A crisis can happen to anyone at anytime, including businesses and corporations. Crisis situation can occur for various reasons. Some that come to mind our natural disasters, changes in government regulation, changes in consumer behavior, company negligence, or employee negligence. Much of the crisis that occurs today is the technology based. Many individuals steal data and information from computers. To say the least, a crisis can arise from a variety of situations. Certain crisis that were national stories include the Exxon Valdez situations in the late 80s, Hurricane Katrina which affected various corporations and businesses, Enron scandal, 9/11, the Tylenol recall of 1982, Pepsi-Cola syringe crisis on 93, Y2K, etc…
The textbook defines a crisis as, “A major catastrophe that may occur either naturally or as a result of human error, intervention, or even malicious intent.” Companies need to prepare for such events. Managers must assess the risk of the company, such as determining aspects that affect the company, which may cause a crisis. The communication department should focus on understanding their environment. Those managers will then be better able to determine possible crisis that could occur. Next, they must understand how the crisis affects their environment, and the company’s constituencies. Organizations must be prepared for the worst, and plan accordingly so they are not out in the cold when something happens.
A crisis that just occurred to a company this weekend is Goldman Sachs, which is being charged by the SEC with Fraud. This crisis event could seriously affect their business. Many customers may not be willing to stay with this company since they have been charged with defrauding investors on a sale of securities. I will be sure to monitor this situation to see how managers and communication officers handle the crisis.
I agree with you Mathias. It is so very important for businesses to make sure that they are prepared for a crisis, no matter what it may be, especially in today's world. There are so many unexpected things that happen, businesses must remain proactive so that they can survive. Things do happen and mistakes will be made by different companies. It is how these companies recover from a crisis that shows people how prepared they really are and if they deserve to stay in business. I was also very shocked to hear about Goldman Sachs and will continue to follow that story to see what happens.
ReplyDeleteIt is so important just as we talked about in class, for companies to be prepared for technological crisis’s. Mathias is right, there are so many people out there trying to steal information from people via the internet, and the government is trying to deal with this the best way they can. How long do you think it is going to take for them to really take control of these problems?
ReplyDeleteIt is very true; companies need to prepare for possible crisis. However, a crisis can sometimes happen beyond our imagination. For example, who could expect the prevalence of swine flu that occurred a year ago? It seriously affected the business result. We should at least clear a chain of command to react properly when unexpected incidents happen.
ReplyDeleteA potential problem for companies would be a poor upward flow of communication. While many take the time to plan well for a crises, they tend to overlook the fact that most of what takes place on the "front-line" may remain there. For example, there may be serious issues going on with on at a retail branch - perhaps to the point where a customer is threatening to sue or take their story to the media - however, an incompetent manager may block the flow of communication to the higher-ups. In such a case, the plan exists, but management aren't aware of the crisis till it's too late. Companies need to utilize different approaches to ensure that they are kept informed.
ReplyDeleteIt is sessential for companies to have a plan in place just in case a crisis occures. A crisis can be natural or man made. Sometimes there are warning signs of a crisis and other times there is not time for warning. Many businesses are faced with both type, some are easier to plan for than others. With a natural crisis there is insurance to help cover expences that occure. A man made crisis seems to have a larger impact and it is harder for a company to over come. A crisis can strike at anytime an essential part is the be as prepared as possible.
ReplyDeleteKayla
I somewhat agree with you that most crises occur due to technological negligence. Just today the Dow Jones Industrial Average plummeted over 900 points in a single day because of a "fat-finger" input for Proctor & Gamble had automatic sell orders taking off. Here it was personnel error, but technology had an important part to play. I do believe the more technology a company adopts the more accurate and less error prone their organization becomes. However, most organizations value their people, therefore those employees who operate the technology should be well trained.
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