SUMMATIVE ASSESSMENT ON REACTIVE CRISIS MANAGEMENT MODEL

1- INTRODUCTION:

Crisis management is a situation-based management system that includes clear

roles and responsibilities and process related organizational requirements company-
wide. The response shall include action in the following areas: Crisis prevention, crisis
assessment, crisis handling and crisis termination. The aim of crisis management is to
be well prepared for crisis, ensure a rapid and adequate response to the crisis,
maintaining clear lines of reporting and communication in the event of crisis and
agreeing rules for crisis termination.

The techniques of crisis management include a number of consequent steps from the
understanding of the influence of the crisis on the corporation to preventing, alleviating,
and overcoming the different types of crisis. [citation needed]
 Crisis management consists of
different aspects including:

 Methods used to respond to both the reality and perception of crisis.

 Establishing metrics to define what scenarios constitute a crisis and should
consequently trigger the necessary response mechanisms.
 Communication that occurs within the response phase of emergency-management
scenarios.

Crisis-management methods of a business or an organization are called a crisis-

management plan. A British Standard BS11200:2014 provides a useful foundation for
understanding terminology and frameworks relating to crisis, in this document the focus
is on the corporate exposure to risks in particular to the black swan events that result in
significant strategic threats to organizations. Currently there is work on-going to develop
an International standard.
Crisis management is occasionally referred to as incident management, although
several industry specialists such as Peter Power argue that the term "crisis
management" is more accurate. [6]

A crises mindset requires the ability to think of the worst-case scenario while

simultaneously suggesting numerous solutions. Trial and error is an accepted discipline,
as the first line of defense might not work. It is necessary to maintain a list of
contingency plans and to be always on alert. Organizations and individuals should
always be prepared with a rapid response plan to emergencies which would require
analysis, drills and exercises.[7]

The credibility and reputation of organizations is heavily influenced by the perception of

their responses during crisis situations. The organization and communication involved in
responding to a crisis in a timely fashion makes for a challenge in businesses. There
must be open and consistent communication throughout the hierarchy to contribute to a
successful crisis-communication process.

The related terms emergency management and business continuity management focus

respectively on the prompt but short lived "first aid" type of response (e.g. putting the
fire out) and the longer-term recovery and restoration phases (e.g. moving operations to
another site). Crisis is also a facet of risk management, although it is probably untrue to
say that crisis management represents a failure of risk management, since it will never
be possible to totally mitigate the chances of catastrophes' occurring.

2. LESSON OBJECTIVES

a. Understand Reactive Crisis Management Model base on its definition

b. Understand the different theories on Crisis Management

c. Understand about Structural Function System theory

3. DISSCUSSION:

A Crisis Management Model is the conceptual framework for all aspects of

preparing for, preventing, coping with and recovering from a crisis. By viewing events
through a model, crisis managers gain context and can better apply best practices.

A crisis is unpredictable or low- probability event that can cause significant

negative effects to a business. Often, the causes, consequences and solutions to a
crisis are unclear, yet stakeholders must act quickly.

Many models have been developed as part of a larger effort to build overall
organizational capacity and skill to anticipate, avoid, and mitigate crisis. Therefore, most
models emphasize the importance of taking initiative, rather than being reactive.

The spectrum of skillfulness in crisis management can be broadly described as a

crisis management maturity model that ranges from reactive to proactive –or even
preventive action.

4. DIFFERENT THEORIES ON CRISIS MANAGEMENT

Theory of Apology

Researchers recognize the powerful role that apologies play in crisis management. This
has been formalized as an area of study under the term corporate apologia, which
means using rhetoric to protect your reputation while explaining what happened. 

In apologia, the crisis response options are denial of responsibility, shifting of

responsibility, or taking full responsibility with an apology.

In Keith Michael Hearit’s 2011 book Crisis Management by Apology, in which he

developed the theory of apology, he states that companies often avoid apologies in
favor of making no public comment because of concerns that apologizing increases
their liability or weakens their position in lawsuits. However, Hear it contended that a
public relations-driven strategy, in which the organization apologizes and seeks to be
candid, is more effective.  
Later research by Coombs and Sherry Holladay contradicted this statement, finding that
apologizing isn’t necessarily more effective in reducing reputation damage and negative
word-of-mouth among stakeholders who are not themselves victims. In these studies,
apologizing was about as effective as other victim-centered strategies, such as
expressions of sympathy and compensation.

Image Restoration or Repair Theory

Image repair theory, also known as image restoration theory, shares a focus on
rebuilding an organization’s reputation when it has been damaged by a crisis.
Communications scholar William Benoit originated image restoration theory in his 1995
book Accounts, Excuses, and Apologies: A Theory of Image Restoration Strategies,
which focuses on the messages a company should communicate during a crisis. He
offers five categories of image repair strategies: denial, evasion of responsibility,
reducing perceived offensiveness of the action (such as with compensation), corrective
action, and mortification (confessing and begging forgiveness).

Structural Functional Theory in Crisis Management

Structural functionalism comes from sociology, and looks at society as a structure made

up of  institutions that function together to keep the whole running, like organs that work
together to keep the body functioning.

In crisis management, this theory explains how organizational communication relies on

a structure made up of networks for information to flow and a hierarchy of people who
manage the process.

Chaos Theory and the Butterfly Effect in Crisis Management

Chaos theory comes from mathematics, and holds that some systems are so complex
that small differences in starting conditions can make them act very differently and
unpredictably. 
This characteristic inspired the concept of the butterfly effect, in which a butterfly
flapping its wings in Brazil can theoretically cause a tornado in Texas. This potential (for
small changes to have unpredicted effects) can make these systems appear completely
random, even when they may not be.

Researchers have applied both chaos theory and the butterfly effect in crisis
management. For example, they studied officials who made precise and rosy
predictions about disasters without taking unpredictable weather variables into account.
This occurred in Canadian floods in 1997, wherein inaccurate communication meant
that many communities were not prepared for the scale of a disaster that occurred.

In the corporate world, chaos theory can show the limitations of controlling volatile
public perception of a crisis.

Stakeholder Theory of Crisis Management

In 2009, Alpaslan, Mitroff, and Sandy Green published a theory that focused on the role
of stakeholders in crisis management. They argued for including stakeholders in crisis
preparations and responses — not because of their power or influence on financial
value, but due to factors such as potential for injury.  

Crises can reorder the importance of a stakeholder group, and managers who
understand stakeholder theory consider and incorporate the needs and values of a
range of stakeholders, Alpaslan, Mitroff, and Green said.

Resilience Theory and Business Continuity Planning

Resilience theory, which has its roots in child psychology, holds that having one or more
protective factors can help individuals survive adversity with less harm. In business,
resilience theory helped give rise to business continuity planning, which seeks to make
companies more resistant to failure. 
A business continuity plan is similar to a crisis management plan in that it anticipates
emergencies and disruptions that could occur and defines actions to regain normalcy in
the company. Read “Business Continuity Planning: How to Do It Well,” to learn more
about that process. 

According to researcher Patrice Buzzanell, resilience theory outlines five elements that
businesses can cultivate to strengthen their ability to bounce back: crafting normality,
affirming identity anchors, making use of communication networks, putting alternative
logic to work, and emphasizing positive feelings while downplaying negative ones. 

Integrated risk management is another resilience-boosting business practice. In

integrated risk management, company culture is attuned to risk, and organizations seek
to evaluate the risks in all their activities jointly, rather than in isolation. Technology-
enabled practices support this integration, and the result is better risk-reduction
decisions for the whole enterprise.

Contingency Theory

Contingency theory asserts there is no single best method to organize or lead a

company, and that decisions should be made contingent on circumstances.
Researchers say this applies equally in crisis management, because crises are fluid,
complex, and uncertain. Crisis managers must adapt their response to make it
contingent upon the situation. 

Crisis leaders and communicators should take into account a range of external factors,
such as threats, the marketplace environment, social and political support, the
characteristics of public stakeholders, and the complexity of the issue.

Internal factors include characteristics of the organization and other threats.

Diffusion of Innovation Theory

The diffusion of innovation theory describes how new ideas spread and become

accepted. According to Evertt Rogers, who pioneered the theory in his 1962
book Diffusions of Innovations, a small minority of people initially adopt innovations.
When about 20 percent of the population adopts a new behavior, 70 percent of the
remaining people will adopt it, too.

This idea has influenced crisis management by shaping efforts to change behavior and
attitudes in emergencies. Specifically, the diffusion of innovation theory can identify
behaviors that might be most easily changed, the people who might adopt new
practices (and influence others), and the most effective ways to spread new ideas. 

An example application of this theory is the effort by public health agencies to get
people to wear masks during a pandemic.

Theory of Human Capital

The theory of human capital comes from economics, and frames individual

characteristics such as education, health, and birthplace as factors that contribute to a
person’s productivity and income.  

In crisis management, inequalities of human capital — such as disadvantages in

education and healthcare and unfair income distribution among classes and races —
can lead to or exacerbate crises. For example, when reflected in lower wages or job
status, these inequalities make companies vulnerable to discrimination lawsuits,
damaged morale, and reputation harm.

Conclusion
Crisis occur unexpectedly many companies or organization that cause harm or
worst case scenario losses the organization but if companies has good crisis
management model that deal with problems create an effective and appropriate plans,
communicate to top down to employees, hence crisis affects both company and
employees. Therefore, it is vitally important that companies have well informed
employees who can participate in the crisis management plan. Finally, every company
should have a detailed crisis management process to ensure effective and
continuous performance.