Journal Reading Reports

Journal Reading Reports

Organizational Communication, BADM6123

Masters of Business Administration

May 3, 2005

Crisis communication is one of the most important and neglected components of organizational communication in today's business world. It is vital that every corporation have contingency plans for emergency situations, both natural and man-made. Studies show that eighty percent of organizations confronted with a major disaster runs out of business within two years.(Hickman & Crandall 1997) Nevertheless, we also know that almost forty percent of all Fortune 1000 companies have an operational crisis management plan in place. (Hickman & Crandall 1997) This paper will examine and evaluate three journals that discuss different aspects and needs for an active crisis plan.

The first journal evaluated comes from an article in Business Horizons named "A Multi-faceted Approach to Crisis Management" that discusses the need for developing many parallel plans before disaster strikes. First and foremost, the article says that a crisis management team must be created for the mere anticipation of possible crisis events in order that recovery and rebuild of the organization may be conducted in an efficient manner. The team should be named and move into action. The first order of business for the new team should be developing worst case scenarios. In order for this next step to happen, the team must establish what business functions are mission critical and necessary for the survival of the organization. They must also understand and plan for the proper technology needed to back up these functions to be in place. After all of this is completed, the team needs to develop and distribute to all those involved a crisis management plan. It falls on management to ensure all parties stay current and trained on the contingency plan. Upon a recent survey of IBM it was discovered that nearly half of the underlying plans failed when tested for the first time, this is why training and drilling are so important. (Hickman & Crandall 1997)

Within this crisis management plan are many department and personnel specific plans that need individual attention. A few examples of these that are present in most organizations are Information Systems, Human Resources, Public Information and Communications, and Operations Management. Information Systems is charged with creating backup files and establishing a "hot site" for the company to conduct business in the interim of disaster rebuild. Human Resources focuses on establishing the care for families, community reconstruction efforts, and a system for extensive counseling depending on the type of disaster. Public Information and Communications touches upon many vital areas of the business. Not only must they handle the public relations aspects of crisis, but they must lay a foundation for emergency communications needed for every aspect of reconstruction, whether of a companies image or site. Finally Operations Management is the critical component of carrying out the tactical side of a crisis management plan. They must have and execute plans for recovery of assets, restoration and use of emergency power, food and other emergency supplies; the securing of gas valves and other dangerous apparatus; and getting in contact with all the key players and information in case of a crisis. (Hickman & Crandall 1997)

The next journal examined is an article named "Communicating with Stakeholders in a Crisis" located in Financial Executive. This particular article focuses on the importance of -involving all stakeholders for the survival of the business. The author explains that during good times the company is primarily responsible to its shareholders alone. However, during bad times the company must shift focus to its stakeholders. Some examples of stakeholders are, "banks, bondholders, trade vendors, employees, customers, and sometimes even government agencies." (Epstein 2003 p.23) In order to do this a company must be organized enough to adhere to a strict game plan. First the organization must develop a clear and all-encompassing plan to fix the problems of the current crisis, a, "blueprint for survival" if you will. The company needs to open communication channels to include all stakeholders honestly and consistently. Many companies have failed during times of crisis because the isolationist stance taken confirmed only worst suspicions. In order to combat that, the organization must communicate with the express pupose of building credibility and trust with a consistent storyline. This type of situation requires that employees and customers are both involved. Employees are the first line of defense with the consumer base and must believe that the company can succeed. That does not mean every detail, but they must understand the situation, action plan being put in place, and that the company has a bright future beyond trouble times. (Epstein 2003)

In addition to these conventional avenues of crisis management, it is also wise to share financial data with the companies more senior lenders and forget focusing on the loan contract literally. If a company only releases what is require in writing, this will only confirm and magnify the creditor's worries. It is much easier to foreclose than trust that the company has a good and viable plan of recovery. Ensure that all creditors are treated equally and told the same things as one creditor's knowledge will normally be shared by all. If there are discrepancies, all credibility previously earned will be lost. In fact the most vital creditors top the company should be brought in to help and observe the companies recovery. Vendor relationships are also quite important. Most importantly, the company must let all stakeholders know that they will be a stronger employer, customer, and client after this crisis passes and that they are part of the solution. (Epstein 2003)

The third and final article highlighted here "A Strategic Response to Media Metamorphoses" is found in Public Relations Quarterly and discusses the effect that changing media has had on all communications. The three changes spotlighted in this article are the internet, vertical media, and the paradigm shift in the media's attention from objectivity to advocacy. The public's use of the internet has increased exponentially. In 2002 alone, there was a 30% increase. This unique aspect of communication enables both the media industry and special