Crisis management is a science and an art. Most companies that survive a crisis come out stronger, and are usually better equipped to deal with similar situations in the future. It is necessary to put in place early warning mechanisms that will signal trouble, much before trouble turns to a crisis.
Both employees and customers are affected by the crisis. The latter might not want to do business with you again. Top executives feel the pressure in social situations and the media can play havoc in its coverage of the entire episode. Failure to manage a crisis affects a company's image.
The author, V S Rama Rao, says customers or the general public could be affected by things like faulty goods. This can bring about increased scrutiny by the government and the added burden of regulations.
In times of a crisis,
1) The top management must swing into action immediately.
2) All the facts about the situation should be gathered. Facts garnered from various parties may throw light on the matter.
3) The decision taken by the management should be clear and distinct. Executive decisions have to be convincing if they are to be clear.
4) The most important aspect of crisis management is proper communicate of decisions. This should be done immediately in order to prevent false rumors from spreading in the market.
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