Managing Crisis: Challenges and Complexities - Example

Running Head: CRISIS MANAGEMENT Crisis Management [The Writer’s Name] [The Name of the Institution] Crisis Management Today’s business world requires a well thought out plan and process to deal with unexpected crisis. Critical factors that come into play with the background of crisis management are the reputation and brand of the company and the trust and loyalty of stakeholders. The other option of course is to be prepared with proper procedures and protocols in place so that positive action can be taken in response to some of the crises such as the ones mentioned above. There are many different approaches to crisis management depending on the business and size of the business. However, whichever approach is chosen should have a team of selected management and or professionals that are trained in the following: •the analysis and assessment of threats •the development and implementation of alternative responses •the orderly communication of information and decisions to those involved •coordinating the return to normal operations once the threat or crisis has concluded (Lockwood, 2005). Training on the above will help business focus on skills rather than on emotions that are involved when reacting to situations that demand spontaneous decisions made under stress or duress. Through effective crisis management planning organizations can better prepare for unpredictable events that may cause irreparable damages. Regardless of the size of the organization, HR leaders today play a strategic role in ensuring organizations are aware of crises and a plan of action is developed to help minimize the effects of the disruptions. HR leaders must work in concert with company directors and more than ever is communication vital so that a consistent message is shared by all within the organizations. Probably one of the most important factors of why crisis or conflict is an importance of study is due to the need of conflict for growth. This reminds me of going through hardship and being told “we grow from our experiences” or “the hard times make you a stronger person.” However conflict tends to be feared and avoided by management mostly due to the unknown. Or simply because they don’t know how to deal with it, however when conflict is not dealt with it is as bad as an illness that is never cured. Eventually your body collapses. Resolving conflict has to deal with one’s willingness to do so and one’s assertiveness in accomplishing it. This is probably the most difficult about conflict or crisis due to people fearing change. Employees who are accommodating keep quite because they rather not speak up to keep a peaceful environment even if it means at their cost. When employees are competing to be do things their way or to be “right” this means their primary interest is resolving conflict their own way. The employee’s who compete often take advantage of those who are accommodating. Employees who compromise are willing to give and take to see that the conflict gets resolve. And finally those who collaborate are interested in seeing that everyone’s needs are met through the resolution. When people recognize how they deal with conflict the effectiveness of the manager increases. As well as dealing with conflict opens communication channels, cooperation between coworkers, and overall increases the productivity and efficiency of your employees. Management is evident that it has been around for many years and will continue to be an issue in business society and in general society. Over the last decade we have seen an array of disruptions and of course the one that remains vivid in our memories was the September 11 terrorist attack because of the massive repercussions that America endured. Since the attacks we have seen how many leaders including our President have reacted to such an event. As well as the different industries that was greatly affected for example the airline industry. The common approach whether it be the president of United States or United Airlines is the revisions in policies and procedures, heightened security measures, and inconclusive better prepared plan of action. Organizations today more than ever need to be aware that anyone is vulnerable to such circumstances but the organizations that will ride the waves of the unknown are those that can strike back assertively with a well prepared plan of action that is efficiently communicated to all stakeholders involved. The management of a crisis offers to build an effective and comprehensive blueprint to actually avoiding potential disaster situations and also, if disaster has struck, to guide a company through the aftermath of a disaster. The best management policies and also authoritative crisis management is only possible when managers realise and consider the threats or potential disasters and can identify them or bring them under control in their "infancy" rather than allowing them to flare up into major problems. While it is not always easy to chalk up and install a system which delivers a warning or indicates a problem looming large, it is easier and necessary that managers at least cover the possibility of a crisis. Although many people associate disasters such as explosions and fires with the breakdown of advanced technology, Turner (1994) states that technical failures account for only 20-30% of disasters whereas social, managerial and administrative factors are responsible for 70-80%. This indicates that for the majority of industrial crises it is not the tightly coupled, complex technology that fails, but the decisions of management. Shrivastava (1988) also recognises that human and organisational factors along with technological factors can contribute the occurrence of disasters. To examine the issues related to how the 'normal' functioning of management systems can lead to industrial crises or disasters, It is imperative to study and analyse the social and technological nature of disasters, and focus on hierarchies and communication systems that may cause the neglect of 'pathogens' (Turner 1994) that can build up and lead to disaster. The Challenger space shuttle disaster as an example supports Turner's (1994) view that it is useful to talk to individuals lower down in the hierarchy to get their point of view as it is likely that they will have a better specific knowledge of the production process and potential hazards. It is argued that this may lead to a blinkered view of the organisation which will lead to a build up of pathogens. Greening and Johnson (1996) agree that the characteristics of crisis prone firms includes poor communication, monitoring and organisational control. If a firm's hierarchy is too rigid, there is likely to be a poor information flow between its levels. Ideas will not be communicated clearly through the hierarchy and similarly instructions may lose importance as they are communicated down. Such poor communication, will lead to top management not having the relevant information to be able to make good decisions. When asbestos dust was eventually found to be harmful, Manville introduced some dust abatement policies but these were not strictly enforced and were seen simply as token gestures to meet legislation rather than practical safety devices. Such toleration leads to 'pathogens' which in the case of Manville were the cause of many injuries and deaths with many investors losing up to 98% of their equity. Sells (1994) blamed management for creating what Hynes and Prasad (1997) termed Mock Bureaucracies. This mock bureaucracy created by the management contributed to deaths of many employees and the downfall of the company. This could have been avoided had the management of Manville taken a more pro-active stance on health research rather than just adhering to regulations which were later found to be too lenient. While these above examples deal with the problems that pertain to a particular department or the top management, there are sever instance in which the organisation or the entire industry may be at fault. Hynes and Prasad (1997) also draw attention to the mock bureaucracy in the US mining industry. According to Perrow's (1984) classification of normal accidents, the mining industry should be safe as it is neither complex, involves tightly coupled systems or advanced technology. However, mining has the highest death rate per 100,000 workers in any industry. Hynes and Prasad argue that this is due to organisational rather than technological failures. The omission of management to enforce safety rules has led workers to make little attempt to adhere to them. This is because they are either of little intrinsic value or punishment upon violation of them is too lenient. Under such circumstances there is a great degree of carelessness and accidents occur frequently. The biggest mistake of the LAS was that they abandoned their old manual method which meant that they were unable to revert back to it when disaster struck. They were probably justified in thinking that nothing too drastic would go wrong, at least not to the extent of the eventual disaster. Owing to the amount of professionals employed to construct the new system and the enormous amount of money it cost, it should not have failed. There also have been several cases of where malicious e-mail has surfaced which, though may not even be true, yet can have devastating effects. Also certain cases have come to light whereby people have written virus programmes and spread them over the internet with great speed resulting in major computer breakdowns across the globe causing billions of dollars worth of damage. As the old saying goes - "Forewarned is forearmed". It is fair to say that this saying does hold the key for organisations that want to have a preemptive policy securely in place against any and all kinds of crises. While this may be true in theory, it may not actually be possible in reality. An accident or a crisis is usually an unforseen, not thought of, sudden and an impactive situation. This fact is what makes a crisis, well, a crisis. No matter how much the organisation, the group or the individual prepare for the potential threats, there still lies a strong chance of something going wrong. It is not always possible to cover all the intricacies of the organisation and some loopholes may exist even after the most thorough of risk analysis. This is certainly amongst the chief barriers that exist to having early warning systems in place. However, certain organisations on the whole or its employees lack a complete or certain level of contingency planning. In some cases it is the hierarchies of organisations that come into force and thus create another barrier to overcome while developing warning systems. At the very lowest and bare level, it must be said that the best way to develop an early warning system is to use 'common sense'. Whether it be the individual or the organisation, an indepth and thorough analysis may not be required to cover all potential crises but only a little bit of thought can go a long way in actually making the organisation 'crisis free'. Once an analysis of risk has been carried out, a practical 'esacpe plan' must be introduced into the organisation and exercised often. As long as individuals know what part they play as part of the larger picture, it will help the organisation immensely. Although managerial decision making can contribute towards industrial crises as discussed above, not all disasters are within the control of company management. Shrivastava identified two sets of factors that interact to cause disasters. Never in history had such an even unfolded and probably, never in the United States had a disaster of such magnitude unfolded and caught the government, the authorities and the people totally unawares. This example clearly hightlights many important and pertinent factors that concern crisis management in general and early warning systems in particular. While it may be somewhat heartless to call this horrible tragedy as 'interesting' it is exactly that from a crisis managers point of view who is studying the aftermath of the tragedy and its implications. It shows that each department of the US had their own disaster control programmes in place (it is said that the top agencies practice using mock situations very often and revise and refine their plans accordingly). Even though some cases are beyond imagination, comprehension and belief, nonetheless, even routine contingency plans can help immensely in actually reducing the overall impact of the situation. Had the different departments not practised their procedures relating to emergencies and put them into place, a state of total anarchy would have ruled and the impact of the disaster may have been far greater. An Early Warning Model As is evident, there can be many different aspects and areas of any organisation which are prone to crises or even areas where crises can suddenly develop. As discussed earlier, there has to be an indepth understanding by management into all possible areas of the functioning of their organisation. Once an initiative has been shown by the management, it slowly but surely permeates down to the lowest level encompassing groups, team and even individuals. Presented here is a model of an early warning system. This model, would help organisations deal with situation that could flare up into major crises. This model can be likened to a 'balloon'. Let us consider a balloon which has not been filled by any air. This balloon represents a potential problem and has been identified as such during a risk analysis conducted by the organisation. This particular problem should be 'red flagged' and monitored closely throughout with any and every change being recorded. In this particular model, the 'size' of the balloon is the key factor. If the balloon is 'inflated' for whatever reason 'sensors' (such as observers or managers in an organisation) would raise an alarm and be prepared to look into why the 'crisis' has escalated. However, the cause for concern would only be when this balloon inflates beyond a certain tolerance level. As long as the balloon stays within the tolerance level, it should be considered as safe. The tolerance levels will be agreed upon parameters within organisations subject to their own terms and conditions. This model may prove useful for all levels - organisational, group as well as the individual level. As long as the specified parameters and other terms are drawn and followed, it can serve effectively. Computer aided technology may also help in developing practical early warning systems. This would be a fast, effective and inexpensive way to analyse potential crisis situation and also use simulation to 'generate' crisis situations to see how the management and other departments of the organisations can cope. A crisis is an episode or series of events -- usually unexpected - that creates a very real potential for adverse or even catastrophic consequences. Regardless of the legal merits of any crisis situation, perceptions generated from onset through resolution of the crisis can dramatically impact the reputation and financial standing of the company. Once a crisis has struck, nothing can be done to change the facts. The goal during the crisis is to make certain that all helpful evidence is collected and communicated in the most positive way. Before any irrevocable decisions are taken during or in the immediate aftermath of a crisis, those decisions need to be taken with the benefit of the very best possible intelligence as to precisely what happened and where the responsibilities and potential legal liabilities may lie. Thus the importance of crisis management is not only to take measured action after the crisis but also to be pre-emptive. As discussed throughout this essay, there are many barriers which result in the lack of early warning systems. It can be said that dealing with crisis in its infancy will positive effects on the organisation and is as such, an early warning system, by nipping the problem in the bud. Whatever actions, policies and procedures are put into place, it is important to weigh all these situations before giving the go-ahead. Crisis can be a make or break issue for any organisation and the better prepared it is, the stronger it will emerge. Whether it is at the level of an organisation or of an individual, set procedures must be followed and all aspects and consequences must be taken into account. The bottom line is that a company should seek to remove barriers that exist to developing early warning systems because, as it is said - prevention is better than cure! References Flowers, Stephen (1996), "Software failure: management failure", Chichester: John Wiley and Sons, 1996. Report of the Inquiry into the London Ambulance Service, February 1993. Turner B (1994), Causes of Disaster: Sloppy Management, British Journal of Management, 215-219 Shrivastava P.et al (1988) Understanding Industrial Crises, Journal of Management Studies, Vol 25, no.4, 285-303 Sells B (1994), What Asbestos Taught Me About Managing Risk, Harvard Business Review, March/April, 76-90 Greening D & R Johnson (1996) Do Managers and Strategies Matter? A Study in Crisis, Journal of Management Studies, Vol 33, No. 1, 25-51. Hynes T & P Prasad (1997) Patterns of Mock Bureaucracy in Mining Disasters : An Analysis of the Westray Coal Mine Explosion, Journal of Management Studies, Vol 34, No.4, 601-623 Karl E. Weick & Kathleen M. Sutcliffe (2001). Managing the Unexpected (1st ed.). San Francisco, CA: Jossey-Bass. Kuklan, H. “Managing Crisis: Challenges and Complexities,” SAM Advanced Management Journal Fall 1986. Hartwick (2003). Classic Leadership Cases. Oneonta, NY: The Hartwick Humanities in Management Institute. N. Lockwood (2005). “Crisis Management in today’s business environment. HR ‘s Strategic role,” HR Magazine Dec. 2005: Pertinent Information. Pilgrim. Conflict- an Essential Ingredient for Growth. Read More