Crisis Management

Talking about crisis management the first example that comes to my mind is Toyota motor’s recall. One of the biggest recall’s in the history of automotive industry. Numbers of cars recalled were 7 million cars in 5 different countries. But as the Topic has been discussed numerous times I would like to talk about ‘The Indian Hotels Company’ the mother company of Taj Hotel which was one of the targets of Terrorist attack in Mumbai 26th Nov., 2008. This was a Major Crisis situation for a luxurious hotel which coupled with economic slowdown. As being the characteristics of ‘Crisis’ it was a ‘surprise’ for a Business to be a target for an attack. The Indian Hotels Company business of TATA groups was also caught unprepared. According to a Poll(mentioned in the book pg.226) in 2004 revealed that only 22 percent of Fortune 1000 companies say they are completely prepared to face a natural or manmade disaster.

Managing the crisis after it is occurred is equally important to being prepared for it. The steps that company took were recommendable. Taj Hotel determined their major affected constituents as employees and the customers. The hotel was reopened in span of 25 days with a grand reception for its customers which gave the exhibits of the new security systems installed, explained the training process which employees went through to better manage the crisis like this in future. The member customers of the Taj hotel were offered free three day stay after the reopening around 500 customers took advantage of that and were more than satisfied with improved security and service of the hotel which raised the value of the company. Employee the most important constituent as determined by the business played an important role in aftermath. Company set up a Trust Fund, the fund is being funded from companies profit and outside funders. Until now fund has helped 104 affected families with a payments/commitments of Rs 1.63 crores. The help provided to the staff ranged from Employee counsel sessions with personal counselors to taking care of dependents of deceased until they are self reliant, company has paid Rs. 6.7 crores in annuities to Life Insurance corporation of India. The settlement for every deceased member ranged from Rs. 36 to 85 lakhs. As discussed in the chapter management took the problem seriously chairman of Tata Group Mr. Ratan Tata personally met all the injured employees and also attended funerals of the deceased.

Talking about this kind of crisis compared to Toyota crisis, company did not have any kind of negative publicity but did gain the sympathy of all as was affected by the attack. The major blow to the company could have been its mishandling of its employees remuneration to the affected staff members but company did manage it well. Today the Taj Hotel is back to normal business.