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Posted on June 24th, 2012, by

Nowadays the word crisis is not a theoretical notion any more, rather a serious danger for any type of business and organization. There can be various types of crisis situations and problems and certainly a lot of possibilities and necessary actions, which should be taken in these situations in order to improve the position of the business. In this paper we are going to study the issues, related to crisis management, emergency planning and disaster recover.

Crisis management is said to be a rather new field in management. The major activities, included into the process of crisis management are: forecasting of the coming crisis, working out of plans how to overcome it and to deal with the potential problems, which will arise. This is evident, that for any organization it is necessary to be ready with the detailed crisis planning already before the crisis starts in order to have all chances to get out of it successfully. At the moment, when crisis already develops, certain steps are also to be taken in the frames of crisis management, thus estimating the current crisis, identifying its nature and concrete actions in order to minimize the damage it can bring, and finally recovery plans for the future. The most precise definition of crisis in this case describes it as a major, unpredictable event that threatens to harm an organization and its stakeholders (Coombs, 13). It is usually not possible to predict all the events and outcomes of a crisis, but still most of them can not be considered unexpected. The influence of any crisis as a rule influences all sides of society, like business, educational institutions, government and all other types of organizations, even individually taken families. On the one hand there are various concrete types of crisis, on the other hand there are still three characteristics common for any crisis:

–            threat to the organization;

–            elements of unexpectedness;

–            little time for taking decisions.

In the situation of crisis the major tasks of crisis management include first of all presentation of steps, aimed at elimination of technological disaster and development of the special systems for avoiding or coping with crisis situations.  It is a discipline within the broader context of management consisting of skills and techniques required to assess, understand, and cope with any serious situation, especially from the moment it first occurs to the point that recovery procedures start. (Gonzalez-Herrero, 25).

All the methods, applied in the situation of crisis by crisis management, are united in the Crisis Management Plan.

They are split into methods, used as responses to perception of crisis as well as the real situation; expectations of the possible scenarios for crisis development along with corresponding techniques and single steps correspondingly; ways of communication in the situation of crisis and so on. In order to build the precise and pertinent crisis management plan it is necessary to define the type of the crisis. Researchers distinguish the following types of crisis: Sudden crisis, such as fires, explosions, natural disasters, workplace violence .In smoldering crisis problems or issues that start out small and could be fixed or averted if someone was paying attention or recognized the potential for trouble. Bizarre crisis like the finger in the Wendy’s Restaurant Chili.A one-of-a-kind crisis Perceptual crisis such as the long-running problem Proctor & Gamble used to have with their former corporate logo. (Gonzalez-Herrero, 26).

Successful crisis management plays a very important role for many aspects of the organization functioning. It should be a strong support of the financial stability in a difficult situation, guarantee to the workers of the company, that their efforts are not useless and that company will continue to operate even under worse conditions, finally it is responsible for the credibility and reputation of the company, revealed through the consistence response to the crisis situations. Usually the methods, used by the crisis management are split into short term and long-term ones. The first type focuses on the immediate reaction to the crisis situation, whereas the second one provides the response during the restoration and recovery phases. Gonzalez-Herrero  in his turn worked out the four stages formula for the crisis management: that includes: issues management, planning-prevention, the crisis, and post-crisis (Gonzalez-Herrero, 98).

Very important is, that crisis management starts to work not after the crisis occurred already, but in advance, preparing the crisis management plans, as the first stage for facing the crisis. Some specialists even advise to work out a kind of simulation drill for checking the workability of these plans and possible need for adjustments to practical application of them in the future. Further it is necessary to define certain people, who would speak in public about the crisis situation in order to avoid rumors and spreading of unchecked information. The very first hours after the crisis breaks out are absolutely crucial for further development of the situation, thus it is necessary for the crisis management team to react as rapidly as possible and with less wrong actions. The key point for successful reaction is certainly the concrete division of the functions between all the workers and control over information spreading. The incorrect information is able to sufficiently worsen the difficult situation and be used as manipulation means by competitors. All the decisions taken by the members of the crisis management team should be considered for short- term as well as long-term outcomes.

Along with steps taken in advance and emergency steps it is necessary to make the business continuity planning.

Every crisis is able to ruin some parts of business or even the whole business. The main aim of the business continuity planning is to minimize the risk of disruption. In order to do this, it is necessary to point out the most important functions and processes, which have the direct relation to operating of the organization. For each of the critical functions the separate contingency plan should be developed. Testing of these plans is usually also done with the help of simulation practices, which would help the members of the organization to react and act quickly when real crisis appears.

In any crisis situation information providing and free information flow are very important for effective crisis management measures. The structural-functional theory identifies information flow in organizations as networks made up of members and links. Information in organizations flow in patterns called networks (Coombs, 120).

The notion of emergency management is in a way related to crisis management, is still however responsible for the different field of management. Emergency management (or disaster management) is the discipline of dealing with and avoiding risks. It is a discipline that involves preparing for disaster before it occurs, disaster response (e.g. emergency evacuation, quarantine, mass decontamination, etc.), as well as supporting, and rebuilding society after natural or human-made disasters have occurred (Barton, 88). Emergency management is an unbreakable process, in which everybody takes part in order to avoid or minimize the outcomes and influences of the possible disasters.

Actions taken depend first of all on the type and dimensions of the disaster. Usually, emergency management is conducted in accordance to the emergency plans of all levels starting from the government level. There are special institutions of civil defense responsible to presentation and fulfillment of such plans. For private organizations, like we have already mentioned, emergency management is closely related to the discussed above business continuity planning. To put it in simply words, emergency management involves the activities of preparation, mitigation and recovery from an emergency. The success of this type of management depends on several factors, such as for example not only well planned, but also well trained and coordinated actions and correspondingly support from the side of the higher management. Preparedness of the organization to the negative effects of an emergency should be also under the control of top management, because it will help to protect the workers of the company, to reduce losses and damages of products or equipment, standstills in business operating and so on. The concrete actions and measures, taken by the emergency management, depend on the social and economic conditions in the region.

However there are some unified strategies of emergency management developed, they include preparation, mitigation and recovery. Preparation stage should include the development of plans for the cases of disasters. The standard preparedness procedures include: communication plans, which are absolutely clear to all workers with easy terminology; training for emergency services and creation of community emergency response units; concrete plans for warning and evacuation of people and correspondingly equipped shelters; inventory of disaster equipment. It is necessary to remember, that the better is the preparedness stage organized the shorter would be the reaction time and thus the less damages would the disaster bring to both people and property.

The stage of mitigation is usually directed at either prevention of development of hazards into disasters or reduction of the possible disaster outcomes, when it already took place. In a way the mitigation measures are related to recovery process, especially if they are applied after the disaster happened already. The measures of mitigation are divided into structural and non-structural. Structural measures use technological solutions, like flood levees. Non-structural measures include legislation, land-use planning (e.g. the designation of nonessential land like parks to be used as flood zones), and insurance (Gonzalez-Herrero, 29). There can be various types of insurances, the organization would like to make for crisis situations. For example Property Terrorism and Sabotage Insurance is specifically aimed at covering the sabotage, mutiny, terrorism risks, mostly accepted by multinational companies and especially for the countries, where such risks are not included into other insurance programs. The situations of the product recall are usually of serious threat to manufacturing businesses, for such companies restoring of products and sustaining the cash flow are of the highest importance. For such cases, Recall Insurance is able to protect any business from ruining effects of the recalls. Food, drink, cosmetics, pharmaceuticals and tobacco products are susceptible to contamination, both accidental and by deliberate interference through malice for political or financial gain (Gonzalez-Herrero, 29).Contaminated Products Insurance is the best choice for such crisis situations, because it can help to cover recall costs and profit losses. They can also help with consultants for crisis management planning.

The final stage of the emergency management is recovery phase. Its major target is to return the damaged area to the condition it was previously. Efforts of the recovery stage include the actions, which should be undertaken already after immediate problems were solved. During the recovery stage buildings and other property are restored, infrastructure renewed and new system of employees is organized. An important aspect of effective recovery efforts is taking advantage of a window of opportunity’ for the implementation of mitigative measures that might otherwise be unpopular (Barton, 111).  Disaster Recovery Plan or Business Continuity Plan should be worked out by any organization and should guarantee the ability of the organization to recover from some unexpected event or disaster, certainly important is, that any of these plans is developed before the disaster takes place.

Such aspect as recovery of data and systems should be necessarily included into the recovery plan and should foresee backup for all information and data, needed for normal operating of the organization. For the data, which was not copied, there should be the guidelines or plans for recovering this information even without storing it. Important is also that the data is not damaged or changed during the process of recovery, otherwise there can be still problems for the further work with it.

After preparation of the recovery plan it is necessary to appoint the project manager and a team for implementing the plan. The project manager should have the standard leadership abilities, be aware of the details of the organization’s business and its structure and have experience in the sphere of information technologies and security.

The rest of the members of the team should have clear understanding of the actions, they are to launch in case of emergency and be able to perform them quickly and efficiently.

Overall, in this paper we have studied the nature of the crisis management, all the major problems, related to emergency and disaster planning; we underlined the importance of the preparedness and recovery stages for successful continuous operating of the business or organization.

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