Presented by :
Nupur Bhardwaj
Crisis
Crisis is any event that is expected
to lead to, an unstable and
dangerous situation affecting an
individual, group, community or
whole society.
It is a situation that is unpredictable,
but it is not unexpected.
Common features of Crisis
The situation materialises unexpectedly.
Decisions are required urgently.
Time is short.
Urgent demands for information are received.
There is sense of loss of control.
Pressures build over time.
Routine business become increasingly difficult.
Reputation suffers.
Types of Crisis
Financial Crisis
Technological Crisis
Crisis of Malevolence
Natural Crisis
Crisis of Deception
Workplace Violence
Financial Crisis
These are the crisis that occur in an organization due to its
prevailing financial conditions.
Losses, increase in costs, non-availability of funds,
bankruptcy, unable to pay back loans, etc.
Examples of Financial Crisis
Kingfisher Airlines, Deutsche Bank faced a
recently faced a financial financial crisis in USA, in
crisis. 2009.
Technological Crisis
Technological crisis are caused by human application of
science and technology. This occurs when technology
becomes complex and the system breaks down.
Software failures, Industrial accidents etc.
Examples of Technological Crisis
Exxon Valdez, oil spill in Union Carbide India Ltd,
Alaska, on March 24,1989. gas leak in Bhopal, on
December 2, 1984.
Crisis of Malevolence
When opponents or miscreant individuals use extreme
tactics for the purpose of expressing anger or seeking gain
from, a company or economic system, perhaps with the
aim of destroying it.
Product tampering, kidnapping, malicious rumors,
terrorism etc.
Example of Malevolence Crisis
The Tylenol (Extra-Strength capsules) murder case in
Chicago, on 29 September, 1982.
Natural Crisis
Natural crisis, are natural disasters considered as 'acts of
God,' are such environmental phenomena.
Earthquakes, volcanic eruptions, tornadoes and hurricanes,
floods, landslides, tsunamis, storms, and droughts etc.
Examples of Natural Crisis
The Power Project of The Indian Ocean
Jaiprakash Associates, at earthquake (Tsunami) , in
Nathpa, in Himachal Pradesh 2004.
was devastated by floods.
Crisis of Deception
Crisis of deception occur when management conceals or
misrepresents information about itself and its products in
its dealing with consumers and others.
Example of Crisis of Deception
Dow Corning’s silicone- The Satyam scam,
gel controversy in which came into
Michigan, USA. light, in 2009
Workplace Violence and Rumors
Crisis occur when an employee(s) or former employee(s)
commits an act of violence against other employees on
organizational grounds.
Rumors are, when false information about an organization
or its products creates crises hurting it’s reputation.
Example of Workplace Violence and Rumors
A workplace violence had Procter & Gamble’s
occurred between the
Logo controversy in 1985.
laborers and higher
authority, in Vardhman
Group of Companies.
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.
Crisis Management Plan
Gather facts.
Be prepared.
Communicate quickly and accurately
conduct brainstorming.
Develop policies to minimize crisis.
Assemble and organize resources.
Create a Crisis Management Team.
Example of Unsuccessful Crisis Management
Union Carbide India Ltd, gas leak tragedy in
Bhopal, on December 2, 1984.
It occurred on the night of December 2–3, 1984 at the
Union Carbide India Ltd, pesticide plant in Bhopal,
Madhya Pradesh.
A leak of methyl isocyanate gas and other chemicals from
the plant resulted in the exposure of hundreds of
thousands of people.
Estimates vary on the death toll. The official immediate
death toll was 2,259 and the government of Madhya
Pradesh.
Example of Successful Crisis Management
The Pepsi Corporation faced a crisis in 1993,
which was successfully managed by the company.
In 1993, claims of syringes being found in cans of diet
Pepsi were made.
Company urged stores not to remove the product from
shelves while it had the cans and the situation
investigated.
Pepsi released videos and made public, showing the
production process to demonstrate that such tampering
was impossible within their factories.
Crisis was managed through effective communication.