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.