a. Some companies engage in crisis planning to enable them to cope with unexpected events that are so sudden and devastating that they have the potential to destroy the organization if managers aren't prepared with a quick and appropriate response.
i. Although crisis may vary, a carefully thought out and coordinated plan can be used to respond to any disaster. In addition, crisis planning reduces the incidence of trouble. Ex: Putting lock on door reduces burglaries.
b. Crisis Prevention-Crisis prevention stage involves activities managers undertake to try to prevent crisis from occurring and to detect warning signs of potential crisis.
c. A critical part of the prevention stage is building open, trusting relationships with key stockholders such as employees, customers, suppliers, govts, unions and the community.
i. By developing favorable relationships, managers can often prevent crises from happening and respond more effectively to those that cannot be avoided.
d. Crisis preparation- This stage includes all the detailed planning to handle a crisis when it occurs.
i. 3 steps in in the preparation stage:
1. Designating a crisis management team and spokesperson.
2. Creating a detailed crises management plan
3. Setting up an effective communications system.
e. Crisis management team is a cross-functional group of people who are designated to swing into action if a crisis occurs. An organization should also have a spokesperson to be the voice of the company during the crisis. The crisis management plan (CMP) is a detailed, written plan that specifies the steps to be taken, and by whom, if a crisis occurs. CMP should include the steps for dealing with various types of crisis, such as natural disasters like fires/earthquakes, normal accidents like economic crises/industrial accidents, and abnormal events like product tampering/acts of terrorism. KEY POINT- CMP should be a living, changing document that is regularly reviewed, practiced, and updated as needed.