PUBLIC RELATION: CRISIS MANAGEMENT

BY ANMOL AGARWAL 50226

ACKNOWLEDGMENT
This project would not have been possible without the possible guidance of our respected public relations and corporate image teacher, Mr Amit Sahu, whose valuable assistance and encouragement contributed to a great extent in the completion of this study. I would like to grab this opportunity to express my gratitude to him for granting me this exceptional opportunity. I have been able to study the role of public relations in a crisis situation whether it is a government crisis or a crisis that affects a private limited company through this project. I would also like to thank my family and friends for giving me the moral support to complete this report.

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CERTIFICATE
This is to certify that Anmol Agarwal (50226) of class BBS 1-A of Shaheed Sukhdev College of Business Studies, Delhi University have completed their project under my supervision. He has taken proper care and shown sincerity in completion of this project. I certify that this project is upto my certification and as per the guidelines issued by me. Mr AMIT SAHU (Subject Teacher Public Relation) (Signature)

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PREFACE
The basic aim of this project is to throw light on the role of public relations in the situation of crisis. The Mumbai terrorist attacks was a big crisis and the role of public relation was immense in handling the crisis. Also importance is given to private sector companies and how they handle their public relations in situations of crisis.

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Contents

INTRODUCTION ......................................................................................... 6 OBJECTIVES ................................................................................................ 7 PUBLIC RELATIONS .................................................................................. 8 CRISIS MANAGEMENT ...........................................................................10 TYPES OF CRISIS ......................................................................................11 THREE PHASES OF CRISIS MANAGEMENT.....................................15 METHODOLOGY ......................................................................................16 FINDINGS ....................................................................................................25 MUMBAI TERRORIST ATTACK ...........................................................26 CRISIS MANAGEMENT AT NATIONAL LEVEL ................................27 PUBLIC RELATION STRATEGY OF VARIOUS PARTIES RELATED TO THE MUMBAI TERRORIST ATTACK .......................32 MODELS AND THEORIES ASSOCIATED WITH CRISIS MANAGEMENT .........................................................................................34 PRE-STEPS INVOLVED IN CRISIS MANAGEMENT ........................36 MASTER LIST OF REPUTATION REPAIR STRATEGIES ...............38 CRISIS MANAGEMENT SUCCESS STORIES MUMBAI...................40 LESSONS LEARNED IN CRISIS MANAGEMENT IMPACT OF CATASTROPHES ON SHAREHOLDER VALUE ................................41 BHOPAL ..........................................................................................................42 FORD AND FIRESTONE TIRE AND RUBBER COMPANY ..................................43 EXECUTIVE SUMMARY/CONCLUSION .............................................44 BIBLIOGRAPHY ........................................................................................45

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INTRODUCTION
Public relations (PR) is the practice of managing the flow of information between an organization and its publics. Public relations provides an organization or individual exposure to their audiences using topics of public interest and news items that do not require direct payment. Crisis management is the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders, or the general public.

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OBJECTIVES
To highlight the importance of public relation To explain the various components of public relations To briefly explain crisis management To explain the various types of crisis To show the impact of public relations on successful handling of the Mumbai terrorist attacks To show the role of public relations in a crisis situation in large private limited companies

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PUBLIC RELATIONS
Public relations (PR) is the practice of managing the flow of information between an organization and its publics. Public relations provides an organization or individual exposure to their audiences using topics of public interest and news items that do not require direct payment. Their aim is often to persuade the public, investors, partners, employees and other stakeholders to maintain a certain point of view about the company, its leadership, products or of political decisions. Common activities include speaking at conferences, winning industry awards, working with the press, and employee communication.

METHODS, TOOLS AND TACTICS Traditional public relations tools include press releases and press kits, which are distributed to the media to generate interest from the press. Other widely used tools include brochures, newsletters and annual reports. Increasingly, companies are utilizing interactive social media outlets, such as blogs, Micro blogging and social media. Unlike the traditional tools, which allowed for only one-way communication, social media outlets allow the organization to engage in twoway communication, and receive immediate feedback from various stakeholders. There are two types of Twoway communication, Two-way asymmetrical public relations and Two-way symmetrical public relations. An asymmetrical public relation model is unbalanced. In this model an organization gets feedback from the
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public and uses it as a basis for attempting to persuade the public to change. A symmetrical public relation model means that the organization takes the interests of the public into careful consideration and public relations practitioners seek a balance between the interest of their organization and the interest of the public. Video and audio news releases (VNRs and ANRs) are often produced and distributed to TV outlets in hopes they will be used as regular program content, with or without acknowledgment of the source. One emerging theme is the application of psychological theories of impression management. Advertising dollars in traditional media productions have declined and many traditional media outlets are seeing declining circulation in favor of online and social media news sources. One site even tracked the death of newspapers As readership in traditional media shifts to online media, so have the focus of many in public relations. Social media releases, search engine optimization, content publishing, and the introduction of podcasts and video are other burgeoning trends.

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CRISIS MANAGEMENT
Crisis management is the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders, or the general public. The study of crisis management originated with the large-scale industrial and environmental disasters in the 1980's. Three elements are common to most definitions of crisis: (a) a threat to the organization, (b) the element of surprise, and (c) a short decision time. Venette argues "crisis is a process of transformation where the old system can no longer be maintained." Therefore the fourth defining quality is the need for change. If change is not needed, the event could more accurately be described as a failure or incident. In contrast to risk management, which involves assessing potential threats and finding the best ways to avoid those threats, crisis management involves dealing with threats after they have occurred. It is a discipline within the broader context of management consisting of skills and techniques required to identify, assess, understand, and cope with a serious situation, especially from the moment it first occurs to the point that recovery procedures start.

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TYPES OF CRISIS
During the crisis management process, it is important to identify types of crises in that different crises necessitate the use of different crisis management strategies. Potential crises are enormous, but crises can be clustered. Lerbinger categorized seven types of crises Natural disaster Technological crises Confrontation Malevolence Organizational Misdeeds Workplace Violence Rumors Terrorist attacks/man-made disasters NATURAL CRISIS Natural crises, typically natural disasters considered as 'acts of God,' are such environmental phenomena as earthquakes, volcanic eruptions, tornadoes and hurricanes, floods, landslides, tsunamis, storms, and droughts that threaten life, property, and the environment itself. Example: 2004 Indian Ocean earthquake (Tsunami) TECHNOLOGICAL CRISIS Technological crises are caused by human application of science and technology. Technological accidents
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inevitably occur when technology becomes complex and coupled and something goes wrong in the system as a whole (Technological breakdowns). Some technological crises occur when human error causes disruptions (Human breakdowns). People tend to assign blame for a technological disaster because technology is subject to human manipulation whereas they do not hold anyone responsible for natural disaster. When an accident creates significant environmental damage, the crisis is categorized as mega damage. Samples include software failures, industrial accidents, and oil spills. Examples: Chernobyl disaster, Exxon Valdez oil spills CONFRONTATION CRISIS Confrontation crises occur when discontented individuals and/or groups fight businesses, government, and various interest groups to win acceptance of their demands and expectations. The common type of confrontation crises is boycotts, and other types are picketing, sit-ins, ultimatums to those in authority, blockade or occupation of buildings, and resisting or disobeying police. Example: Rainbow/PUSHs (People United to Serve Humanity) boycott of Nike CRISIS OF MALEVOLENCE An organization faces a crisis of malevolence when opponents or miscreant individuals use criminal means or other extreme tactics for the purpose of expressing hostility or anger toward, or seeking gain from, a company, country, or economic system, perhaps with the aim of destabilizing or destroying it. Sample crises
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include product tampering, kidnapping, malicious rumors, terrorism, and espionage. Example: 1982 Chicago Tylenol murders CRISIS OF ORGANIZATIONAL MISDEEDS Crises occur when management takes actions it knows will harm or place stakeholders at risk for harm without adequate precautions. Lerbinger specified three different types of crises of organizational misdeeds: crises of skewed management values, crises of deception, and crises of management misconduct. CRISIS OF SKEWED MANAGEMENT VALUES Crises of skewed management values are caused when managers favor short-term economic gain and neglect broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business creed that focuses on the interests of stockholders and tends to disregard the interests of its other stakeholders such as customers, employees, and the community. Example: Sears sacrifices customer trust CRISIS OF DECEPTION Crises of deception occur when management conceals or misrepresents information about itself and its products in its dealing with consumers and others. Example: Dow Cornings silicone-gel breast implant

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CRISIS OF MANAGEMENT MISCONDUCT Some crises are caused not only by skewed values and deception but deliberate amorality and illegality. WORKPLACE VIOLENCE Crises occur when an employee or former employee commits violence against other employees on organizational grounds. Example: DuPonts Lycra RUMORS False information about an organization or its products creates crises hurting the organizations reputation. Sample is linking the organization to radical groups or stories that their products are contaminated. Example: Procter & Gamble's Logo controversy

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THREE PHASES OF CRISIS MANAGEMENT

PRE PHASE The focus is on planning, identifying adversities, building image through meaningful corporate communication. DURING CRISIS Focus is on implementation of the crisis management system reducing any type of source that creates rumors and responding quickly, honestly and diligently by highlighting the action taken. POST CRISIS The main focus should be on continuous communication, building relationship with concerned parties and constant image building.

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METHODOLOGY
The following is a survey that I conducted on personnel from Fourthgeneration Private Ltd, Future first India, KPMG, Henkel India, Norton, Saint Gobain Pvt Ltd. The main aim was on showing how the following companies reacted in a situation of crisis and how they used their public relations/ crisis management techniques to effectively solve the crisis and to plan for crisis management in the future.

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Question 1: If a crisis threatens your companys financial or reputational health, who has primary responsibility for responding and reporting back to the CEO and Board?

20%

7%

13% 2% 16%
General Counsel VP of Comms/PR CTO/VP of Tech COO/Business Continuity Risk Officer Team of some of the above None of the above

42%

0%

1 | Crisis Survey Results

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Question 2: Does your company have a formal crisis response plan?

2% 38% 60%
Yes No Don't Know

2 | Crisis Survey Results

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Question 3: If yes, when was the last time you reviewed/revised your plan?

32%

27%
Past 6 months

0% 3%

Past 12 months

8%

Past 24 months

30%

+2 years ago +5 years ago Don't know

3 | Crisis Survey Results

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Question 4: Does the plan include a reputation management section that specifically addresses social media like Twitter, Facebook or YouTube?
21% 26%

53%

Yes No Don't Know

4 | Crisis Survey Results

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Question 6: Which, if any, crises have occurred at your company during the past 3 years (check all that apply)
33 21 43 24 9 3 3 21 24
Fraud/White-Collar Govt Investigation Data Loss/Security Breach Worker Accident/Death Product Recall HazMat Release Protest/Boycott Natural Disaster

Please note that percentages add up to more than 100% as companies suffered more than one crisis

Other

6 | Crisis Survey Results

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Question 7: After a crisis occurred, did your company change how it operates?
21% 19%

60%
Major Changes Minor Changes No Changes

7 | Crisis Survey Results

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Question 8: If your company did make changes, what was the main change (check all that apply)
14
Exceeds 100% as some companies made multiple changes

4 7

14 14 4 11

7 18 21

14

Moved crucial systems off site Upgraded security programs on tech systems Added backup power Appointed Risk Officer or similar position Strengthened GC oversight Improved crisis training Conducted a crisis audit Retained crisis communications agency Purchased/upgraded business interruption/liability insurance Made improvements as part of normal business operations not because of a crises Launched social media campaign to improve reputation

8 | Crisis Survey Results

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Question 9: Which of the following crises would most negatively impact your company if they occurred? (Choose the three most likely)
Natural disaster such as a hurricane, earthquake or tornado Terrorist attack Drought/water access Power outage/blackout Epidemic Data breach/security failure Major product recall Worker accident/death Compromised research results HazMat leak Employee strike/walkout Sexual harassment or other employee-related suit 51% 16% 2% 40% 13% 62% 7% 20% 13% 4% 11% 22%

9 | Crisis Survey Results

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FINDINGS
1. The decision of how to handle a crisis is taken by a general council and not only by the top management. 2. Only 60% of the management plan. companies have a crisis

3. Only 65% of the total plans for crisis have been reviewed in accordance with the changes in the environment in the past two years. 4. Only 53% of the total companies use social media to improve public relations. 5. Only 39% of the total companies take crisis seriously and change the way they function. 6. Only about 30% of the companies made changes to the way their public relations was handled after they encountered a situation of crisis.

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MUMBAI TERRORIST ATTACK

Terrorism has assumed serious dimensions after the September 11 attack on the twin towers of World Trade Centre in United States of America. The full blown up pictures of the abrupt vertical collapse of the commercial might of USA was witnessed world over. Since then the periodical attacks are aimed at various targets by the radical groups in various parts of the globe. Stringent laws vis--vis nonpolitical swift handling of the terrorist attacks in some countries has yielded deterrent results and the countries where able to overcome this menace. However, contrary to this, India which has belatedly converted into the epicenter of terrorism, is dealt with casual approach and resulted into heavy mortality and gave a setback to the growing economy. Another attack. ! More than a couple of hundred dead and several hundreds injured in the recently Mumbai terrorist attack. The regular phenomenon of terrorist attacks in India is keeping everyone guessing as to who could be next victim of the flow of terror. Security forces did a splendid job in evacuating every possible hostage but could not save many as they were caught unaware but shown below is some strategic pattern by which we can actually earmark where the next attack would be and when.

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CRISIS MANAGEMENT AT NATIONAL LEVEL

Crisis management is a critical organizational function. Failure can result in serious harm to stakeholders, losses for an organization and its very existence. A crisis is defined as a significant threat to operation that can have negative consequences if not handled properly. It can create three related threats 1) Public safety 2) Financial loss 3) Reputation loss. It damages the organization in terms of finance. The primary concern in a crisis has to be public safety. If failure to address public safety intensifies the damage from crisis reputation and financial concern are considered after public safety has been remedied.

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EFFECTIVE CRISIS RESPONSE PLANS INCLUDE THE FOLLOWING TEN ELEMENTS:

1. A representative set of planning scenarios. It's
essential to create a set of crisis scenarios that serve to guide planning. This need not be an exhaustive list of everything that could happen, but it should represent a broad range of potential emergency situations that the organization could plausibly face. Examples include: shooter on site, epidemic, bomb threat, major fire, major external terrorist attack, major economic dislocation, infrastructure failure (power grid outage coupled with extreme heat, loss of the Web or telephone lines, disruption in the water supply).

2. A flexible set of response modules. Leaders should

be able to pull combinations of pre-set response "modules" off the shelf. Modularizing the elements of a crisis response plan provides the organization with flexibility to deal with unexpected scenarios or combinations of scenarios. This is important because real crises rarely directly match planning scenarios. If response options aren't flexible and modularized, novel events or combinations of events can yield ineffective or "brittle" responses. Response modules might include: facility lockdown, police or fire response, evacuation, isolation (preventing people from entering facilities), medical containment (response to significant epidemic), grief management, as well as external communication to media and other external constituencies.
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3. A plan that matches response modules to scenarios.

This is the core plan that links each of the planning scenarios to the response modules that will be immediately activated. For example, a "shooter on site" event triggers an immediate facility lockdown plus a police response plus preset communication protocols to convene the crisis-response team and warn staff.

4. A designated chain of command. One finding of

research on crisis response is that decentralized organizations, which are so good at helping promote innovation in normal times, prove to be woefully inadequate in times of crisis. Crisis demands a rapid centralized response and this, in turn, requires a very clear line of command and the ability to shift into what the military term "war fighting mode" rapidly. Otherwise the organization responds incoherently. This means creating a centralized parallel organization, in which the leader has a designated deputy and they, too, have a backup who would take command if the others were unavailable or disabled.

5. Preset activation protocols. Preset signals for

activating and coordinating the various response modules in the event of a crisis situation. There have to be clear triggers to move the organization from "normal" to "war-fighting" mode as well as to activate specific response modules. There also have to be "all clear" signals that shift the organization back to its normal operating mode.
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6. A command post and backup. This should be a

location that can be rapidly converted to be used by the crisis response team. Requirements include the ability to rapidly connect many lines of communication, to have access to external media (TV coverage), to provide access to crisis management plans, etc. In addition, there should be a backup command post located off-site in the event that evacuation is necessary. This could be located at a home or other location, so long as the necessary bandwidth for communication and other resources is put in place so that set-up can be swift.

7. Clear communication channels. Easily activated

channels for reaching people on site and outside. For example, use of internal speakers and TV monitors to make announcements. A shooter on site, for example, triggers facility lockdown and police response but also rapid announcement that everyone should stay where they are, lock doors, hide, etc. To the extent possible there should be redundancy in these channels including backups that are not linked to the telephone system or the Web. Messages should be composed in advance. There also should be mechanisms for rapidly locating key staff (e.g. "check in" Web pages, phone-in lines).

8. Backup resources. Critical resource stocks to be

tapped if necessary. Examples include backup power generation/gas supplies, modest reserves of food and water, and medical supplies. Agreements should also be negotiated with external agencies to provide specific
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resources in time of crisis, for example augmented private security.

9. Regular simulation exercises. The best plans are

worthless if they exist only on paper. There needs to be regular, at least biannual, exercises conducted by the crisis response team, and regular testing of channels, inventorying of resources, and the like. These tests should be done regularly, but not scheduled in order to test speed of response.

10. Disciplined post-crisis review. Each crisis provides an

opportunity for organizational learning to occur and plans to be revised. But this learning only occurs if the mechanisms are in place to make it happen. The crisis response team should conduct a post-crisis review after each significant event. The guiding questions should be: What went well and what went poorly? What are the key lessons learned

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PUBLIC RELATION STRATEGY OF VARIOUS PARTIES RELATED TO THE MUMBAI TERRORIST ATTACK
1.Ratan Tata (Tata group): Individually visited the families of the seventeen employees who lost their lives at work. He called them heroes pointing out that they curbed the general human instinct of running away during the attack and placed safety of guest over their own well being. 2. Government The government had the major task of making the people of the country feel safe when they walk on road. The government on their part made all efforts to make the handling of the situation feel effortless. All major political leaders addressing the public on the issue and giving them the assurance that a crisis of this magnitude would never again happen in the country issued statements. 3.Opposition party The leader of the opposition at that time Mr. lk advani issued a joint statement with the prime minister showing that during a crisis that effected the entire country everyone was united. the usual reaction of the opposition on the failure of the ruling party is generally that of showing disapproval but in a situation like this they created positive public image by supporting rather opposing the ruling party.
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4.Tourism industry The tourism rate of India was 11.5% of the total population at 23 million after the terrorist attack the tourism industry was terribly effected. The tourism rate was at an all time low of 6.2% that was a decrease of 8.6 million tourist per year. They took several steps to counter the following situation. They were: 1.Subsidized ticket rates on all domestic as well as international aircrafts on arrival in Mumbai. 2. Various extra benefits like pick up service from airport to hotel to ensure safe transportation were introduced by hotel industry. 3.Increasing measure of security like x-ray scanners and metal rod were installed at all major tourist spots to reduce the threat of terrorist activities, as complete elimination is impossible. 5.Leopard caf The caf used the bullet shots as a positive sign to show it as a sign of remembrance for the staff that passed away during the attack. it has now become a tourist attraction and has increased their sales three fold in the past 3 years.

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MODELS AND THEORIES ASSOCIATED WITH CRISIS MANAGEMENT

Crisis Management Model Successfully diffusing a crisis requires an understanding of how to handle a crisis before it occurs. GonzalezHerrero and Pratt created a four-phase crisis management model process that includes: issues management, planning-prevention, the crisis, and postcrisis (Gonzalez-Herrero and Pratt, 1995). Management Crisis Planning No nation looks forward to facing a situation that causes a significant disruption to their mass especially one that stimulates extensive media coverage. Public scrutiny can result in a negative financial, political, legal and government impact. Crisis management planning deals with providing the best response to a crisis. Contingency Planning Preparing contingency plans in advance, as part of a crisis management plan, is the first step to ensuring a nation is appropriately prepared for a crisis. Crisis management teams can rehearse a crisis plan by developing a simulated scenario to use as a drill. The plan should clearly stipulate that the only people to speak publicly about the crisis are the designated persons, such as the nation spokesperson or crisis team members. The first hours after a crisis breaks are the most crucial, so
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working with speed and efficiency is important, and the plan should indicate how quickly each function should be performed. When preparing to offer a statement externally as well as internally, information should be accurate. Providing incorrect or manipulated information has a tendency to backfire and will greatly exacerbate the situation. The contingency plan should contain information and guidance that will help decision makers to consider not only the short-term consequences, but the long-term effects of every decision. Structural-Functional Systems Theory Considering a nation as an organization for a while when the crisis stuck. Providing information to an organization or nation in a time of crisis is critical to effective crisis management. Structural-functional systems theory addresses the intricacies of information networks and levels of command making up organizational communication. 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. Diffusion of Innovation Theory Another theory that can be applied to the sharing of information is Diffusion of Innovation Theory. Developed by Everett Rogers, the theory describes how innovation is disseminated and communicated through certain channels over a period of time. Diffusion of innovation in communication occurs when an individual communicates a new idea to one or several others. At its most elementary form, the process involves:
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(1) An innovation, (2) An individual or other unit of adoption that has knowledge of or experience with using the innovation, (3) Another individual or other unit that does not yet have knowledge of the innovation, and (4) A communication channel connecting the two units. A communication channel is the means by which messages get from one individual to another.

PRE-STEPS INVOLVED IN CRISIS MANAGEMENT

1) A crisis management plan has to be developed firstly and updated periodically. 2) Create and designate crisis management team and proper training should be provided. 3) Pre- draft select crisis management including content for dark websites and templates for crisis statements have the legal department review and preapprove these messages. 4) Media person should be trained before hand-to-hand crisis effectively. Dont 1) Avoid the phrase no comment. 2) Avoid jargon or technical terms. 3) Avoid nervous habit that people interrupt or deception. 4) Avoid distracting nervous gestures such as pacing.
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Dos 1) Present information clearly. 2) Appear pleasant on camera. 3) Media person needs to have strong eye contact. 4) Media person should have latest crisis information. 5) Be prepared to use Internet as one of the channel for reaching public. 6) Be prepared to use unique websites or part of your websites to address crisis concern. CRISIS RESPONSE Public relation plays are critical role in crisis responses by helping to develop the messages that are sent to public various publics. Initial crisis response is what Government does and says after the crisis hits. Arpan and Korko-Ewoldren (2005) conducted a study that documented how a quick early response allows an organization to generate greater credibility than a slow response. Crisis management will make it easier for crisis management to respond quickly. Government should be ready to provide stress and trauma counseling to victims of the crisis and their families.

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MASTER LIST OF REPUTATION REPAIR STRATEGIES

Attack the accuser: crisis manager confronts the person or group claiming something is wrong with the organization. Denial: crisis manager asserts that there is no crisis. Scapegoat: crisis manager blames some person or group outside of the organization for the crisis. Excuse: crisis manager minimizes organizational responsibility by denying intent to do harm and/or claiming inability to control the events that triggered the crisis. Provocation: crisis was a result of response to some one elses actions. Defeasibility: lack of information about events leading to crisis situation. Accidental: lack of control over events leading to crisis situation. Good intentions: organization meant to do well. Justification: crisis manager minimizes the perceived damage caused by the crisis. Reminder: crisis manager tell stakeholder about the past good works of the organization.
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 Interrogation: crisis manager praises stakeholders for their actions. Compensation: crisis manager offers money or gifts to victims. Apology: crisis manager indicates the organization takes full responsibility for the crisis and asks Stakeholders for forgiveness.

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CRISIS MANAGEMENT SUCCESS STORIES MUMBAI

In 2008, 26 November, 9 terrorists attacked Taj hotel, Oberoi Hotel and Nariman House at Mumbai and killed almost 200 people and about 300 were seriously injured in these three places. It took three days for NSG commandos to overcome these terrorists. In the three days long fight, the commandos were able to kill 8 terrorists and captured one injured. Despite the terror attack, the basic feature of Mumbai as a safe and secure city for everyone, whether he is living in a slum or is the CEO of a corporate giant, has not changed. Parents in the city don't worry about their young professional daughters coming home late at night in public transport. Having said that, there is no guarantee that this -- a better law-and-order situation in the city compared with other metros -- will protect you from a terror attack.

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Lessons Learned In Crisis Management Impact Of Catastrophes On Shareholder Value

One of the foremost-recognized studies conducted on the impact of a catastrophe on the stock value of an organization was completed by Dr Rory Knight and Dr Deborah Pretty, (1995, Templeton College, University of Oxford - commissioned by the Sedgewick Group). This undertook a detailed analysis of the stock price, (post impact), of organizations that had experienced catastrophes. The study identified organizations that recovered and even exceeded pre-catastrophe stock price, (Recoveries), and those that did not recover on stock price, (Non-recoveries). The average cumulative impact on shareholder value for the recoveries was 5% plus on their original stock value. So the net impact on shareholder value by this stage was actually positive. The non-recoverers remained more or less unchanged between days 5 and 50 after the catastrophe, but suffered a net negative cumulative impact of almost 15% on their stock price up to one year afterwards. One of the key conclusions of this study is that "Effective management of the consequences of catastrophes would appear to be a more significant factor than whether catastrophe insurance hedges the economic impact of the catastrophe". While there are technical elements to this report it is highly recommended to those who wish to engage their senior management in the value of crisis management
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Bhopal
The Bhopal disaster in which poor communication before, during, and after the crisis cost thousands of lives, illustrates the importance of incorporating crosscultural communication in crisis management Crisis Management- a Case Study on Mumbai Terrorist Attack 367 Plans. According to American Universitys Trade Environmental Database Case Studies (1997), local residents were not sure how to react to warnings of potential threats from the Union Carbide plant. Operating manuals printed only in English is an extreme example of mismanagement but indicative of systemic barriers to information diffusion. According to Union Carbides own chronology of the incident (2006), a day after the crisis Union Carbides upper management arrived in India but was unable to assist in the relief efforts because they were placed under house arrest by the Indian government. Symbolic intervention can be counter productive; a crisis management strategy can help upper management make more calculated decisions in how they should respond to disaster scenarios. The Bhopal incident illustrates the difficulty in consistently applying management standards to multi- national operations and the blame shifting that often results from the lack of a clear management plan (Shrivastava, 1987).

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Ford and Firestone Tire and Rubber Company

The Ford-Firestone dispute transpired in August 2000. In response to claims that their 15-inch Wilderness AT, radial ATX and ATX II tire treads were separating from the tire coreleading to grisly, spectacular crashesBridgestone/Firestone recalled 6.5 million tires. These tires were mostly used on the Ford Explorer, the world's top-selling sport utility vehicle (SUV) (Ackman, 2001).The two companies committed three major blunders early on, say crisis experts. First, they blamed consumers for not inflating their tires properly. Then they blamed each other for faulty tires and faulty vehicle design. Then they said very little about what they were doing to solve a problem that had caused more than 100 deathsuntil they got called to Washington to testify before Congress (Warner, 2002).

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EXECUTIVE SUMMARY/CONCLUSION
It is difficult to distill all that is known about crisis management into one, concise entry. I have tried to identify the best practices and lessons created by crisis management researchers and analysts. While crisis begin as a negative/threat, effective crisis management can minimize the damage and in some case allow an organization to emerge stronger than before the crisis. However, crisis are not the ideal way to improve an organization. But no organization is immune from a crisis so all must do their best to prepare for one. This entry provides a number of ideas that can be incorporated into an effective crisis management program. The world is not undergoing a crisis in the system but a crisis of the system in which the real economy has become subservient to financial economy. All solutions must be based on this underling truth. Nothing less than a Global Round on a Reconstructed Economic Order is required to address an integrated reform and restructuring of the global economy- including finance, trade, investment, production, corporate codes of conduct, labor standards, systemic risk and environmental regulation. The efforts of the G20 are puny compared to the comprehensive and serious process appropriate to the scale of these converging crises of the 21st century.

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BIBLIOGRAPHY
http:// www.news.bbc.co.uk/1/hi/magazine/default.stm http://timesofindia.indiatimes.com/specialcover age/3296778.cms http://www.ndtv.com/convergence/ndtv/default. aspx Augustine, N.R. (1995, November/December). Managing the crisis you tried to prevent. Harvard Business Review, 73(6), 147-158. Benoit, W.L. (1997). Image repair discourse and crisis communication. Public Relations Review. 23(2), 177-180. Cohen, J. R. (1999). Advising clients to apologize. S. California lab review, 72, 109-131. Coombs, W. T. (2007a). Ongoing crisis communication: Planning, Managing and responding (2nd ed.). Los Angeles: Sage. Coombs, W. T. (2007b). Protecting organization reputations during a crisis: the development and application of situational crisis communication theory. Corporate reputation Review, 10, 1- 14. Downing, J.R. (2003). American Airlines use of mediated employee channels after the 9/11 attacks. Public Relation Review, 30, 37-48. Hearit, K. M. (2006). Crisis management by apology: Corporate response to allegations of wrongdoing. Mahwah, NJ: Lawrence Erlbaum Associates.
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