Crisis Management Db
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Crisis management is defined differently by different institutes, organizations, and individuals. Generally, the accepted definition is the process by which an organization deals with a major event that threatens to harm the organization, its stakeholders, or the general public. However, Waller, Lei, and Pratten define crisis management as the controlling or mitigation of loss for low probability high impact events that threaten the viability of the organization (Waller, Lei, &Pratten 2014).
Often crisis management is not something that comes to mind when considering the day to day operations of business.However, this is an important part of the business spectrum in that without proper management of unforeseen events or what is deemed a crisis, could result in the loss of lives, finances, and ultimately the downfall of the organization. Generally, when crisis management is considered, it is a reaction to something that has resulted internally or a reaction to something unforeseen that occurs. However, if proper plans and procedures are in place for potential loss, organizations can mitigate potential loss due to a proactive approach. The positive examples in this weeks discussion introduction provides examples of what proper management of an unforeseen events can result in reduced financial loss, lives being saved, and positive organizational images internally and externally.
My personal experience with crisis management came just two years ago. As a senior member of the management team for a small non-profit, I saw first hand an unforeseen event unravel. An investor donated $5000 for an event that was planned. However, due to artist cancellation, venue change, low ticket sales, and other event related circumstances the event was cancelled less than a week before it was scheduled. This was an event that the founders wanted to have, as the financial impact, had it taken place would have yielded almost $80,000 above the initial investment of $20,000. The investor was livid and demanded his funds back immediately. When our legal team enforced the signed contract for the investment, which gave the organization sixty days to repay the debt, the investor began a smear campaign. He committed acts of slander and liable against all members of the leadership team both in the media and on social media. He tied the organization up for nearly two years in litigation, when his investment would have been paid back within sixty days if he had not gone that route. Our team had to manage the crisis by liquidating assets to cover legal fees, initiate public relation programs to combat the negative publicity, and endure the loss of vital organizational team members. This was the greatest disaster of the organization in its eighteen year history. We could not recover and the organization had to disband. As a result of this crisis, I stand firm on my personal definition of crisis management being