisis management and are useful because they provide a mechanism
for considering the breadth of crisis communication.

Fink (1986) was among the first to examine crises as occurring in stages. Fink’s model has four stages: (1)
prodromal, warning signs of a crisis appear; (2) acute, a crisis occurs; (3) chronic, recovery period that
can include lingering concerns from the crisis; and (4) crisis resolution, the organization is back to
operations as normal.

The crisis management process can be organized around the simple, three phase model introduced
earlier: pre-crisis, crisis, and post-crisis. Pre-crisis includes signal detection, prevention, and preparation.
Crisis covers recognition of the trigger event and response. Post-crisis considers actions after operations
have returned to normal and include providing follow-up information to stakeholders, cooperating with
investigations, and learning from the crisis event (Coombs 2007b).
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ANALYSING LIKERT SCALE/TYPE DATA.

1. Motivation. Likert items are used to measure respondents’ attitudes to a particular question or
statement. To analyse the data it is usually coded as follows. • 1 = Strongly disagree • 2 = Disagree • 3 =
Neutral • 4 = Agree • 5 = Strongly agree One must recall that Likert-type data is ordinal data, i.e. we can
only say that one score is higher than another, not the distance between the points. 2. Basic analysis
With Likert scale data we cannot use the mean as a measure of central tendency as it has no meaning
i.e. what is the average of Stronly agree and disagree? The most appropriate measure of is the mode the
most frequent responses, or the median. The best way to display the distribution of responses i.e. (%
that agree, disagree etc) is to use a bar chart. 2.1. Inference.. To test hypotheses one must initially think
carefully about the questions you are trying to answer. Once you have identified your hypotheses, you
will have a dependent variable, that which is measured and your independent variable/s that which
defines your groups. Analysis of variance techniques include; • Mann Whitney test. • Kruskal Wallis test.
Data may also be combined into say two nominal categories Agree/Accept and Disagree/Reject, which
allows us to carry out the; • Chi-square test. 3. Likert scale. A Likert scale is composed of a series of four
or more Likert-type items that represent similar questions combined into a single composite
score/variable. Likert scale data can be analyzed as interval data, i.e. the mean is the best measure of
central tendency. 3.1. Inference.. Parametric analysis of ordinary averages of Likert scale data is
justifiable by the Central Limit Theorem, analysis of variance techniques incude; • t-test. • ANOVA. •
regression procedures 4. Design considerations. The data analysis decision for Likert items should be
made at the questionnaire development stage. • If you have a series of individual questions that have
Likert response options for your participants to answer - then analyze them as Likert-type items i.e.
Modes, medians, and frequencies. • If you have a series of Likert-type questions that when combined
describe a personality trait or attitude - use means and standard deviations to describe the scale. 1 2
ANALYSING LIKERT SCALE/TYPE DATA. 5. Distortion. Likert scales are subject to distortion from several
causes; • Avoidance of using extreme response categories - central tendency bias. • Agreeing with
statements as presented acquiescence bias. • Attempt to portray themselves or their organization in a
more favorable light social desirability bias. 6. Likert scale Regression Analysis. If your dependent
variable is on a likert scale you should run either; • Ordered logistic regression, or; • Multinomial logistic
regression. Alternatively collapse the levels of the Dependent variable into two levels and run binary
logistic regression. You should not use linear regression as linear regression requires a continuous
dependent variable. • What information is necessary? At the end of the process, what data do you hope
to have? What information is necessary for a decision? Separate ”need to know” from ”nice to know”
information.

Likert Scale Definition, Examples and Analysis

By Saul McLeod, updated 2019

What is a Likert Scale?

Various kinds of rating scales have been developed to measure attitudes directly (i.e. the person knows
their attitude is being studied). The most widely used is the Likert scale (1932).

In its final form, the Likert scale is a five (or seven) point scale which is used to allow the individual to
express how much they agree or disagree with a particular statement.

For example:

I believe that ecological questions are the most important issues facing human beings today.

likert scale agreement

A Likert scale assumes that the strength/intensity of an attitude is linear, i.e. on a continuum from
strongly agree to strongly disagree, and makes the assumption that attitudes can be measured.

For example, each of the five (or seven) responses would have a numerical value which would be used
to measure the attitude under investigation.

Likert Scale Examples for Surveys

In addition to measuring statements of agreement, Likert scales can measure other variations such as
frequency, quality, importance, and likelihood, etc.

Agreement

Strongly Agree

Agree

Undecided

Disagree

Strongly Disagree

Frequency

Always

Often

Sometimes

Rarely

Never

Importance

Very Important

Important

Moderately Important

Slightly Important

Unimportant

Quality
Excellent

Good

Fair

Poor

Very Poor

Likelihood

Almost Always True

Usually True

Occasionally True

Usually Not True

Almost Never True

Likelihood

Definitely

Probably

Possibly

Probably Not

Definitely Not

For a complete table of Likert scale examples click here.

How can you analyze data from a Likert scale?

The response categories in Likert scales have a rank order, but the intervals between values cannot be
presumed equal.

Therefore, the mean (and standard deviation) are inappropriate for ordinal data (Jamieson, 2004)

Statistics you can use are:

• Summarize using a median or a mode (not a mean as it is ordinal scale data ); the mode is probably the
most suitable for easy interpretation.

• Display the distribution of observations in a bar chart (it can’t be a histogram, because the data is not
continuous).

Critical Evaluation

Strengths

Likert Scales have the advantage that they do not expect a simple yes / no answer from the respondent,
but rather allow for degrees of opinion, and even no opinion at all.

Therefore quantitative data is obtained, which means that the data can be analyzed with relative ease.

Offering anonymity on self-administered questionnaires should further reduce social pressure, and thus
may likewise reduce social desirability bias.

Paulhus (1984) found that more desirable personality characteristics were reported when people were
asked to write their names, addresses and telephone numbers on their questionnaire than when they
told not to put identifying information on the questionnaire.

Limitations

However, like all surveys, the validity of the Likert scale attitude measurement can be compromised due
to social desirability.

This means that individuals may lie to put themselves in a positive light. For example, if a Likert scale
was measuring discrimination, who would admit to being racist?

Download this article as a PDF

How to reference this article:

McLeod, S. A. (2019, Aug 03). Likert scale. Simply Psychology. https://www.simplypsychology.org/likert-

scale.html
References

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How to analyze Likert and other rating scale dataSpencer E. Harpe,

2015

In the early-to-mid 20th century, researchers developed various scaling

methods to measure the relative strength or degree of psychological
phenomena, such as mental abilities and attitudes.17 As Stevens put rather
simply, scaling was a process to assign a number to objects using some
rule.16 Through defining measurement scales, any phenomenon could be
“quantified.” The development of methods to measure attitudes resulted in
several noteworthy scaling methods including Thurstone scales, Guttman
scales, and Likert scales.18 Likert scales can be included in a larger group of
measures that are sometimes referred to as summated (or aggregated) rating
scales, since they are based on the idea that some underlying phenomenon can
be measured by aggregating an individual’s rating of his/her feelings,
attitudes, or perceptions related to a series of individual statements or items.
Other types of rating scales that are commonly seen include numeric rating
scales and adjectival rating scales. Examples of these general types of
measurement tools are provided in Figure 1. While there are other
measurement options, such as semantic differential scales, visual analog
scales, fractionation, and constant sums,19 these are not frequently seen in
educational scholarship and will not be discussed here. It is worthwhile to
note the role of Rasch models in measurement. These models provide
important alternative to Stevens’ approach to scaling (i.e., assigning numbers
to objects or categories) and the associated levels of measurement and are
being used in educational measurement.20, 21, 22
1. Download : Download high-res image (503KB)
2. Download : Download full-size image
Fig. 1. Examples of rating scales and response formats as they may be presented
to respondents.
Likerta scales are a common measurement method in educational
contexts.23 His approach involved the presentation of a set of selected items
that together measured one trait, such as satisfaction with a teaching method.
Each item was a declarative statement. For each item, the response set
consisted of a set of equally spaced numbers accompanied by approximately
equally spaced anchors (Fig. 1A). In the original version, Likert used five
options, which included a neutral option.24 The response format has since been
expanded to varying numbers of response options including removing the
neutral category.18, 19, 25, 26 In his original article, Likert proposed that the
distances between the numbers in the response set were equal. Similarly, the
distances between the anchors (e.g., “Strongly Approve” to “Approve”) were
equal.24 From a statistical standpoint, this suggested an interval level of
measurement. Rather than analyzing the individual items, Likert combined
the individual items via summation or taking the arithmetic mean. By taking
the sum or arithmetic mean of the responses to a set of items, Likert scales
might arguably be an interval-level measure under Stevens’ measurement
framework. Likert held that the underlying phenomenon of interest, say
satisfaction with teaching, was being measured by an individual’s responses to
the entire set of items. This is an important point to make. An individual item
using a Likert response format (i.e., a Likert item) is not a Likert
scale.10, 11, 24, 27, 28 Likert scales are a set of items used together. The
important difference between the item and the aggregate scale has resulted in
a great deal of controversy surrounding “best” or acceptable analytical
approaches. Over time, the use of Likert’s technique has drifted away from
strictly measuring a respondent’s level of approval or agreement with
statement and may look at frequency (e.g., Never, Sometimes, Often, and Very
often) or importance (e.g., Not at all important, Unimportant, Somewhat
important, and Very important). Uebersax suggests that these latter examples
be referred to as “Likert-type scales” as long as they refer to a set of items that
are summed or averaged, are presented horizontally with equally spaced
integers, and are presented with labels that are approximately of equal
spacing.28

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A discussion of Likert scales would be remiss without addressing another common issue—
pronunciation. Many of us probably learned that his name was pronounced as “LIKE-urt.” Likert’s
name is properly pronounced as “LICK-urt”25 (p45) so it should more like “sticker” than “hiker.”
b
 An important note related to terminology is warranted here. The data themselves are neither
parametric nor nonparametric. Statistical tests can be classified as parametric (e.g., t test) or
nonparametric (e.g., Mann–Whitney U test). Statements like, “The data are parametric,” are
incorrect; however, one can correctly say, “The data follow a normal distribution.”

APPLIED STATISTICS AND PROBABILITY FOR ENGINEERS 6 TH EDITION DOUGLAS C. MONTGOMERY,

GEORGE C RUNGER PUBLISHED BY JOHN WILEY & SONS 2014

ANALYSIS OF VARIANCE Suppose that we have a different levels of a single factor that we wish to
compare. Sometimes, each factor level is called a treatment, a very general term that can be traced to
the early applications of experimental design methodology in the agricultural sciences. The response for
each of the a treatments is a random variable. The observed data would appear as shown in Table 13-2.
An entry in Table 13-2, say yij, represents the jth observation taken under treatment i. We initially
consider the case that has an equal number of observations, n, on each treatment. We may describe the
observations in Table 13-2 by the linear statistical model

i , , ,a j , , ,nij i ij =μ+ τ + = … = … ⎧ ⎨ ⎩ e 12 12 (13-1) where yij is a random variable denoting the () ij th

observation, μ is a parameter common to all treatments called the overall mean, τi is a parameter
associated with the ith treatment called the ith treatment effect, and eij is a random error component.
Notice that the model could have been written as

i,, ,a j , , ,nij i ij =μ + = … = … ⎧ ⎨ ⎩ e 12 12

where μ μ+ τ ii = is the mean of the ith treatment. In this form of the model, we see that each treatment
defines a population that has mean μi consisting of the overall mean μ plus an effect τi that is due to
that particular treatment. We assume that the errors eij are normally and independently distributed
with mean zero and variance σ2. Therefore, each treatment can be thought of as a normal population
with mean μi and variance σ2. See Fig. 13-1(b).

FIGURE 13-1 (a) Box plots of hardwood concentration data. (b) Display of the model in Equation 13-1 for
the completely randomized single-factor experiment.

50

5
10

15

20

10 15 20

25

30

Hardwood concentration (%)

Tensile strength (psi)

(a)

mt 1+ m 1

mt 2+ m 2

mt 3+ m 3

mt 4+ m 4

s2

(b)

s2

s2

s2

Section 13-2/Completely Randomized Single-Factor Experiment 543

Equation 13-1 is the underlying model for a single-factor experiment. Furthermore, because we require
that the observations are taken in random order and that the environment (often called the
experimental units) in which the treatments are used is as uniform as possible, this experimental design
is called a completely randomized design (CRD). The a factor levels in the experiment could have been
chosen in two different ways. First, the experimenter could have specifi cally chosen the a treatments. In
this situation, we wish to test hypotheses about the treatment means, and conclusions cannot be
extended to similar treatments that were not considered. In addition, we may wish to estimate the
treatment effects. This is called the fi xed-effects model. Alternatively, the a treatments could be a
random sample from a larger population of treatments. In this situation, we would like to be able to
extend the conclusions (which are based on the sample of treatments) to all treatments in the
population whether or not they were explicitly considered in the experiment. Here the treatment effects
τi are random variables, and knowledge about the particular ones investigated is relatively unimportant.
Instead, we test hypotheses about the variability of the τi and try to estimate this variability. This is
called the random-effects, or components of variance model. In this section, we develop the analysis of
variance for the fi xed-effects model. The analysis of variance is not new to us; it was used previously in
the presentation of regression analysis. However, in this section, we show how it can be used to test for
equality of treatment effects. In the fi xed-effects model, the treatment effects τi are usually defi ned as
deviations from the overall mean μ, so that τ= = ∑ i i a 0 1 (13-2) Let yi. represent the total of the
observations under the ith treatment and yi. represent the average of the observations under the ith
treatment. Similarly, let y.. represent the grand total of all observations and y.. represent the grand
mean of all observations. Expressed mathematically,

y y y y n i , , ,a

yyyy

i ij j n

ii

ij

.= .= . = ...

..= ..=

== ∑ ∑∑

11

12/

... / N (13-3)

where N an = is the total number of observations. Thus, the “dot” subscript notation implies summation
over the subscript that it replaces. We are interested in testing the equality of the a treatment means μ
μ μ 12 , ,..., a. Using Equation 13-2, we fi nd that this is equivalent to testing the hypotheses HH ai 0 1 2 1
:0:0foratleastone τ = τ =⋅⋅⋅= τ = τ ≠ i (13-4) Thus, if the null hypothesis is true, each observation consists
of the overall mean μ plus a realization of the random error component eij. This is equivalent to saying
that all N observations are taken from a normal distribution with mean μ and variance σ2. Therefore, if
the null hypothesis is true, changing the levels of the factor has no effect on the mean response.

5"#-&t13-2 Typical Data for a Single-Factor Experiment

Treatment Observations Totals Averages 1 y11 y12 … y n 1 y1. y1. 2 y21 y22 … y n 2 y2. y2.

a ya1 ya2 … yan ya. ya. y.. y1..

544 Chapter 13/Design and Analysis of Single-Factor Experiments: The Analysis of Variance

The ANOVA partitions the total variability in the sample data into two component parts. Then, the test
of the hypothesis in Equation 13-4 is based on a comparison of two independent estimates of the
population variance. The total variability in the data is described by the total sum of squares SS y y T ij j n
i a = − .. () == ∑∑ 2 11 The partition of the total sum of squares is given in the following definition.

The sum of squares identity is

y y n y y y y ij

ij i

− .. () = .− .. () + − . () ==== = ∑∑∑∑ 2 11 2 1 2 11 aa ∑ (13-5) or symbolically SS SS SS TE =+ Treatments

(13-6)
ANOVA Sum of Squares Identity: Single Factor Experiment

The expected value of the treatment sum of squares is

E SS a n i i a Treatments () =− ()σ + τ = ∑1 22 1 and the expected value of the error sum of squares is E SS
a n E ()=− () σ1 2

Expected Values of Sums of Squares: Single Factor Experiment

The identity in Equation 13-5 shows that the total variability in the data, measured by the total
corrected sum of squares SST, can be partitioned into a sum of squares of differences between
treatment means and the grand mean called the treatment sum of squares, and denoted SSTreatments
and a sum of squares of differences of observations within a treatment from the treatment mean called
the error sum of squares, and denoted SSE. Differences between observed treatment means and the
grand mean measure the differences between treatments, and differences of observations within a
treatment from the treatment mean can be due only to random error. We can gain considerable insight
into how the analysis of variance works by examining the expected values of SSTreatments and SSE. This
will lead us to an appropriate statistic for testing the hypothesis of no differences among treatment
means (or all τ = i 0).

There is also a partition of the number of degrees of freedom that corresponds to the sum of squares
identity in Equation 13-5. That is, there are an N = observations; thus, SST has an −1 degrees of freedom.
There are a levels of the factor, so SSTreaments has a −1 degrees of freedom. Finally, within any
treatment, there are n replicates providing n −1 degrees of freedom with which to estimate the
experimental error. Because there are a treatments, we have an() −1 degrees of freedom for error.
Therefore, the degrees of freedom partition is an a a n − = − + − ( ) 1 1 1 The ratio MS SS a Treatments
Treatments =− ()/ 1 is called the mean square for treatments. Now if the null hypothesis H0 1 2 : τ = τ =
⋅⋅⋅= τ = a 0 is true, MSTreatments is an unbiased estimator of σ2 because τ= =∑ i i a 0 1 . However, if H1 is
true, MSTreatments estimates σ2 plus a positive term that incorporates variation due to the systematic
difference in treatment means.

Section 13-2/Completely Randomized Single-Factor Experiment 545

Note that the mean square for error MS SS a n EE =− ()⎡ ⎣ ⎤ ⎦/ 1 is an unbiased estimator of σ2 regardless
of whether or not H0 is true. We can also show that MSTreatments and MSE are independent.
Consequently, we can show that if the null hypothesis H0 is true, the ratio

SS a SS a n

MS MSE E0 1 1 = − () − ()⎡ ⎣ ⎤ ⎦ =Treatments Treatments / /

(13-7)

ANOVA F-Test

The sums of squares computing formulas for the ANOVA with equal sample sizes in each treatment are
SS y y N T ij j n i a =− .. == ∑∑ 2 2 11 (13-8) and SS y n y N i i a Treatments = . − .. = ∑ 22 1 (13-9) The error
sum of squares is obtained by subtraction as SS SS SS ET =−Treatments (13-10)
Computing Formulas for ANOVA: Single Factor with Equal Sample Sizes

has an F-distribution with a −1 and an() −1 degrees of freedom. Furthermore, from the expected mean
squares, we know that MSE is an unbiased estimator of σ2. Also, under the null hypothesis,
MSTreatments is an unbiased estimator of σ2. However, if the null hypothesis is false, the expected
value of MSTreatments is greater than σ2. Therefore, under the alternative hypothesis, the expected
value of the numerator of the test statistic (Equation 13-7) is greater than the expected value of the
denominator. Consequently, we should reject H0 if the statistic is large. This implies an upper-tailed,
one-tailed critical region. Therefore, we would reject H0 if f > f,a ,a n 0 11 α − − () where f0 is the
computed value of F0 from Equation 13-7. Effi cient computational formulas for the sums of squares
may be obtained by expanding and simplifying the defi nitions of SSTreatments and SST. This yields the
following results.

The computations for this test procedure are usually summarized in tabular form as shown in Table 13-
3. This is called an analysis of variance (or ANOVA) table.

Tensile Strength ANOVA Consider the paper tensile strength experiment described in Section 13-2.1.
This experiment is a completely randomized design. We can use the analysis of variance to test the
hypothesis that different hardwood concentrations do not affect the mean tensile strength of the paper.
The hypotheses are