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ARTICLE 26
CRISIS MANAGEMENT
Nellie J. Brown, Nancy J. Lampen
C
risis management is an ongoing, systematic, and disciplined process that
attempts to identify an organizations vulnerabilities to a wide range of
problems in order to prevent crises from occurring. While not all crises can be
avoided, they can be managedthrough planning and effective communication
(Mitroff & Anagnos, 2005). What makes a crisis? A crisis is either (1) not having
sufcient or accurate information to make decisions or (2) lacking the resources to
control the situation; and along with these, an escalating ow of events that needs
to be managed. During a crisis, the organization has to manage the problem while
under intense scrutiny from outsiders, the media, and its own workforce. This can
lead to a siege mentality whereby the management team may feel they are under
attack from all sides. How well the crisis is managed may determine the long-term
survival of the organization.
Business Case for Crisis Management
A study of Fortune 500 organizations found that the companies that were best-
prepared for crises planned for a larger number and wider variety of crises than
they had faced in the past (Mitroff & Alpaslan, 2003). Crisis-prone organizations
prepared to handle only the types of crises they had already suffered, and not
The Encvclopedia of Human Resource Management. Short Entries
Edited by William J. Rothwell
Copyright 2012 John Wiley & Sons, Inc.
148 The Encyclopedia of Human Resource Management: Volume One
even all of these. Research indicates that most companies are not prepared to
manage an unfamiliar crisis. Planning for crises reduces their incidence and pro-
motes nancial stability: crisis-prepared organizations stay in business longer and
are more protable.
Crisis Management Team
Goal/Membership/Tasks
The goal of a crisis management team is to develop a crisis plan by analyzing
and evaluating the organizations vulnerability to crises and then developing
crisis response strategies and interventions. To better identify possible threats,
it is important that members of the team view the organization from different
perspectives. Team membership may include: upper levels of management and
the union, human resources, the employee assistance program, security, health
and safety, nancial and legal departments, operations (including various work-
sites), maintenance, public relations, and (highly recommended) at least one
front-line employee.
Tasks
The tasks of the team include:
Conducting a crisis audit to determine vulnerabilities as seen by all functions
within the organization (see guidelines below);
Reviewing the current policies and procedures for managing crises;
Developing a comprehensive plan that addresses how to respond to a variety
of crises and their management; and
Writing a crisis response manual that lets employees know their responsibili-
ties during a crisis. The manual addresses who will manage the crisis, the ow
of information during a crisis, and who will be in charge of communicating
about the crisis.
Conducting a Vulnerability Assessment
A vulnerability assessment is a tool to assist people to think in a structured
way about the unthinkable. The crisis management team conducts the vulnerabil-
ity assessment by asking key employees for their views on possible vulnerabilities
and any natural- or human-caused crises the organization could face (Mitroff &
Crisis Management 149
Pearson, 1993). The team also reviews crises that have happened to organiza-
tions similar to their own. The team evaluates the extent of damage these crises
could cause and the effects they would have on employees, the organization, and
its customers. Next, the team examines the preparedness of the organization to
manage these crises, considering what would happen if more than one of these
crises occurred at the same time. The team should also consider how the orga-
nization would cope if one or more of these crises occurred concurrently with a
natural disaster.
The assessment should identify the most-likely or most-damaging crises that
could occur in the workplace and especially look for those that the organization
is not prepared to manage. Organizations need to anticipate problems of all
sorts; some examples could be major equipment failures, serious legal trouble,
lost intellectual property, a damaged reputation, or an outbreak of illness in the
workplace.
How does your organization become aware of a crisis or impending crisis?
What signals or information would suggest that a crisis may be unfolding? It is
important for your organization to design crisis detection mechanisms and foster
a culture that supports signal detection. You want bad news to travel upward in
the organization so that you can deal with the crisis at its earliest stages. You may
want to consider recognizing/rewarding people for alerting the organization to
possible hazards.
Developing a Crisis Management Plan
A crisis management plan provides guidelines for identifying events and monitor-
ing or evaluating incidents or situations, as well as providing procedures for notify-
ing and communicating effectively with employees, stakeholders (any persons or
entities who have an interest in the outcome of the situation), the media, and the
public. It lists specic staff and their crisis responsibilities and lists the organiza-
tions key stakeholders, including how communication will be handled with each
of them. In a crisis, all personnel need to know what their individual responsibili-
ties are and to whom or where to report.
Crisis Recovery Plan
To ensure a speedy recovery after a crisis has occurred, it is essential for the orga-
nization to have determined in advance what is needed for business continuity
and recovery. Developing well-thought-out crisis scenarios provides an effective
150 The Encyclopedia of Human Resource Management: Volume One
tool for crisis planning: it makes clear what competencies are needed for an orga-
nization to perform well in the face of adversity, reveals whats required for an
organization to recover, and enables an enterprise to develop early warning
systemssystems that can avert trouble before a crisis emerges.
A scenario is a story of how you envision a particular type of problem or
crisis would happen in your organization. For example, a scenario involving a
health crisis might unfold as a serious outbreak of inuenza that reduces your
workforces attendance by 60 percent, so that there are personnel missing who
cannot conduct your businesss principal functions. Scenarios help employees to
envision the crisis in specic terms, imagining the reality of the incident, as well
as in general terms, crafting a pattern to follow in the event of similar crises. A
successful recovery includes identifying minimum needs to resume operations,
building in redundancies for critical functions or services, as well as identifying
the stakeholders most important to recovery (Blythe, 2002).
Communicating During and After a Crisis
Managing a crisis means performing two tasks simultaneously: managing the
crisis itself and managing the communications (Mitroff & Pearson, 1993). The
effectiveness of the communication shapes peoples perceptions of the crisis. Just
as managing a crisis is extremely difcult without a plan, it is important to have
a communication management plan. To stay on top of a crisis, it is important
to determine how information will be collected, evaluated, and disseminated to
employees, the media, and other stakeholders during a crisisincluding methods
and channels, how information will be gathered, and where and how it will be
analyzed and stored. With such a plan, as information ows into the organization,
it is collected and addressed so that potential problems can be detected and dealt
with before they, in turn, become crises.
Poor communications may turn a minor problem into news headlines that
need to be addressed and managed. When information is not communicated
in a timely manner, a vacuum is created and the grapevine takes over, perhaps
spreading misinformation and rumors. Next, the media calls or arrives on the
scene and asks questions like: When did you rst learn of this problem? or
Why didnt you know about this problem before now? A crisis affects employ-
ees, too, and may cause them to not be thinking as clearly as they might under
non-crisis circumstances. Preparing templates and core messages in advance
allows employees to concentrate on the actual crisis instead of having to impro-
vise in times of stress. Spokespeople should be identied and trained in advance,
which increases the likelihood that communication about the crisis will be han-
dled effectively (Cohn, 2000).
Crisis Management 151
Troubleshooting the Crisis Management Plan
The following are some sample questions to prompt thinking about the
unthinkable:
Does your organization have a crisis management plan that covers more than
natural disasters?
Are evacuation plans provided to new employees when they attend your orga-
nizations new employee orientation?
Does each employee know his or her role in a crisis and where to go if there is
a problem in the facility?
Who in your organization has medical training? What type?
Have you ever practiced an evacuation drill under less-than-ideal conditions?
Who is the point person for communications? Who is the back-up?
Does your organization have a back-up communication system in place?
Does crisis information need to be disseminated in more than one language?
What are the needs of your disabled employees in an emergency?
Could you quickly access a building site map that shows things like utility lines
and shutoff valves?
Is your computer information backed up and stored offsite?
Do crisis management team members have contact information for other
members 24/7?
Where do you store your crisis management plan and contact information?
How often do you update it?
What is your communication plan for contacting all stakeholders? Do employ-
ees know which stakeholders they need to contact?
Do you have a succession plan?
Do you have a recovery plan with lists of what is needed to become operational
after various types of crises?
Aftermath of a Crisis: Critical Incident Stress
Organizations must use emotional intelligence when working with employees
after a crisis (Mitchell & Everly, 2001). Employees thoughts and feelings need to
be addressed; if not, critical incident stress may progress to post-traumatic stress
disorder. Some people over-control emotions at the time of a crisis so as to handle
the immediate tasks at hand, and then continue to over-control later to block out
feelings and images associated with the event.
When employees are given an opportunity to understand the effects of critical
incident stress and the value of acknowledging their emotions, they recover faster,
152 The Encyclopedia of Human Resource Management: Volume One
stay healthier, remain more productive on the job, and experience less disruption
in their home lives. Some people nd it helpful to attend a critical incident stress
debrieng in which they may discuss their experiences and feelings, gain a sense
of perspective, and de-stress.
For those who consider this insufcient or uncomfortable, follow-up counsel-
ing and individual sessions should be made available. Organizations have to keep
employees informed of the resources available in the wake of a crisis and encour-
age the use of these resources to promote health and recovery. Some workers may
express concerns about the privacy of their employers employee assistance pro-
gram, and the issue has to be addressed by management. In a unionized setting,
employees may seek their unions member assistance program instead. Employees
should be provided with information on how to take advantage of these services.
Conclusion
Its no longer a matter of whether a crisis will happen or not, its a matter of what
type it is and when it occurs.
Its an imperative to create a crisis management plan and communication
management plan, then follow up by testing your response procedures and
capabilities through exercises and preparedness drills (U.S. Federal Emergency
Management Agency; U.S. Dept. of Labor). These enable employees to experi-
ence their responsibilities in a crisis, and the organization can change procedures
as necessary. Attaching crisis management to other initiatives within the organi-
zation assures that it is part of the normal operations and is updated regularly.
References
Blythe, B.T. (2002). Blindsided: A managers guide to catastrophic incidents in the workplace. New York:
Penguin Group.
Cohn, R. (2000). The PR crisis bible. New York: St. Martins Press.
Mitchell, J.T., & Everly, G.S., Jr. (2001). Critical incident stress debrieng: An operations manual
for CISD, defusing and other group crisis intervention services. Ellicott City, MD: Chevron
Publishing Corp.
Mitroff, I.I., & Alpaslan, M.C. (2003, April). Preparing for evil. Harvard Business Review,
pp. 109115.
Mitroff, I.I., & Anagnos, G. (2001). Managing crises before they happen. New York: AMACOM.
Mitroff, I.I., & Pearson, C.M. (1993). Crisis management: A diagnostic guide for improving your
organizations crisis preparedness. San Francisco: Jossey-Bass.
U.S. Federal Emergency Management Agency. Emergency management guide for business and
industry. www.fema.gov.
U.S. Department of Labor. Occupational Safety and Health Administration. www.osha.gov/
SLTC/emergencypreparedness.