From Wikipedia, the free encyclopedia

Crisis management involves identifying a crisis, planning a response to the crisis and confronting and resolving the crisis. Crisis management can be applied in almost any field of endeavor, but it is most commonly used in international relations, political science, business and management. For more about crisis management in international relations, see International crisis.

Many school districts have developed crisis response guides, which identify potential situations such as fires and other disasters, bomb threats, confronting unwelcome visitors, violence (and threats thereof) and the death of a student.

In general terms, the theory of crisis management can be divided into crisis bargaining and negotiation, crisis decision making, and crisis dynamics.

In a crisis, always sit down and think hard about your decision, and for as long as needed (or allowed) about ways in which you can resolve it.

it has to be you. that applies even if somebody else has to carry the burden of action - how you brief, direct and control the other or other will vital to the outcome.

In business there are three main types of crisis:

• Financial crisis - short term liquidity or cash flow problems; and long term bankruptcy problems
• Public relations crisis - More commonly called "crisis communications," negative publicity that could adversely affect the success of the company
• Strategic crisis - changes in the business environment that call the viability of the company into question - for example the introduction of the automobile was a strategic crisis for buggy-whip manufacturers

Certain preliminary measures need to be taken to prevent a crisis. Companies should always plan ahead and project likely outcomes. They should avoid decisions that have the potential to turn into a crisis. They should know their "worst case scenarios" and have a contingency plan for it.

If prevention has not been successful, then the following six steps should be undertaken immediately:

• Do an objective assessment of the cause(s) of the crisis.
• Determine whether the cause(s) will have a long term effect or whether it will be a short term phenomena.
• Project the most likely course of events.
• Focus all the most capable people (including yourself) on activities that will mitigate or eliminate the problem.
• Look for opportunities - there could be a "silver lining".
• Immediately act to guard cash flow.

If it is a cashflow crisis do not wait for further evidence before acting. Immediately take actions to maintain or increase cash flow. These could include:

• accelerating accounts receivable payments even if this requires the granting of discounts
• decelerating accounts payable payments even if this means losing discounts
• increasing short term sales
• maintaining or increasing profit margins on sales if possible
• reducing expenses:
  • eliminating non-essential expenses
  • selling non-mission critical assets
  • reducing payroll
  • outsourcing non-mission critical operations
• renegotiating loans and other debts wherever possible - obtaining interest-only loans or extended payment terms

If it is a public relations crisis, act immediately to prevent or counter the spread of the negative information. Containment may require intense media activities. Use every media available to you to provide a counter argument or question the credibility of the original negative publicity.

• List of management topics
• List of finance topics
• Public relations
• Publicity
• Management
• Strategic management
• Finance
• List of events known as crises
• Media training

Crisis Management Providers

• UK media and crisis training
• Fix It! - Managing a crisis is managing change
• Free Crisis Manager Newsletter archive
• Real World Crisis Management