Managing Crisis and Risk - Coursework Example

Managing Crisis and Risk By Foundation Department 19th April Table of content Executive summary 2. Levels of customer support 3. Operation contingencies 4. Conclusion 5. References Executive summary Management of crisis and risk are the most sensitive area of employee management. A crisis can be defined as an expected and unplanned event where workers boycott duties in pursuit of a common agenda. In most companies occurrence of crisis takes place unknowingly since such events don’t make appointment. The truth of the matter is tat for a crisis to occur; there must be a reason behind it. In this particular scenario, crisis was boycotting of duties by workers in Gate Gourmet who also influenced downing of tools at British Airways Company. All employees from both companies had same grievances. The relationship between British Airlines (BA) and Gate Gourmet was business driven by terms of contract. Gate Gourmet was supplying BA with 80000 meals a day (Griffin 2012). This was from the time BA decided to outsource the service. The truth was that BA was the largest UK customer for Gate gourmet. The decision to cut down on costs by BA saw 670 staffs working for Gate Gourmet lose their jobs (Griffin 2012). They also needed to lower their expenditure for the sake of profit making. This forced Gate Gourmet to hire non-union workers who were low-paid (Griffin 2012). This action saw 600 Gate Gourmet down their tools. In solidarity, 1000 BA staffs who were members of the same union also laid down their tools and joined the Gate Gourmet workers on sympathy strike (Griffin 2012). This saw BA flights and cargo halted. More than 600 flights booked by more than 100000 passengers were cancelled and over £45 million reimbursed (Griffin 2012). In regard to the above background information, this paper will explore various ways businesses can establish customer support services to prevent the repeat of what happened in BA and Gate Gourmet. Levels of customer support When running a high profile business with high-growth returns, it is important to pay special attention to customer affairs. It is noted in most businesses that customer support service is one of the most neglected areas where attention is diverted. This is because, when the business is expanding and growing, most business managers focus more on the financial returns and stretch out strengthening customer’s relationship (Regester and Larkin 2009). It is evident that most customers are retained by the virtue of good services offered. In addition to this, customers are also attracted and retained by the way the company respond to their demands. After the incident that happened at British airways and Gate Gourmet, it is prudent for those business managers to develop a backup plan that will help save the business from customer’s withdrawal. Step one of customer support strategy will involve establishment of customer communication services. Based on the BA and Gate Gourmet incident, there was limited or no channel of communication between the supplier and the customer on the status of the situation (Regester and Larkin 2009). Gate Gourmet being the supplier was to communicate to BA on the strike status to allow the customer come up with advanced backup plan. Therefore, the manager has to ensure that regular contact and interaction with the customer exists. This is the only opportunity where suppliers are able to know the perception of the customer towards products and services offered (Regester and Larkin 2009). The other strategy the business manager could employ is to comply with the legal obligation of keeping all customers informed (Henderson 2013). Under distance-selling rules, every business manager is legally obliged to provide customers with certain information (Henderson 2013). This information that should be given to customer relates to goods description, cancellation of offer and information on delivery details; the customer should always be informed on changes regarding the mentioned (Henderson 2013). The major oversight was committed was when BA woke up one day and reduced on consumer and operation cost. This was the first contributor to the first strike after 670 people were fired from Gate Gourmet. Appointment of top customer support service to manage all emanating issues related to customer services is another strategy aimed at boosting customer relationship. This is one of the best strategies that will also promote internal communication mechanism (Henderson 2013). Development of key customer’s performance measuring indicator KPIs) is a very strategy tat works in most organization (Elliott, Swartz and Herbane 2013). This is the system where the level of service efficiency offered to the customer is used to rate the service provider by the customer alone. To expand on this, when a customer is assisted, there is a system where the customer will rate the agent who served him/her depending on the services offered. This is precisely employed to show the level of commitment on quality services offered to customer by the company staffs (Elliott et al 2013). Most staff will have to ensure the customer is well satisfied after the services offered. Poorly treated customers will give a poor feedback rate to that serving officer and the top management will pick up the case against the staff (Elliott et al 2013). Operational contingencies Operation contingency is known to be an expected event or situation that could affect the financial, professional image or even the market shares of a company (Kathleen 2010). It is known that most contingencies are negative events and very rarely can contingency be something positive. Most businesses are frequently faced up with severe risks including production, marketing, financial and legal operation (Kathleen 2010). To effectively have a solid operational foundation, it is important as a manager to develop a perfect and strong long term contingency operation plan that will stand against all possible negativity (OConnell and Williams 2013). The first policy to develop when designing operational contingency plan is asset security. This plan will ensure that theft or destruction of intellectual property is prohibited and covered by security plan (OConnell and Williams 2013). The core value of employing security contingency plan is to ensure that in daily operation, the company should always be guarded and protected against any ill-motived emergency plan. Fraud, theft and operational errors are some of the facts managers should develop a backup contingency plan for. It should be noted that when developing this type of contingency plan, there is need for involvement of legal consideration. This is a plan that needs careful, efficiency and confidence to execute (Timothy and Holladay 2012). For companies like BA and Gate Gourmet where workers have just resumed from an emergency unforeseen strike, there is need for application of reorganization theory (Timothy and Holladay 2012). This will help in planning on how the company will re-establish its normal operation and keep its reputation high for the sake of competition. The other very essential contingency plan is execution of business continuity theory. This type of business theory normally targets to cover a wider range of situation including serious crisis that attempt to shut down the business (Timothy and Holladay 2012). To make matter clear, continuity plans are normally associated with insurance policies; which in case of a crisis will provide for the costs of maintaining and keeping the company back in operation (Timothy and Holladay 2012). The other contingency plan that is very essential in an operating company is business impact analysis theory. This consists of three action points in one. There first is the operation impact analysis. This is characterised by loss of operating efficiencies such as decreased sales or production values as a results of absence of key employees (Sadgrove 2010). This is exactly what happened at BA when 1000 employees went on strike. The end result exhibited saw more than 600 flights cancelled and refund to over 100000 passengers (Sadgrove 2010). Secondly is the financial impacts analysis. This is characterised by loss of customers, increased operational costs and expenditures and cash flow problems (Sadgrove 2010). Finally is the legal impacts analysis. This is characterised by inability to fulfil business contracts with suppliers, customers or vendors (Sadgrove 2010). Notable to mention is that the above discussed three business impact analyses are interrelated. To demonstrate on the interrelation of the three analyses; when a company hires inexperienced temporary staff, this is in one way or another result in more damage than good to the company. This is because inexperienced worker will lower operation efficiency and cause more cash flow problems. In the long run the business may fail to pay its vendors and suppliers causing decrease in business credit rating and lawsuit (Sadgrove 2010). Conclusion In summary, it is important to consider customer satisfaction as measures of boosting business growth. Businesses depend mostly on customers and the more you have the bigger the business. It is important to keep a contingency plan up to date and always remember to revise it once a year. Furthermore, the customer support programme should be the greatest option for any business intending to grow. Alternatively, contingency plan is also very essential as far as business risk management is concerned. The main plan should always be updated and revised factoring all changes occurring in the business in order to keep it fresh and relevant (Elliott et al 2013). References Elliott, D., Swartz, E and Herbane, B. (2013). Business continuity management. Viewed April 19 2014, . Griffin, A. (2012). New strategies for reputation management: gaining control of issues, crises corporate social responsibility. Viewed April 19 2014, . Henderson, JC. (2013). relevant chapter in Tourism crises: causes, consequences and management. Viewed April 19 2014, . Kathleen, FB. (2010). Crisis Communications. Viewed April 19 2014, . OConnell, JF and Williams, G. (2013). Air transport in the 21st century: key strategic developments . Regester, M and Larkin, J. (2009). Risk issues and crisis management in public relations. Viewed April 19 2014, . Sadgrove, K. (2010). The complete guide to business risk management. Viewed 19 April 2014. . Timothy, W and Holladay, S. (2012). The handbook of crisis communication. Viewed April 19 2014, . Read More