CRISIS MANAGEMENT
Crisis can affect all segments of Society
Educational institutions Business & Govt. Family
Crisis
INTRODUCTION
Crisis management includes the development of
plans to reduce the risk of a crisis occurring and to deal with any crises that do arise, and the implementation of these plans so as to minimize the impact of crises and assist the organization to recover from them. Crisis situations may occur as a result of external factors such as the development of a new product by a competitoror internal factors such as a product failure or faulty decision making, and often involve the need to make quick decisions.
TYPES OF CRISIS
1. 2. 3. 4. 5. 6. 7. On the Basis of Social Settings: Domestic Crisis Industrial Crisis Natural Crisis Professional Crisis Social Crisis Financial Crisis
IMPORTANCE OF PR
Develops Good relations with customers.
Helps to Build and create reputation and
image of the company. Maintains Companys Credibility. Bridges Communication Gap. PR is essential for a successful business
Three main stages of Crisis
Crisis Response Pre Crisis Post Crisis
Stages
Pre Crisis Phase
The pre-crisis phase is concerned with prevention and
preparation. Prevention involves seeking to reduce known risks that could lead to a crisis. This is part of an Organizations risk management program. reparation involves creating the crisis P management Plan, selecting and training the crisis management team, and conducting exercises to test the Crisis management plan and crisis management team.
Crisis Response
The crisis response is what management does and says
after the crisis hits. Public relations plays a critical role in the crisis response by helping to develop the messages that are sent to various publics. A great deal of research has examined the crisis response. That research has been divided into two sections: (1) The initial crisis response and (2) Reputation repair and behavioral intentions
Post Crisis Phase
In the post-crisis phase, the organization is returning to
business as usual. The crisis is no longer the focal point of managements attention but still requires some attention.
Examples of Crisis Management
Odwalla
Exxon
Cadbury
Case study Odwalla
Odwalla (pronounced "odewalla") is the healthconscious juice company which began a couple of decades ago when Greg Stelt enpohl, Gerry Percy and Bonnie Bassett began squeezing fresh oranges on a $200 hand juicer. The company was growing strongly with annual sales rising 30% per year and approaching $90m. The company had established a strong brand with enormous customer loyalty.
Case study Odwalla
Odwalla juice e-coil outbreak in 1996
Health officials in Washington state informed the
company that they had discovered a link between several cases of E.coil 0157:H7 andOdwalla fresh apple juice.
Case study Odwalla
One child died and more than 60 people in
the Western United States and Canada became sick after drinking the juice. Sales plummeted by 90%,Odwalla's stock price fell 34%. Customers filed more than 20 personalinjury lawsuits and the company looked as though it could well be destroyed.
What Did the Company DO ?
Odwalla's CEO Stephen Williamson ordered a
complete recall of all products containing apple or carrot juice. This recall covered around 4,600 retail outlets in 7 states. On all media interviews, Williamson expressed sympathy and regret for all those affected and immediately promised that the company would pay all medical costs.
What Did the Company DO ?
Internal communications:-
Williamson conducted regular company-wide conference calls on a daily basis, giving employees the chance to ask questions and get the latest information. This approach proved so popular that the practice of quarterly calls survived the crisis. External communications:Within 24 hours, the company had an explanatory web site (its first) that received 20,000 hits in 48 hours. All possible attempts were made to provide up to the minute, accurate information.
Fixing the PROBLEM
The next step was to tackle the problem of contamination. The company switched from unpasteurized juice to a
process called "flash pasteurization" which would guarantee that E-coli had been destroyed without compromising flavour. Within months of the outbreak, the company had in place what some experts described as "the most comprehensive quality control and safety system in the fresh juice industry. The new process was communicated in all advertising and public outreach campaigns.
Conclusion
The company's values spoke of nourishing people and
when the crisis came it was an adherence to honest, straight talking and accepting responsibility that helped to get the company through. There are critics who refuse to credit the company with any integrity whatsoever - but even these will concede that as an exercise in crisis management, Odwalla stands as an example of best practice that few can match.
The year after the crisis, Odwalla was voted "Best Brand
Name in the Bay Area" by San Francisco Magazine. This was the first indication amongst many that Odwalla's reputation had survived.
