Crisis Management and Its Increasing Importance in International Operations - Literature review Example

A crisis can be referred to as the critical phase of a situation. It is essentially a time of instability that is soon to see a decisive change that may result in a highly undesirable outcome or an extremely positive product. Executives that are able to estimate and plan for this change in the organization increase their tendency to capitalize on the opportunity hidden therein in comparison to the executives that allow the crisis to approach them unprepared. Thus in contrast to the conventional understanding of a crisis, it may be an opportunity rather than a threat.

Nevertheless, a crisis is always characterized by a certain level of uncertainty and risk. Crisis management deals with the minimization of risk in the uncertainty with a view to providing an individual or an organization with increased control over the circumstances and exercising the function of management leadership. According to Fink (1986), a crisis consists of four distinct stages namely, the stage of prodromal crisis, the stage of acute crisis, the stage of chronic crisis, and the stage of crisis resolution.

In the anatomy of crisis, these four stages are always existent and unchanged. A business manager who recognizes each of these stages gains the competency to address issues of huge organizational significance. In order to make a proactive approach towards intervention, a manager needs to recognize the prodrome. All crises may not necessarily comprise all four stages, though they are present in a vast majority of major crises. If there is a warning stage, that is essentially the prodromal stage of the crisis.

A prodrome may become hard to recognize at times and maybe evident at other times, though if the required action is not taken in time, it may lead to the occurrence of an acute crisis. In a vast majority of cases, when no action is taken, it is a result of obsessive decision-making or analysis paralysis within the company. It is the ease with which a crisis can be managed in the stage of prodrome that makes it very important. If the problem is taken care of before its conversion into acute, the process becomes more convenient and reliable.

The whole West is a warren of interconnected transmission lines. The power grid in the West is the largest machine that man has ever made – stretching from Canada to Mexico, from the Pacific Coast to the western front of the Rockies … But like any machine, like your lawnmower or your computer or your car, it is susceptible to breakdown. (Hotz and Clifford cited in Mitroff and Anagnos, 2001, p. 12). There is no turning back at the acute stage of crisis in crisis management in many respects.

As soon as the organization enters the stage of acute crisis from the prodromal stage and the warnings end up, the ground thus lost can almost never be recovered, though a firm can minimize additional damage by taking necessary actions in time. The key to success is controlling the crisis to the maximum extent. If it seems impossible to control the acute crisis, the management should then try to influence the origin, time, and way of the eruption of the crisis. One of the most fundamental challenges that managers encounter while dealing with the crisis in the acute stage despite being ready for it is the intensity and enormity of speed which is often an essential characteristic of the acute stage of a crisis.