...Definition of Crisis Management Crisis is inevitable and the planning and execution to bring under control such an event that has been developed through complicated processes that causes damages and potentially affects an entire organization is called Crisis Management (Vassilikopoulou, Lepetsos, Siomkos, & Chatzipanagiotou, 2009, pp. 65-66). Crisis Management in Relation to Business Vassilikopoulou et al. (2009) stated, “Crisis are events that are difficult for a company to avoid” (p.66). Vassilikopoulou et al. further stated “the types of crisis are numerous from ‘small-scale organizational issues’ to a grave crisis." Several studies prove that when a company neglects a crisis it will eventually hurt the brand and the image. The following two citations will prove this “The immediate expense of product replacement and consumer compensation may pale in comparison with the loss of consumer trust and damage to brand evaluations” (Lei, Dawar, & Gürhan-Canli, 2012, p. 336). “A poorly managed marketing crisis can quickly destroy the affected brand’s equity, which might have been nurtured over many years” (Zhao. Y., Zhao, Y., & Helsen , K., 2011). Managing Crisis Management should minimize negative consequences (Vassilikopoulou et al., p.69). Vassilikopoulou et al. described “companies involved in a crisis are more likely to be held responsible for the defective product if they have a poor reputation” (as cited in Siomkos, 1999). Thus, a good reputation could also play a protective...
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...Crisis Management Word Count: 2635 Renault Clio Recall – March 2007 The 1990’s saw the birth of a new supermini car which Renault believed could change the motoring industry and the way we travelled, Renault where right. The Clio to date is one of Europe’s best selling cars in history and is the only car to be voted ‘European Car of the Year’ twice. Renault where growing from strength to strength, it seemed like nothing could get in their way of taking reign of the motoring industry. Its global force and power was incredible, being one of the top car makers in Western Europe. Renault was moving into Asia and North America, with their advertising expenditure reaching over six hundred million, making Renault ranked 34# in the worlds advertising chart. Renaults adverts had links with: The Simpsons, Thierry Henry and The Muppets, these just a number of clients that have worked with Renault. Thousands of Renault Clio’s where recalled for safety checks after a number accidents had occurred all relating to the same problem, the bonnet. More than often cars travelling down the motorway, travelling around 70 mph would be in for a shock as their car bonnet would blow open shattering the windscreen. After the first case Renault said they would recall the model, Clio II, but said that they found no construction or design faults with the bonnet catch mechanism. This was just the begging of Renaults troubles. Renault was under a great deal...
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...CRISIS-MANAGEMENT PRACTICES OF MANAGERS OF SMALL- SCALE FOOD SERVICE ESTABLISHMENTS IN LEGAZPI CITY A Research Proposal Presented to the Faculty of Divine Word College of Legazpi Graduate School, Legazpi City In Partial Fulfillment of the Requirements of the Course, Research Methods GEM BARRAMEDA MBA Student March, 2013 Chapter I The Problem and Its Setting Introduction 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 1980s. 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 that "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 (Success Hints and Tips: Don Miller & Associates, Healthcare Food Service Directors Adjust Their Management Style in Order To Win, 2005). In contrast to risk management, which involves assessing potential threats and finding the best ways...
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...Communication and Crisis Paper Communication and Crisis Paper Lillian Williams University Of Phoenix Abstract Crisis management is a very critical organization function. If failed it can result in extreme harm to stakeholders, extreme loss for the organization, and/or end the very existence of the organization. Having public relations practitioners are an important part of crisis management teams. A lot books have been written about crisis management by both the practitioners and the researchers from many different disciplines making it a challenge to take in what all we know about crisis management and public relations’. Communication and Crisis Paper Effective crisis management handles any of the threats sequentially. The most important concern in a crisis must to the safety of the public. Failure to address the safety of the public increases the damage from a crisis. Reputation and financial concerns will be considered after the safety of the public has been remedied. Ultimately, crisis management was designed to protect an organization and its stakeholders from any threats or to reduce the impact felt by the threats. Prevention of a crisis involves seeking to reduce the known risks that would lead to the crisis. This would be part of an organization’s risk management program. Preparation of a crisis involves: creating a crisis management plan, selecting and training for the crisis with management team, and doing exercises to test the crisis management plan...
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...discuss the drivers of Toyota’s accelerator crisis. Why was Toyota facing a recall crisis? Toyota was facing the accelerator recall crisis because the company and its management became more focused on growth and less concerned with the TPS principles the company had adhered to for much of its existence. Lean operations with a focus on the bottom line and a very lackadaisical support system in North American oversight as well as deficient TPS training proved to be a cultural disadvantage to a highly centralized Toyota management team (Gretto, Schotter & Teagarden, 2010). How well are Toyota’s management, employees and external stakeholders able to support their corporate brand? There was a clear breakdown between Toyota’s management, employees and external stakeholders. Because Toyota’s management was centralized in Japan and the U.S. operations worked in isolation from an information sharing standpoint, it was impossible for all interested parties to effectively collaborate and quickly solve the accelerator issue. There was a difficulty in training and process collaboration, especially in regards to TPS, which the American subsidiaries lacked any expertise or field knowledge in (Gretto, Schotter & Teagarden, 2010). Has Toyota effectively managed ethics and public relations in the United States? Who should be accountable for this activity? How could Toyota’s crisis management be improved? Toyota was deficient in managing ethics as well as handling public relations...
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...What is the definition of a crisis? According to dictionary.com a crisis would be a sequence of events at which the trend of all future events, especially for better or for worse, is determined; turning point (crisis, n.d.). A crisis can hit a company anytime and it does not discriminate because of size or notoriety. The best thing a company should have is a plan of action prepared in an advance, a crisis management plan. The Triad Group apparently did not have a crisis management plan in place as the problems started to sneak up, the company felt pressured and fell apart. According to Rick Amme, who heads the crisis and media relations firm Amme & Associates, Inc., there are five stages of scandal. The Triad Group went through all five stages until the United States Marshals, arrived at the door to seize the products and shut them down (Amme, 2004). Could have The Triad Group avoided such a big scandal? Maybe not as the problems had started awhile back but what if the company had followed protocols. The first stage was no comment. Throughout the recalls and seizing of the products the Triad executives and spokesperson would decline to comment on the situation. Although the FDA (Food and Drug Administration) commented that the seizing of the products was to prevent the company from distributing any more products, Triad did not come forward. The best thing that the company could have done was to communicate throughout the crisis. Johnson and Johnson is such company after it...
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...Canadian Business Environment Market and Nonmarket Environments Any issues or changes that happen in one of these environments can directly cause change to the other. Since both of these are so closely related and to a great importance for a firm to run successfully, they have put more focus on managing both aspects of the company. The interrelationship between the market and nonmarket environment is heavily based on the role of management. Since a firm will operate in both the market and nonmarket environments, managers are there to measure the impact one has on the other. The issues found in the nonmarket environment are directly related to the market environment of the firm. The nonmarket environment is a little more difficult to control than the market environment, but each firm is aware of the importance of running sufficiently in both aspects in order to be successful. As shown in figure 1-1 (Baron p. 3), the relationship that the nonmarket and market environment has. Market environment determines the significance of nonmarket issues to the firm. Nonmarket environment shapes business opportunities in the market place. Analysis of the Nonmarket Environment When analyzing the nonmarket environment of an organization the main focus is the four I’s that characterize the organization. The four I’s consists of Issues, Interests, Institutions and Information. The issues aspect is the main part of the nonmarket analysis, issues of a firm can be very vast, and they...
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...* * How and why is it important for businesses to engage with the media during a crisis? What strategies are successful in external communications for business during such times? Compare & contrast two news stories which centre on a crisis for different businesses giving detailed analysis of each communications strategy. This Essay will begin by reviewing crisis definitions and message strategies. Next it will explore translation strategies used by organisations involved in a crisis to communicate with stakeholders. The essay will then consider Ford–Firestone’s tire failure crisis of 2000 as an example of poor crisis management, and contrast toy maker Mattel’s recall crisis of 2007 as an example of successful crisis management. It will first lie out the rhetorical context of each case before embarking on a detailed analysis equating the effectiveness of both firms’ external communications, and in the case of Ford-Firestone, how these might have been alternatively approached in order to avoid detrimental reputational damage. * Fink (1986, from King, 2000) defines an organisational crisis as ‘a situation that can potentially escalate in intensity, fall under close government or media scrutiny, jeopardize the current public image of the organisation or interfere with normal business operations.’ Pearson and Mitroff support this in their ‘five dimensions of a crisis’, explaining that the situation will be ‘highly visible, require immediate attention, have a surprise...
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...IMD "No comment". Those two simple words can shatter a company's reputation and cost it millions in lost sales. So how can you turn a corporate crisis into competitive advantage? n October 2001, news of potentially harmful bacteria found in a McChicken Burger in Buenos Aires, Argentina, spread across South America via television and the internet. Although no one was proved to have been made sick or placed at risk, the incident cost McDonald's several million dollars in lost sales and damaged brand eguity {Turpin, 2002). Effective or ineffective communication during the first hours - or even minutes - of an emergency can have dramatic implications for the image of a company (Dawar and Pillutla, 2000). A study of 2,645 consumers conducted by the advertising agency DDB Needham showed that a company's handling of a crisis ranked as the third most important influence on consumer purchasing, after product quality and handling of complaints {Marketing News, 1995). issue 25. summer 2006 51 When disaster strikes: communicating in a crisis Crisis-management experts are unanimous in concluding that it is not a matter of if a company wiil be faced with a crisis, but when and how weii-prepared executives wili be to weather the storm {Albrecht, 1996). Indeed, no company is immune to a potential crisis created by flawed products, blackmail by unscrupulous consumers, dishonest acts by employees or managers, the sudden death of a senior executive, terrorist acts or natural disasters...
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...Academic Research Protecting Organization Reputations During a Crisis: The Development and Application of Situational Crisis Communication Theory W. Timothy Coombs Department of Communication Studies, Eastern Illinois University, Charleston, IL, USA ABSTRACT Crisis managers benefit from understanding how crisis communication can be used to protect reputational assets during a crisis. Situational Crisis Communication Theory (SCCT) offers a framework for understanding this dynamic. SCCT provides a mechanism for anticipating how stakeholders will react to a crisis in terms of the reputational threat posed by the crisis. Moreover, SCCT projects how people will react to the crisis response strategies used to manage the crisis. From its empirical research emerges a set of evidence-based crisis communication guidelines. The development of SCCT is discussed along with the presentation of its guidelines for crisis communication. Corporate Reputation Review (2007) 10, 163–176. doi:10.1057/palgrave.crr.1550049 KEYWORDS: crisis communication; crisis man- agement; reputation INTRODUCTION Crises are taken as a threat to the organizational reputation. Crises damage the reputation and such changes can affect how stakeholders interact with the organization (Barton, 2001; Dowling, 2002). Postcrisis communication can be used to repair the reputation and/or prevent reputational damage (Coombs and Holladay, 2005). The field of crisis communication is dominated by case studies. The end result...
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...over the world improve product quality and manufacturers make large advantage of materials, increase speed of production and reduce time to enter into market. It began to be listed on London Stock Exchange on 2008 and now is one of the members in FTSE 250(Wiki, 2011). The following report will explain and evaluate the company’s activities and financial performance, and finally discuss how the company has applied international accounting standards according to the published annual report and accounts 2010. Spectris’ activities in recent years Acquisitions and R&D are main methodologies that the company uses to expand the business. The customers of Spectris mainly come from North America, Europe and Asia. The company spends large amount of the revenue in R&D in order to build a close rapport with the customers. Acquisition is an efficient approach for Spectris, not only to increase its asset, but also help it to establish a new market and product strategy aiming at local customers in a short time, and that is one of the significant reasons why the profit of company keep increasing in recent years, and it is also one of the important part of successful model that the company creates to make its operation effectively. The above graphs from the annual report suggest that revenue and profit of the company tend to increase from 2006 to 2010, even though the company suffered a sharp decrease in 2009, perhaps because of the large-extended financial crisis. The dividend still...
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...price of Apple stocks? If we ask a regular person this question, one may answer that it doesn’t have that much influence at all. Mainly because people have never heard of the company ShinEtsu, which is responsible for manufacturing thin silicon wafers for Apples products (Der Spiegel, 2011). What many people do not know is that when this Japanese manufacturer has been overwhelmed by a natural disaster risk of stock-out may appear and may harm other partners within the supply chain. One of the major customers is Foxconn in Taiwan which manufacturers Apple’s iPhone and iPad. Still we rely that Apple controls their supply chain well in order to produce sufficient iPhones for the market. Taiwan’s Foxconn is able to produce the iPhones and iPad due to the efficient and ‘justin-time’ delivery from the Japanese manufacturer. Natural disasters like the tsunami in Japan may disrupt the continuity in the supply chain with all the associated consequences. Risk management and mitigation strategies are suitable solutions, which may prevent a supply chain breakdown because one will get insight in high-risk situations, such as the situation in Japan and hence consider how to reduce the associated consequences (Chopra & Sodhi, Managing Risk to Avoid Supply Chain Breakdown, 2004). The current globalization of supply chains may have increased the efficiency but, however, comes at a price, which may increase other risks. So both parties profit from globalization, but what about the risks? Should...
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...Running head: Analysis and Evaluation of Crisis Management Student’s name Institution Course Professor Date Introduction Public relations shortened as PR is all about the practice of management especially concerning spread of information between an organization or an individual and the public in general (Jim, 2010). In most cases, public relations consist of an individual or an organization achieving exposure to their spectators using topics that are of public interest and also news items that in many cases do not require direct payment (Macnamara, 2012). The main objective of public relations by an organization habitually is to convince the public, employees, partners,investors and other company stake holders to uphold a given point of view about the organization, its products, and leadership or of political decisions (L’Etang & Jacquie,2008). The main common activities consist of winning industry awards, speaking at conferences, proper employee communication and working with the press. Qantas is an Australian airline company established in 1920’s and it is the eleventh world largest airline and the 2nd oldest airline company in the world (Marianna, 2012). It is a company that was founded in the Queensland outback as the Queensland and the northern territory aerial services. This airline company was previous a government owned company; it did not view efficiency or profits as its major objective (Lynam, 2011)...
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...Internal and external factors affecting Starbucks Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world with over 16,000 stores in 50 countries. This report evaluates major internal and external factors affecting Starbucks using various analytical techniques. Based on the Starbucks brand in UK, it identifies suitable marketing strategies for Starbucks to expand its business in the UK market within the next two years. In line with the chosen marketing strategies, recommendations for the marketing mix are discussed. Founded in 1985, Starbucks is one of the largest coffeehouse companies in the world, with over 16,000 stores in 50 countries (Starbucks Annual Report, 2009, p. 1). Starbucks sells high-quality whole coffee beans along with fresh, rich-brewed coffees, cold blended beverages, a variety of complimentary foods, coffee related accessories and a selection of premium teas primarily through Company-operated retail stores (Starbucks Annual Report, 2009, p. 1). In May 1998, Starbucks successfully entered the European market through its acquisition of 65 Seattle Coffee Company stores in the UK (Starbucks, 2009). In 1998, since opening its first UK store in London, Starbucks has been growing rapidly at a steady rate with over 660 stores opened by the end of 2009 (Starbucks Annual Report, 2009, p. 3). This report aims to evaluate major internal and external factors affecting Starbucks using different environmental analysis methods such as SWOT analysis...
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...explanation of risk management……………………………............................3 1.2 how risk management affects different business functions………………………3 1.3 evaluation of methods of assessing risk in business……………………………...4 2.1 evaluation of approaches to managing risk in business…………………………4 Assignment 2 Risk assessment………………………………………………………5 3.1 All the main drivers of business risk…………………………..6 3.2 Impact of the different types of risk…………………………….7 3.3 of severity and likelihood of risk…………………………...8 3.4Suggested risk management strategies…………………………………9 4.1 Approaches to crisis management…………………………………………10 . 4.2 Impact of breaks in business continuity…………………………………………10 Conclusion…………………………………………………………………………11 References………………………………………………………………………….12 Risk Management Introduction: Risk management is an important concept mainly aims at identification, assessment, and prioritization of events that may have an adverse impact on the organization. It can be considered as a very powerful strategic tool and has become more prevalent in recent decades due to rapid growth in industrial sector. 1.1 An explanation of risk management Risk management may be the process of identifying, quantifying, and managing the risks makes fish an organization faces. As the final results of business activities are doubtful, they are said to involve some element of risk. These challenges include strategic failures, operational disappointments, financial failures,...
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