How do we know when an event is a crisis? What clues should we look for from the international and domestic contexts (“environment” in the Deibel model?) to make this determination?
The times of crisis are always hard moments for an organization. An event can be termed as a crisis when it negatively affects the business’s bottom line or reputation. During the early stages, most events do not seem to be adverse. Virtually, it is not immediately apparent when a business is in the initial stages of a crisis (Capozzi & Rucci 2013). In this regard, managers or practitioners need to examine critically how potential events can result in a crisis.
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In a business setting, a crisis can occur in various ways. Usually, there are some events that no one can control. These include product destruction by natural disasters or external forces (Deibel, 2007). These activities can be identified as a crisis when they alter or completely hinder the smooth functioning of the business system. Precisely, events resulting from outside forces can be seen prior to their occurrence (Ishikawa & Tsujimoto 2009).
For example, it is evident that a phenomenon, such as inflation, can directly lead to a crisis in a country or a company. The indicators include an increase in product prices, increased taxation, and unstable market forces.
Some internal events, such as decisions made by managers, can fuel a potential crisis without knowing that they are making a catastrophe. Deibel model advocates for developing strategies that help in the protection of organization or individual entities, especially when faced with threats. A good example of such a decision made by managers includes making company policies so that in the long-run, they result in a crisis (Capozzi & Rucci 2013).
Specifically, this can include the decision to retrench some workers. Of note, more experienced and skilled employees can be retrenched. This is a crisis because the company will lack the expertise to enhance the operations of the business. When the company starts to make fewer profits, then it is an indication that the event is leading to a crisis.
What is the nexus between strategy and crisis management? How do you keep reactions to crises from undermining your national security strategy?
Strategy and crisis management are two closely related concepts. There are three elements common to a crisis; the element of surprise, a threat to the business, and a short decision time (Coppola 2011). Primarily, business entities have the responsibility to create strategies aimed at mitigating or managing a crisis. Strategies are developed according to the magnitude of the crisis. Crisis management provides a coherent and structured approach to assess, identify, and manage any risk in an organization (Alvintzi & Eder 2010).
The strategy is made to assess the crisis. Through the assessment of the crisis, one can understand where uncertain outcomes exist. In essence, strategy comes prior to crisis management (Ishikawa & Tsujimoto, 2009). As such, strategy is a crucial technique to boost crisis management. Thus, it is possible to identify steps that can be followed to protect the business, assets, and people concerned.
Strategy and crisis management relate since managers strategize prior to managing a certain crisis (Booth 1993). Strategy to deal with a given crisis can be developed and implemented even by groups or the smallest projects to build a complex plan to boost in managing the crisis. In order to keep reactions from undermining one’s national security, it is significant for one to make effective plans to deal with the crisis before they overcome the situation, thus one can easily avoid various reactions from crisis from undermining their national security. (Gilpin & Murphy, 2008).
In addition, crisis assessment is a vital approach to ensure that the crisis does not affect or alter with an individual’s national security. In this regard, creating an effective strategy enables a person to be ready to face any crisis that comes across their way, thus protecting their national security. Therefore, the relationship between strategy and crisis management is evident in the way the two concepts function.
Alvintzi, P., & Eder, H 2010, Crisis management, Nova Science Publishers, New York.
Booth, S. A 1993, Crisis management strategy: Competition and change in modern enterprises, Routledge, London.
Capozzi, L., & Rucci, S. R 2013, Crisis management in the age of social media, Business Expert Press, New York.
Coppola, D. P 2011, Introduction to international disaster management: Includes index, Butterworth-Heinemann, Boston.
Deibel, T. L 2007, Foreign affairs strategy: Logic for American statecraft, Cambridge University Press, New York.
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Gilpin, D. R., & Murphy, P. J 2008, Crisis management in a complex world, Oxford University Press, New York.
Ishikawa, A., & Tsujimoto, A 2009, Risk and crisis management: 101 cases, World Scientific, Singapore.