Strategic Crisis Management in Enhancing Business Continuity and Stability - Research Paper Example

Strategic Crisis Management in Enhancing Business Continuity and Stability Introduction Organizations in different sectors encounter the risk of disruptive events. The effects vary from simple or minor inconvenience that briefly disrupts the usual activities to the closure of the business. This problem necessitates crisis management. Crisis management is an enterprise’s pre-established strategies and activities that are intended for planning, responding as well as rectifying significant disastrous incidents or events (Augustine, Sharma, Smith, & Thomas, 2000). An organization’s success is greatly associated with its formulation of crisis management programs which incorporate risk management, disaster recovery, communication and emergency response programs. The organization should develop the competence to respond flexibly and promptly as soon as crisis occurs. Crisis management may include rehearsal and teamwork in the attempt to establish the most appropriate response to unforeseen, detrimental occurrences. If an enterprise is adequately equipped for the most detrimental circumstances, then it is capable of handling other scenarios as well. Businesses can be better equipped to solve sudden events that may possibly result in stern or severe damage, jeopardizing their stability as well as continuity. In respect to business continuity, crisis management will facilitate recognition of potential issues which threaten an enterprise, and provide strategy for establishing resilience as well as the capacity for an efficient reaction. Crisis management facilitates business stability by eliminating or reducing losses associated with unforeseen, negative incidents. Managers encompass a strategic duty and a role to ensure their businesses or organizations are conscious of all aspects of business crises as well as planning in advance so as to minimize their effects. Thesis Statement This research study will investigate the interrelation between business stability, continuity and strategic crisis management. This research study may determine how crisis management can enhance strength as well as permanence of a business. In respect to business stability, several aspects that are likely to weaken the operations of an organization are emphasized. The essential and fundamental strategy that various businesses implement to respond to business crisis in an attempt to enhance their stability will be considered. Contributions of crisis management in ensuring continued existence of businesses will also be studied. Literature Review Speight (2011) defined business continuity as the procedure that indicates potential factors that intimidate an enterprise and offers a stratagem for creating flexibility as well as the aptitude for responding to business-related risks effectively. During a business crisis, a response should essentially safeguard stakeholders’ interests, and organization’s brand, reputation, long-term survival as well as value-creating actions. In the article, Speight provided a detailed perspective of crises, emergencies as well as disaster mitigation in an enterprise. The chief business disaster is considered to be an incident that extremely affects business operations with the highest chance of terminating its entire activities. An organization should formulate and adapt several procedures or strategies that it may be used to respond to disasters. Modern techniques used in business continuity management, include business continuity and risk assessment plan which ensures that businesses are resilient as well as prepared to offset risks. These techniques are significant in crisis management since they not only facilitate the assessment of risks but also assist in formulation of risk management plans. The issue of business continuity is identified to be of critical concern which has continuously being researched and enhanced overtime. Business continuity aspects are upheld by safety standards or legislation (Speight, 2011). Deverell and Olsson (2010) analyzed organizational reactions to predicaments in public perception with the objective of examining organizations’ capacity to restructure so as to handle severe challenges associated with crisis management. They based their analysis on organizations’ capacity to instigate crisis management strategies, and acclimatize operational as well as managerial levels when dealing with crisis. The totally adapting organization is able to employ strategy and managerial as well as operational levels when dealing with crisis. Semi-adapting business alters its strategy but is deficient in the ability to transform operational and managerial levels as per the novel strategy, while a non-adapting business fails to understand the essence of modifying its strategy in an attempt to handle crisis. Through inductive case studies, Deverell and Olsson found out that organizational culture significantly affects crisis management process with non-adapting and semi-adapting organizations constituting strong expert as well as less dynamic cultures. The totally adapting businesses promote a flexible organizational culture. This also substantiates the differences in stability and continuity of these organizations (Deverell & Olsson, 2010). Karim (2011) considered the present business scenario characterized by development in globalization, data management technologies, as well as fast communication that not only provides organizations with exceptional possibilities for growth but also creates a number of vulnerabilities to disasters and threats. Businesses should formulate practical goals that assure the continuity of business operations if these crises as well as disasters happen. The application of Business Continuity Planning (BCP) as business preparedness approach eliminates or reduces profitability as well as employees-related hindrances. Karim provided a theoretical framework for assessing the BCP’s factors on crisis preparedness by means of statistical indicators. Continuity planning was identified as a significant element in responding to crisis. Other aspects of crisis management such as risk analysis, strategic management, awareness and training, as well as communication management should be considered in order to ensure business continuity (Karim, 2011). Momani (2010) examined the chief risk factors detrimental to business operations and provided several approaches that can be used to avert business losses. According to Momani, businesses are prone to various disasters related to technology, human errors and natural occurrences such as hurricanes as well as earthquakes among others. These pose morbidity, mortality and monetary losses to operations of businesses, which include services, activities and products. Business continuity and crisis management plans that reduce or eliminate such losses should be formulated and implemented. Continuity and crisis management plans should consider and incorporate legal requirements, policies, targets and objectives, awareness and training, testing, resources as well as management review aspects among others (Momani, 2010). Lockwood (2005) affirmed that modern business setting requires business to formulate enterprise-wide and full-bodied plans for coping with unforseen crises. Before preparing crisis management plans, organization’s brand and reputation, as well as loyalty and trust of various stakeholders should be assessed. These factors form a critical background for creating appropriate strategy for responding to various crises. Human resource leaders have a strategic responsibility to play in organizational sustainability. Human resource managers should ensure advance preparation of security and wellbeing initiatives, talent management, leadership development as well as communication plans which enhance crisis management (Lockwood, 2005). Methods The contribution of strategic crisis management to business continuity and stability will be analyzed. Qualitative research will be carried out with several data collection method that will assess how crisis management plans in several organizations enhance their continuity and strength of their operations. A feedback system based on questionnaires will be used to evaluate the increasing organizations’ stability and continuity with the formulation as well as application of crisis management plan. The management team and employees of both organizations either in public or private sector will take part in this research. Personnel responsible for crisis management plan formulation and implementation will be interviewed. Data will also be obtained from forty participants working in different companies, and secondary sources such as case studies and peer reviewed journals. The acquired data will then be analyzed to indicate how continuity and stability levels vary with crisis management plans. Assumptions It will be assumed that crises only occur in business aspects related to financial, technological, human and natural events or incidents. The relationship between crisis management plan, stability and continuity will be evaluated based on the extent of crisis effects on organization’s reputation, operations, brand, as well as stakeholders’ interests. Stakeholders’ interests considered will be those aligned with organization’s objectives and goals rather than self-reserved interests. In addition, stability will be regarded as strength of an organization with regard to its performance upon the occurrence of any of the foregoing crises. Research design Research participants from different organizations or businesses will be involved in the research proportionately. The feedback provided by these participants should not be exposed to other participants or their respective employers. Further, previous incidents of crisis management should be incorporated in the research. This study should utilize various components of evaluating business crisis management plans with the intent to establish effective ways of enhancing business continuity and stability. Recommendation It is recommendable that this research adopts a transversal approach in which organizations in different sectors are involved. A transversal approach will enable the assessment and comparison of various crisis management strategies applied in businesses operating in different sectors. Several limitations encountered in earlier crisis management researches based on a specific sector will be eliminated in this research. Conclusion Crisis management is continual improvement process that ensures businesses readiness in handling unforeseen detriment events or incidences. Through strategic planning and implementation of crisis management plans, it is possible to enhance stability and continuity of an enterprise. In this research, methods used may provide adequate information that can be used to make profound research conclusions through a comparative analysis. References Augustine, N. R., Sharma, A., Smith, C. N., & Thomas, R. J. (2000). Harvard business review on crisis management. Boston: Harvard Business Press. Deverell, E., & Olsson, E.-K. (2010). Organizational culture effects on strategy and adaptability in crisis management. Risk Management, 12 (2), 116-134. Karim, A. J. (2011). Business disaster preparedness: An empirical study for measuring the factors of business continuity to face business disaster. International Journal of Business & Social Science, 2 (18), 183-192. Lockwood, N. R. (2005). Crisis management in today’s business environment: HR’s strategic role. SHRM Research Quarterly, 1, 1-12. Momani, N. M. (2010). Business continuity planning: Are we prepared for future disasters. American Journal of Economics & Business Administration, 2 (3), 272-279. Speight, P. (2011). Business continuity. Journal of Applied Security Research, 6 (4), 529-554. Read More