Crisis Management

In a financial crisis, a business unable to pay off debts, and its assets lose value. The business should move funds into covering the short-term costs, such as salaries and office operations. Then analyze revenue sources to secure long term financial security.

Personnel crises arise due to unethical or illegal misconduct of a stakeholder. Executives should evaluate the situation and laws violated, then act to avoid severe backlash to the business—for example, disciplinary action and transparence disclosure to media.

In an organization crisis, customers are wronged by the company. Executives should develop an organizational culture that addresses customer needs. They may discipline employees who cause a crisis. Also, they should apologize or compensate wronged customers.

A technological crisis occurs when business tech crashes. A business should identify warning signals, and the tech provider should resolve the crisis immediately (Mikušová & Horváthová, 2019, p. 1849). Affected customers should be informed to avoid confusion of inconveniences.

Natural crises occur naturally, such as earthquakes. Proactive crisis management may help in setting up offices or stores in disaster-resilient locations. Executives should design an emergency response and contingency plan in case offices are inaccessible.

References

Mikušová, M., & Horváthová, P. (2019). Prepared for a crisis? Basic elements of crisis management in an organisation. Economic Research-Ekonomska Istraživanja, 32(1), 1844-1868. doi: 10.1080/1331677x.2019.1640625