CRISIS MANAGEMENT IN WORKPLACES 13
Crisis Management in Workplaces
Abstract
Recent events like financial failures by businesses, cybercrime,product tampering and workplace violence indicate that the businessenvironment has become more vulnerable to crises. Crises are suddenand unexpected and result in extreme losses for businesses. Hence, itis important that businesses are properly prepared to handle crisesas soon as they happen. However, many businesses are unable toeffectively manage crisis in workplaces. The research paper begins byan introduction that defines crisis management. It then explainspossible crises in workplaces and trends promoting them, the impacton managers and a discussion on crisis management.
Crisis management in workplaces is one of the many issues affectingbusiness in America. Recent events have clearly indicated that thebusiness community is susceptible to disruptions, which are extremelycostly. Illustrations of recent crisis, like increasing cybercrimedue to advances in technology that makes it possible to hack intoorganizations, financial failures arising from poor businessmanagement, violence at the places of work, computer viruses orproduct tampering can result in considerable harm and loss to anorganization.
When such crisis occur, it is important for organizations to managethe crisis effectively. However, many organizations are rarelyprepared for effective crisis management. The phrase crisismanagement refers to the pre-established activities and principles inan organization for handling a crisis safely and effectively. Crisismanagement focuses on the development of an organization’s abilityto respond to unexpected events.
In order for crisis management to be successful, the organizationmust have a plan, which covers risk management, communication of thecrisis and how the organization will ensure continuity among otherfactors. The plan ensures that businesses respond to a crisisflexibly. Hence, it becomes possible to make timely and importantdecisions as soon as a crisis occurs. An organization that isprepared for a “worst-case scenario” is able to handle anysituations or crisis it may encounter.
Crisis in workplaces are effectively managed under the guidance ofmanagers. Management has a strategic role and accountability ofensuring their organization is able to respond to a crisis. It is themanagers that plan on how to respond when problems arise while at thesame time ensuring that they engage their colleagues in reducing harmas much as possible. Hence, for crisis management in workplaces to besuccessful, managers must control the crisis effectively.
Crisis in Workplaces
According to O’Rourke (2010), crisis occurs in different shapes aswell as forms. While some crisis unfold at a slow pace over months oryears, there are crisis that are immediate and unexpected. In mostcases problems within an organization are confused with crisis. Thedifference is that problems happen often in business and causeminimal if any harm to an organization. On the other hand, a crisisis something that is major, not predicted and has a higherpossibility of negatively affecting business.
The aftermath of the crisis might cause significant harm to not justthe business, but workers, services, products, finances and mostimportant business reputation. Another differentiating factor betweenproblems and crises is that problems are easy to address within ashort time and do not draw the attention of the public or drain theorganization’s resources. Contrary, a crisis is expensive tomanage, requires a lot of time and draws attention.
Every year, media reports of natural disasters, technologicalmisfortunes, human disagreements, biological illnesses and managementproblems. When the events are harsh and pressure vital values, theybecome categorized as crises. Unfortunately, they appear to beoccurring more often and threaten to become catastrophic. No type ofbusiness is immune to such crises. This means that the businessenvironment is progressively becoming unstable and intricate.
Crises can either be internal or external (O’Rourke, 2010).Internal crises are those that happen within an organization, butcause harm to the entire organization. An illustration is anaccounting scandal and misappropriation of funds, which whileaffecting the internal operations of business, also tarnishes itsreputation. External crises happen when forces outside the businessaffect its operations, for instance natural calamities or peoplewithin a business community protesting against its operations.
Crises can also be novel or routine (Woo, Galligan & Synder,2015). Novel crises refer to situations, which happen unexpectedlyand result in unusual impact. Many businesses do not plan for suchcrises because they are unusual hence, businesses suppose that theycannot happen to them. For instance, such a crisis would be shootingswithin an organization by an employee resulting in the injury offellow employees.
Routine crises are those that organizations have the capability toplan for ways to avoid. For instance, food companies must ensure thattheir products meet health standards (Woo, Galligan & Synder,2015). Thus, when the crisis emerges due to a lawsuit that theproducts do not meet health standards, the business can associate thecrisis with failure to effectively adhere to the law.
Trends Promoting Crises
Free-Market System – businesses currently operate in a free-marketsystem. This places extreme pressures on how businesses operate byencouraging risk-taking, which enhances the possibility for crisis.Managers take greater risks in meeting the persistent pressure fromtheir stockholders to achieve profit objectives.
In addition, incentive systems specifically for businesses operatingwithin the financial industry have the perverse impact of endorsingrisk taking. Executives get rewards based on their ability to achievemore than the expected profits and in the process enhance stockholdervalue. The free-market system is currently on trial. It faces threatsfrom government restrictions aimed at averting prospect financial aswell as economic crisis.
Globalization – it promotes crises in a number of ways.Globalization has made it possible for businesses to link withcustomers as well as suppliers via an intricate nexus of criticalinter-business relationships. As a result, as businesses becomedistant and supply chains longer, they become susceptible todifferent types of disruptions.
For instance, supposing that a US firm depends on supplies fromChina. If a natural disaster, such as an earthquake was to occur inChina, it impairs the possibility of the Chinese firm to continueproviding supplies to the US firm. As a result, the US business facesthe crisis of lack of supply, which adversely affects its operations.The crisis may be intensified by the possibility that the US firmsolely depended on the Chinese firm for supplies. In such a scenario,business may be forced to shut down.
Impact on Managers
When crisis occur in a business, all the individuals are affected.However, management plays a crucial role in overseeing the operationsof a business. It is the management that is in charge of how businessis conducted and thus takes blame for any crisis that occurs. As aresult, managers are affected in a number of ways. The suddenness,time compression as well as uncertainty associated with a crisisaffect the way managers react (Lerbinger, 2012).
Suddenness – crises happen suddenly. This means that no one isaware that a crisis will happen. In most cases, prior to a crisishappening there are indications that something within the business isnot been performed well (Lerbinger, 2012). For instance, when abusiness faces a law suit against a product they sell, it could meanthat the production process of the product is faulty. A manager maybe unaware that such things are happening within the organization.Hence, when the crisis occurs it becomes a sudden and unexpectedevent.
Time compression – due to the suddenness of crises, there isminimal time to find a solution. When a crisis happens, managementdoes not always have a lot of time to make decisions towardsresolving the issue (Lerbinger, 2012). As a result, a manager maymake decisions under pressure and stress, which could worsen thesituation. Pressure derives from the fact that management is put attest to resolve the issue within a specified time frame. Thisdistorts the ability of the manager to make effective decisions onhow to solve the crisis (Lerbinger, 2012).
Uncertainty – crises are associated with uncertainties. When acrisis occurs, it is not possible to predict what will happen next(Lerbinger, 2012). The business could fail, employees could opt toresign or the business may face numerous lawsuits among otherpossibilities. As such, in resolving the crisis, managers deal withuncertainty, which could render their problem-solving approachesineffective (Lerbinger, 2012). Considering that in most instances,the crisis is something that has never been experienced by theorganization this enhances the level of uncertainty.
Crisis Management
The suddenness, time compression and uncertainty of crisis asdiscussed make it impossible for managers to effectively deal with acrisis. As such, this could worsen the crisis and cause a businessmore losses or problems. Thus, it is important that managers havecrisis management skills. Regardless of the type of crisis, crisismanagement skills ensure that business, through its management, isprepared to deal with any uncertainties, suddenness and timeconstraining crisis that may occur.
The manner in which a business responds to a crisis acts as adefining moment, which could either save or destroy its reputation.It is impossible to tell when crisis will happen. This explains whyso many American businesses face the challenge of crisis management.Most organizations assume that it is not possible for them to faceemergencies. Hence, when they do occur they are unable to effectivelydeal with the situation.
Hutson and Johnson (2016) explain that a crisis requires a lot fromthe leaders. When a crisis occurs, the greatest loss a business canencounter is losing significance. When significance is lost, itbecomes impossible to control the situation. Hence, Hutson andJohnson (2016) assert that leadership must plan for the continuity ofbusiness. This involves making attempts to understand what ishappening and plan for what will happen next.
O’Rourke (2010) explains the rules, which all managers must putinto consideration as they approach a crisis. These are:
The Manager Should Develop a Crisis Management Action Plan
Once a crisis has happened, the first step is to come up with adetailed plan for managing the crisis. Smith (2012) supports this bynoting that the first thing a manager should do is to conduct a 360degree evaluation of the situation. The evaluation entails knowingthe facts of the crisis, those involved and the landscape from whichthe manager is operating. This makes it possible to come up with aneffective crisis communication plan.
Currently, the media has enhanced the speed at which information isspread. When a business faces a crisis, it is likely that within ashort period of time it will be known to the public. This enhancesthe complexity of managing the crisis. However, with an action plan,the manager is able to determine the scale of the emergency anddetermine the most appropriate response. The manager should discussthe options the business has with people they trust with theobjective of gaining control over the situation.
A crisis management action plan solves the time constraint problemthat manager’s experience when having to solve the situation. Theplan directs the manager on what actions to take, which means thatvaluable time is not wasted in endeavoring to make decisions on howto communicate (O’Rourke, 2010).
Set Objectives and Principles
When a crisis occurs, it is important to have objectives andprinciples in place. They must be attainable and can be measured.Objectives and principles are especially important when communicatingabout the crisis. This means that the manager is aware of what theywill say, reduce the harm caused to business by the crisis andreassure stakeholders that the crisis is under control.
Create a Crisis-Control Team
The manager may feel responsible for a crisis occurring. Hence, theymay attempt to control the situation by working towards resolving thecrisis on their own. However, the stress and pressure due to thesuddenness of the situation makes it impossible for the manager toresolve the issue alone. Thus, it is important to set up acrisis-control team.
It is important that careful selection is made on who will be partof the team. In addition, each member should have clearly definedroles. Selection should be based on the expertise of employees.Since, it is a crisis only the best should be included in the team.Clearly defined roles for every team member ensure that time is savedin working on different aspects of the situation simultaneously.Having a team ensures that the crisis is managed from all possibleangles.
Communication Plan
The manager should have a communication plan, which is used to giveout any information required concerning the situation. Consideringthat the crisis is likely to affect the reputation of the business,it is important that what every member of the organization says iscarefully considered.
All individuals affiliated to the business should speak in one voice.This means that all stakeholders should receive similar validinformation concerning the situation and how it is being solved. Forinstance, an organization can create a website to act as the sourceof information for crisis-related issues.
A communication plan is invaluable in dealing with the crisis. Itexplains the position of the organization, and may rally support forthe business, which reduce the negative impact of the crisis on thebusiness’ reputation (O’Rourke, 2010). By communicating with thepublic, it demonstrates that the company is working on the issue,which reassures the stakeholders that the crisis is under control. Itreduces the uncertainty, especially affecting customers, andreinforces their continued support for business.
Woo, Galligan and Synder (2015) emphasis on the significance ofactive communication when managing a crisis. The authors note that itis significant to communicate constantly to business owners,employees, lenders, the public and media. The crisis manager shouldact as the spokesperson and source of information concerning thesituation.
Important to note is that when communicating to the public, themanager must ensure that all information is true. Honesty andtransparency are very important (Woo, Galligan & Synder, 2015).Smith (2012) also supports the need for honest communication bynoting that lies should be avoided. Lying may buy the time needed tofind a solution to the crisis. However, it could eventually worsenthe situation, especially when it is discovered that the businesslied about a crisis.
Woo, Galligan and Synder (2015) make significant contribution to theissue of crisis management. They note that when dealing with theunexpected, managers need operating principles. These include:
Leading Decisively
When a crisis occurs, the crisis manager is in a better position tolead the business in solving the situation. However, the businesscannot solely depend on the manager as other issues may be associatedwith the crisis. For instance, if the business faces a legal lawsuit,they will need the assistance of a legal officer to provide counsel.Hence, it is important that the crisis manager combines his effortswith other individuals who are equally important in working towardssolving the crisis. This is especially the case when the situationbecomes more serious than anticipated.
Frame the Crisis Continuously
Once a crisis occurs, the manager feels the urge to make an analysisfast due to the time constraint. The analysis may be effective insolving the crisis at first. However, it is important to accept newinformation that comes along. Woo, Galligan and Synder (2015) notethat it is very important for the manager to constantly evaluate thecrisis as often as possible as crises are subject to change.
For instance, business may encounter the crisis of a faulty product,and assume that they only have to deal with making changes to theproduct. However, as consumers begin to learn about the crisis thosethat have already bought the product might file for lawsuits againstthe business. This means that the business no longer deals with thecrisis of the faulty product as was initially the case, but also thelawsuits arising from the product. As such, the manager must makeamends to the crisis management plan to ensure that it tackles allissues related to the crisis.
Be Prepared for the Unexpected
Due to the pressure and stress associated with the situation, themanager ought to understand that people might act in different waysthan they would under normal situations. For instance, employees maynot work under normal circumstances as they would prior to thedisaster. Like in the event of a natural calamity, some employees mayopt to remain at home rather than report to work.
Conclusion
Crisis management is an issue affecting many businesses in America.Most businesses do not anticipate the possibility that crises mayoccur within their organizations. Hence, they fail to plan for suchincidences. As a result, when a crisis occurs, they are incapable ofeffectively solving the situation. Crisis in the places of employmentoccur in different forms and types. The crises can happen within ashort time or over a long time. They are internal, external, novel orroutine crisis.
Crises have been on the rise due to globalization and free-marketsystems, which expose businesses to unexpected happenings. When acrisis occurs in a business, the management is most affected. Thesuddenness, time compression as well as uncertainty associated with acrisis affects the way managers react. Managers must put intoconsideration rules and operating principles of crisis management toensure they effectively manage the crisis.
References
Hutson, H & Johnson, M. (2016). To recover from a crisis, retellyour company’s story. Havard Business Review. Retrievedfrom:https://hbr.org/2016/05/to-recover-from-a-crisis-retell-your-companys-story
Lerbinger, O. (2012). The crisis manager: Facing disasters,conflicts and failures. New York: Routledge.
O’Rourke, J. S. (2010). Management communication: A caseanalysis approach. New York: Prentice Hall.
Smith, J. (2012). How to handle a crisis in the workplace. Forbes,1-1. Retrieved from:http://www.forbes.com/sites/danschawbel/2012/07/01/how-to-handle-a-crisis-in-the-workplace/#699f7e772f78
Woo, R., Galligan, M & Synder, W. (2015). Crisis leadership: Fiveprinciples for managing the unexpected. The Wall Street Journal.Retrieved from: http://deloitte.wsj.com/riskandcompliance/2015/07/06/crisis-leadership-five-principles-for-managing-the-unexpected/