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Final Crisis Management Assignment-1

Crisis management involves not only responding to emergencies but also learning and adapting from them to strengthen organizations for the future. Effective monitoring, performance measurement, and feedback are essential for evaluating crisis responses, as demonstrated by case studies of Johnson & Johnson, Boeing, and Samsung, which highlight the importance of transparency and accountability. These examples illustrate how organizations can recover from crises by prioritizing safety and communication over profits.

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4 views3 pages

Final Crisis Management Assignment-1

Crisis management involves not only responding to emergencies but also learning and adapting from them to strengthen organizations for the future. Effective monitoring, performance measurement, and feedback are essential for evaluating crisis responses, as demonstrated by case studies of Johnson & Johnson, Boeing, and Samsung, which highlight the importance of transparency and accountability. These examples illustrate how organizations can recover from crises by prioritizing safety and communication over profits.

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© © All Rights Reserved
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Controlling and Evaluating Crisis Management

Crisis management isn't just about reacting to emergencies—it's about learning, adapting,
and growing from them. Organizations today face a wide range of potential crises, from
cybersecurity breaches and product recalls to natural disasters and reputational damage.
Controlling and evaluating how a crisis is managed helps businesses not only survive the
crisis itself but also become stronger and more prepared for the future. This section
explores how effective monitoring, performance measurement, feedback, and post-crisis
analysis play a role in comprehensive crisis management.

Monitoring the Crisis Response


Monitoring a crisis response in real time is one of the most critical elements in managing
any emergency situation. This involves continuously gathering information, assessing the
situation, and making sure response efforts are aligned with organizational goals.
Monitoring should not be a passive activity. Leadership teams, operations managers, and
communications staff must all stay engaged, using tools like dashboards, real-time
reporting, and direct feedback from employees and customers.

During a crisis, quick access to accurate data helps prevent miscommunication and poor
decision-making. Monitoring also includes tracking how information is being received and
understood by stakeholders, from internal employees to the general public. A strong
monitoring system includes escalation procedures and real-time communication channels
that allow teams to pivot quickly as new information emerges.

Measuring Performance and Response Effectiveness


Once the immediate chaos of a crisis begins to settle, organizations need to assess how
effectively they responded. This means evaluating not just whether the crisis was resolved,
but how efficiently resources were used, how well communication was handled, and how
quickly normal operations resumed. Some practical performance indicators include
response time, the quality of stakeholder communication, financial impact, and how well the
organization followed its crisis protocols.

Effective evaluation should also involve getting feedback from everyone involved—
employees, customers, partners, and regulators. Surveys, interviews, and third-party
assessments can provide a more complete picture of what went well and what didn’t.
Organizations should compare their response to past incidents or industry benchmarks to
see if they are improving or falling behind.
Feedback and Continuous Improvement

Case Studies and Applications (Practical Work)

Case Study 1: Johnson & Johnson’s Tylenol Crisis (1982)


In 1982, Johnson & Johnson faced one of the most serious consumer safety crises in U.S.
history. Seven people in the Chicago area died after ingesting Tylenol capsules that had
been tampered with and laced with cyanide. The incident led to nationwide fear and
significant financial risk for the company, which at the time held about 35% of the over-the-
counter painkiller market.

Despite not being responsible for the tampering (which occurred after the product left the
factory), Johnson & Johnson quickly recalled 31 million bottles of Tylenol at an estimated
cost of over $100 million. They halted all advertising, advised the public not to consume the
product, and cooperated fully with authorities. The company’s CEO, James Burke, took a
transparent and proactive communication approach, which earned public trust.

In response, Johnson & Johnson also pioneered tamper-proof packaging, including foil seals
and secure bottle caps, which later became the industry standard. By prioritizing customer
safety over profit, the company not only restored its brand but also set the gold standard for
crisis management in the corporate world.

Case Study 2: Boeing 737 MAX Crashes (2018–2019)


Between 2018 and 2019, two Boeing 737 MAX aircraft crashed within five months of each
other—Lion Air Flight 610 in Indonesia and Ethiopian Airlines Flight 302—killing a total of
346 people. Investigations revealed that the Maneuvering Characteristics Augmentation
System (MCAS), an automated flight control software, played a major role in both crashes.
Boeing was heavily criticized for failing to adequately inform pilots and airlines about
MCAS, and for not addressing concerns after the first crash.

The company initially downplayed the seriousness of the issue, and its response was seen
as defensive and opaque. Eventually, the 737 MAX fleet was grounded worldwide. Boeing
faced lawsuits, regulatory scrutiny, and loss of public and airline trust. The CEO was
replaced, and the company invested significantly in correcting the software and overhauling
its safety culture.

This crisis highlighted how delayed transparency and prioritizing profits over safety can
escalate a crisis into a corporate disaster.

Case Study 3: Samsung Galaxy Note 7 Recall (2016)


Samsung faced a major crisis in 2016 when its flagship smartphone, the Galaxy Note 7, was
reported to overheat and catch fire due to battery malfunctions. After initial reports,
Samsung issued a recall and replaced affected units—but replacement phones also began
catching fire, escalating the crisis.

Ultimately, Samsung was forced to permanently discontinue the device, recall 2.5 million
units, and conduct an in-depth investigation. The financial loss exceeded $5 billion, and the
company’s brand reputation took a significant hit. However, Samsung took accountability
and implemented an 8-point battery safety check, revised product development processes,
and improved quality assurance.

The Note 7 crisis became a case study in both mismanagement and recovery. Samsung’s
quick action, detailed public reporting of findings, and improvements in safety protocols
helped rebuild its consumer confidence over time.

References
Tylenol Crisis 1982: https://www.nytimes.com/1982/10/01/us/tylenol-capsules-recalled-after-7-
die-in-chicago-area.html

Boeing 737 MAX: https://www.reuters.com/article/us-boeing-737max-investigation-timeline-


idUSKBN1ZT00B

Samsung Galaxy Note 7 Recall: https://www.bbc.com/news/business-37597727

Post-Crisis Review Processes: https://www2.deloitte.com/us/en/pages/risk/articles/crisis-


management-and-response.html

Feedback and Learning in Crisis Management: https://www.mckinsey.com/capabilities/risk-and-


resilience/our-insights/crisis-response-evolving-lessons-from-the-covid-19-pandemic

Measuring Crisis Response Effectiveness: https://www.ready.gov/business/implementation/crisis

Crisis Monitoring and Real-Time Response: https://hbr.org/2020/03/what-good-leaders-do-in-


crisis

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