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Crisis Management

In: Business and Management

Submitted By mgamil
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Contingency planning
Organizations prepare contingency plans in recognition of the fact that things do go wrong from time to time contingency planning involves:
Preparing for predictable and quantifiable crises
Preparing for unexpected and unwelcome events
The aim is to minimize the impact of a foreseeable event and to plan for how the organization will resume normal operations after the crisis
Contingency plans
The contingency plan:
Identifies alternative courses of action that can be taken if circumstances change with time
Details standby procedures to enable the continuation of essential activities and services during the period of the emergency
Includes programs for improving the business in the longer term once the immediate situation has been resolved
Steps in drawing up a contingency plan
Recognize the need for contingency planning
Identify possible contingencies - all the possible adverse and crisis scenarios
Specify the likely consequences
Assess of the degree of risk to each eventuality
Determine risk strategy to prevent a crisis & to deal with a crisis should one occur
Draft the plan and identify responsibilities
Simulate crises and the operate of each plan
Dealing with the “what if” question scenario analysis:
This involves constructing multiple but equally plausible views of the future
The scenario consists of a “story” from which managers can plan
Sensitivity analysis
Involves testing the effect of a plan on alternative values of key variables
e.g. the effect of a 50% loss of capacity

Crisis management
Crisis management involves:
Identifying a crisis
Planning a response
Responding to a sudden event that poses a significant threat to the firm
Limiting the damage
Selecting an individual and team to deal with the crisis
Resolving a crisis
Stages of a crisis
Pre-crisis
Prior to the event
Warning...

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