Crisis management constitutes in identifying external as well as internal threats to an organization and the methods needed to deal with and successfully overcome these threats.
Crisis management often requires decisions to be made within a short span of time as crises often take place suddenly. In order to cope up with the unpredictability and suddenness of a crisis, well-structured organizations often keep ready a crisis management plan.
Crisis management calls for application of effective strategies to help an organization efficiently deal with the crisis.
Crises invariably demand that decisions be made quickly to restrict the repercussions and damage to the organization. For this reason, most organizations appoint a senior well-qualified and seasoned executive to serve as crisis manager.
One of the best crisis management practices is to put in place a suitable monitoring system to detect early warning signals and take preventive measures.
Many organizations create and train a crisis management team or hire an external crisis management firm with a proven track record in dealing with crises.
Crises are caused due to a variety of factors such as- natural disasters, labor strikes, workplace violence, man-made accidents, economic slowdown etc.
Whatever the cause, crises pose a serious threat to the reputation of the organization and they can also impair the financial stability of the organization.
Organizations that have an expert crisis management team in place mostly emerge from the crisis unscathed with their business operations intact.
What determines whether an organization will successfully overcome a crisis or not lies in its ability to respond to the crisis.
Crisis management should not be confused with risk management. The concept of crisis management originated with the massive industrial fiasco and environmental disasters of the 1980s.
Risk management essentially involves assessing possible threats in advance and finding timely solutions to avert these threats.
Crisis management, on the other hand, involves dealing with impending threats before, during, and after they have occurred.
Crisis management calls for special skills and techniques to identify the crisis, evaluate its impact, understand its nature, and ably cope with it from the moment it occurs to the stage the recovery procedures get completed.