A Seminar on

Crisis management
Carried out at

BMSCE,BANGALORE

DEPT. OF INDUSTRIAL ENGINEERING AND MANAGEMENT BMS COLLEGE OF ENGINEERING

Submitted By:

ADITHA PRAKASH
1BM09IM002

Dept. of IEM, BMSCE

CRISIS MANAGEMENT

WHAT IS CRISIS?

A sudden and unexpected event leading to major unrest amongst the individuals at the workplace is called as organization crisis. It is an emergency situation which disturbs the employees as well as leads to instability in the organization.

CRISIS CAN AFFECT ALL SEGMENTS OF THE SOCIETY

TYPES OF CRISES
Based on the social setup, crises can be categorized as:

Natural crises Technological crises Confrontation Malevolence Organizational misdeeds Workplace violence Rumours Terrorist attacks/man-made disasters

WHAT IS CRISIS MANAGEMENT?

Crisis management can be defined as a, "Holistic management process that identifies potential impacts that threaten an organization and provides a framework for building resilience, with the capability for an effective response that safeguards the interests of its key stakeholders, reputation, brand, and value-creating activities- as well as effectively restoring operational capabilities."

Three elements are common to most definitions of crisis: A threat to the organization, The element of surprise, and A short decision time

Crisis management consists of: Methods used to respond to both the reality and perception of crises. 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.

PHASES OF CRISIS MANAGEMENT

PHASES
Crisis respons e

Pre crisis

Postcrisis

PRE CRISIS PHASE

The pre-crisis phase is concerned with prevention and preparation. Prevention involves seeking to reduce known risks that could lead to a crisis. This is part of an organizations 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.

CRISIS RESPONSE PHASE

The crisis response is what management does and says after the crisis hits. Public relations play a critical role in the crisis response by helping to develop the messages that are sent to various people. 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 behavioural intentions

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 managements attention but still requires some attention.

CASE STUDY- ODWALLA

Odwalla is the health conscious juice company which began a few decades ago. The company was growing strongly with annual sales rising at the rate of 30%. The company had established a strong brand with enormous customer loyalty.

Odwalla juice E.coli outbreak in 1996

Health officials in Washington state informed the company that they had discovered a link between several cases of E.coli 0157:H7 and Odwalla fresh apple juice.

 One child died and more than 60 people in the Western United States and Canada became sick after drinking the juice. Sales plummeted by 90%, Odwalla's stock price fell by 34%. Customers filed more than 20 personalinjury lawsuits and the company looked as though it could well be destroyed.

WHAT DID THE COMPANY DO?

Odwalla's CEO Stephen Williamson ordered a complete recall of all products containing apple or carrot juice. This recall covered around 4,600 retail outlets in 7 states. On all media interviews, Williamson expressed sympathy and regret for all those affected and immediately promised that the company would pay all medical costs.

Internal communications:
Williamson conducted regular company-wide conference calls on a daily basis, giving employees the chance to ask questions and get the latest information. This approach proved so popular that the practice of quarterly calls survived the crisis.

External communications:
Within 24 hours, the company had an explanatory web site (its first) that received 20,000 hits in 48hours. All possible attempts were made to provide up to the minute, accurate information.

FIXING THE PROBLEM

The next step was to tackle the problem of contamination. The company switched from unpasteurized juice to a process called "flash pasteurization" which would guarantee that E-coli had been destroyed without compromising flavour. Within months of the outbreak, the company had in place what some experts described as "the most comprehensive quality control and safety system in the fresh juice industry." The new process was communicated in all advertising and public outreach campaigns.

RESULTS

The company's values spoke of nourishing people and when the crisis came it was an adherence to honest, straight talking and accepting responsibility that helped to get the company through.

The year after the crisis, Odwalla was voted "Best Brand Name in the Bay Area" by San Francisco Magazine. This was the first indication amongst many that Odwalla's reputation had survived.

OTHER EXAMPLES
Some examples of successful crisis management are as follows: Tylenol (Johnson and Johnson) Pepsi

CONCLUSION
Here are some tips to overcome crises through effective communication in an organization:

Have a crisis plan ready to go. Build the crisis support infrastructure Speak with one voice Be prepared before you talk Remembers social media Be there Protect the record Keep reading the situation Dont go quiet Learn and tweak

A crisis management plan generates order out of chaos. It needs strong leadership by well-trained and rehearsed individuals. Everyone within an organisation should know what his or her role is in a crisis and should be prepared to deal with one.

REFERENCES

Corporate crisis management: how to minimize the chaos by Elizabeth Stevens http://archive.adl.org/security/crisis%20man agement.pdf http://www.managementstudyguide.com/cri sis-management.htm http://www.bernsteincrisismanagement.com / Wikipedia.org