Essay On Crisis Management

In today's fast-paced business world, organisations must adapt quickly to keep up with the competition. Identifying and preparing for anticipated future changes is thus essential for companies. But Kash and Darling (1998) admit that crises are unavoidable, and hence organisations must be appropriately equipped to cope with them. In spite of this, according to Kash and Darling (1998), the majority of organisations fail to take effective activities to cope with crises.

 

Additionally, these leaders will only plan for circumstances that might result in the complete loss of their firm. This strategy is discouraged by Kash and Darling (1998) because neglecting a problem might greatly intensify it. Moreover, according to Kash and Darling (1998), crisis develops in a sequence of concurrent phases. Prodromal crisis stage, acute crisis stage, chronic crisis stage, and crisis resolution stage are some of these phases. Organizational leaders must create preventive measures while attempting to handle a crisis. These precautions mostly concentrate on identifying possible problems before they materialise. Additionally, strategic forecasting, contingency planning, problem analysis and scenario planning may all assist a company better handle crises when they arise (Kash and Darling, 1998).

 

There are several ways that organisations may step in during a crisis. However, Kash and Darling (1998) contend that for businesses managing a crisis, acknowledging the truth of a situation is crucial. Failure to do so limits an organization's capacity to respond to the issue swiftly and forcefully. Prior to the occurrence of a crisis, organisations may take a few simple steps to prepare. Kash and Darling (1998) suggest these techniques concentrate on two measures that any company should do. Creating a crisis management team and putting together strategic teams to do scenario planning are two examples of these activities.

 

The article by Kash and Darling (1998) examines the crisis management strategies used by a few firms. The purpose of this study is to evaluate how well the various groups dealt with the current situation. Johnson & Johnson is one of the businesses Kash and Darling (1998) examine. Following the deaths of two customers who took cyanide-laced Tylenol products made and marketed by the corporation in 1983, a crisis was created for the company. The second company analyzed by Kash and Darling (1998) is Nike. The corporation faced a dilemma in June 1997 when a debate erupted over the design of their summer Hoop basketball shoe line. Shoe companies have been criticised by Muslims for printing the word "air" in blazing letters on their shoes, similar to the Arabic term for God. Finally, Kash and Darling (1998) looked at Jack in the Box, which is the last firm they examined. After a number of clients began experiencing stomach cramps after dining at the firm's restaurants, the company was forced to cope with a problem.

 

Preventive or intervention measures will be taken by organisations when there is a crisis. This is done to lessen the effect of a crisis on the organisation and to reduce the possibility of a crisis. In order to prevent the emergence of new dangers or the aggravation of already existing dangers, an organisation must implement preventive measures (Hubbard, 2020). As a contrast, intervention steps are implemented by an organisation after a danger has already occurred to prevent more damage from being caused (Hubbard, 2020). Preventative steps were taken by Johnson & Johnson while dealing with the Tylenol problem. According to Kash and Darling (1998) repurchasing contaminated Tylenol items from consumers and retailers cost the business millions of dollars. As part of this process, the firm retooled its packaging to ensure that the safety and protection of its clients was paramount. (Kash & Darling, 1998). These actions were preventative because they stopped the crisis from becoming worse and decreased the possibility that it would ever happen again (Hubbard, 2020). In relation to Nike, after the Council of American-Islamic Relations threatened to boycott Nike, the sportswear manufacturer had to issue an apology, return the 38,000 pairs of shoes involved in the controversy, and end its shoe line (Kash & Darling, 1998). As a result of the crisis, the corporation attempted to minimise the damage it would inflict on itself using this technique (Hubbard, 2020). After the situation showed itself, Jack in the Box placed the responsibility elsewhere. This was a crisis intervention since it aimed to lessen the harm the crisis had on the firm.

 

 

The kind of risk an organisation faces as a result of a crisis is heavily influenced by how it responds to a crisis. In most cases, an organization's response to a crisis may be classified as either proactive or reactive (Smith & Merritt, 2020). Despite the existence of these two options, businesses should strive to develop proactive rather than reactive solutions. That's because proactive actions drastically modify the character of a company's risk, both by lowering the likelihood of a crisis intensifying and by limiting the effect of a crisis (Smith & Merritt, 2020). 

 

A company's approach to leadership has an influence on the adoption of risk management measures. Transformational, transactional, and authoritarian leadership styles may all be used by organisational leaders (Khan et al., 2021). The main goal of transformational leaders is to question the status quo by motivating and enabling their team members to find novel solutions to problems. In transactional leadership, rewards and punishment are used to inspire workers, while authoritative leaders exercise control over employees' obligations and work procedures (Khan et al., 2021). In addition, authoritative leaders are able to make choices without consulting their people. Risk management in a business is influenced by several different types of executive leadership styles. Despite this, HR department executives should take a transformative leadership style (Khan et al., 2021). With this strategy, managers may work with staff to identify the many risks the business faces and jointly develop and execute practical solutions to reduce those risks (Khan et al., 2021). 

 

Identifying and implementing strategies to reduce risk is essential, since failing to do so increases the damage an organisation suffers if the risk materialises. All stakeholders must be included in the development and execution of any risk reduction strategy to ensure its success (Hubbard, 2020). Companies should be upfront with their stakeholders about the dangers they incur while doing this. This method of risk mitigation is also moral since it makes sure that all relevant parties are fully informed about the hazards (Hubbard, 2020). Participation in the process of risk management will thus be more welcome from stakeholders.

 

Hubbard, D. W. (2020). The failure of risk management: Why it's broken and how to fix it. John Wiley & Sons.

 

 

Kash, T. J., & Darling, J. R. (1998). Crisis management: prevention, diagnosis, and intervention. Leadership & Organization Development Journal, 19(4), 179-186.

 

 

Khan, S. H., Yasmin, H., & Rashid, A. (2021). Mediation of Risk Perception Between Leadership Styles and Risk Management Styles of Managers. Global Management Sciences Review, VI, 6, 74-81.

 

 

Smith, P. G., & Merritt, G. M. (2020). Proactive Risk Management. Productivity Press.