1. CRISIS MANAGEMENT
Key issues

2. Crisis Management
Crisis management is the process by which an organization deals with a major unpredictable event that threatens to harm the organization, its stakeholders, or the general public

3. Elements of a Crisis
Three elements are common to most definitions of crisis:
a threat to the organization,
the element of surprise,
a short decision time
a need for change

4. Crisis management - 1 Crisis management consists of:
Methods used to respond to both the reality and perception of crises
Establishing metrics to define what scenarios constitute a crisis and should consequently trigger the necessary response mechanisms.
Communication that occurs within the response phase of emergency management scenarios

5. Crisis Management - 2
The credibility and reputation of organizations is heavily influenced by the perception of their responses during crisis situations

6. Crisis Management - 3
* respond to a crisis in a timely fashion makes for a challenge in businesses. * must be open and consistent communication throughout the hierarchy to contribute to a successful crisis communication process.

7. Types of Crises Natural disasters Malevolence Technical breakdowns
Human breakdowns
Challenges
Mega-damage
Organizational misdeeds
Workplace violence
Rumors

8. Crisis Management Technological crises
caused by human application of science and technology
when technology becomes complex and coupled and something goes wrong in the system as a whole (Technological breakdowns)

9. Crisis Management
Crises of organizational misdeeds - when management takes actions it knows will harm or place stakeholders at risk for harm without adequate precautions

10. Crisis Management Types of crises of organizational misdeeds:
crises of skewed management values
crises of deception
crises of management misconduct.

11. Crisis Management
Crisis management model - Gonzalez-Herrero and Pratt 95
Successfully diffusing a crisis requires an understanding of how to handle a crisis – before it occurs
issues management
planning-prevention
the crisis
post-crisis

12. Contingency Planning Plan in advance Rehearse via simulation
Stipulate who the spokesperson is
Speed and efficiency in response to crisis
Offer accurate information or it will backfire
Plan offers info and guidance to help decision makers deal with long-term effects of decisions

13. Role of apologies in crisis management
Controversial - for fear of legal outcomes
Evidence says that a compensation and sympathy are effective
True contrition includes sympathy for victims and offers of compensation to offset losses or suffering

14. TOYOTA – CRISIS MANAGEMENT FAILURE
Toyota’s communication strategy:
“Too little, too late”
Beyond the quality problem
Toyota mismanaged the crisis

15. TOYOTA Basic Rules Violated
For senior mgmt: crises must become their #1 priority immediately.
Integrity of firm threatened - immediate hands-on control of CEO/team
Sticking accelerators in not treated as a serious matter

16. TOYOTA Basic Rules violated
Find facts & solutions fast:
Toyota managers at first in denial
accepted a ‘patch’ (remove floor mats), not solution
when crisis exploded -- engineering solution/stopped production
Even today no one outside of Toyota knows what the real problems are – open to speculation and rumors

17. TOYOTA Basic rules violated
Communicate fully and accurately:
to all constituents to sustain trust
err on side of protecting consumers & maintain trust with a recall
What Toyota did:
hushed problem and hoped it go away