Crisis Management

Note taking for the Objectives and Strategy Topic

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  • Created on: 19-06-08 15:27
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Emma Rudd BMA
Objectives and Strategy ­ Crisis Management
Corporate Plan
A corporate plan sets out what the business as a whole is trying to achieve and how it
intends to achieve this. It will include the corporate objectives and the strategy to be
pursued. These overall targets and plans must then be turned into specific objectives and
strategies for each of the functions. The value of planning is that it makes sure that
managers are looking ahead and think about what they want to achieve and how to achieve
it rather than just drifting along. Producing the plan is also a useful exercise because it
forces managers to consider the organisations strengths and weaknesses in relation to its
environment and to think about how all the different elements of the firm interrelate.
However corporate planning can have drawbacks. There is a danger that a plan which sets
out what a firm is going to do for, say the next 5 years is soon out of date. If managers
keep pursuing the original plan when all around them has changed there is a danger that
they will actually be doing the wrong thing. It may be necessary therefore to ensure the
firm has a flexible approach to planning and keep revisiting the original plan to ensure it
remains viable and relevant.
Contingency Planning
Contingency planning occurs when a firm prepares for unlikely events. Contingency plans
might include
Using two suppliers for the same part or component in case there are problems with
one of them
Paying a fee to be able to use computer facilities or office space elsewhere in case
of an emergency
Training employees in several tasks so they can take over from others if there are
major absences, illnesses or strikes.
Ensuring new products are in development so that if there is a problem with existing
products they can be replaced.
However, managers must decide exactly which events are worth preparing for and how
many resources to put in contingency planning. The plan provides a sense of direction and
each element of the business can see how it is contributing. It helps managers set their
priorities and allocate resources. To decide which events to plan for a firm may consider;
How likely id a particular event to happen?
What is the potential damage if it does occur?
The greater the likelihood of an event and the greater to potential damage the more likely
a firm is to plan for it.
The need for contingency planning highlights the dynamic nature of business and the need
to be prepared for the unexpected. Obviously a firm cannot prepare for every emergency
but it is worth highlighting the biggest risks and preparing for these. Firms must
continually examine their own operations and their environment to check they are
prepared for possible changes in the future; in this way managers will be proactive ­
anticipating and preparing for change ­ rather than reactive ­ having to react to crises as
they develop.
The Impact of a Crisis
When a disaster does occur as a fault in the product or a fire at the factory this can
cause panic. Hopefully the firm will have a contingency plan which it can put into action but
even so this is likely o be a stressful time. It is easy to rush into a decision at times like
these because of the pressure to do something and be seen to be doing something ­ this

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Emma Rudd BMA
can lead to rushed and inappropriate decision making; on the other hand if you delay it too
long the crisis might get worse. As well as sorting out the crisis itself the firm may have to
handle the press as well. When managing a crisis it is important
To identify the facts as soon as possible.…read more

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Emma Rudd BMA
To ease the process of change managers should
Make sure people understand the logic and need for change
Think about the timing ­ the process of change can sometimes seem to go on for too
long and you lose peoples enthusiasm: at the same time sudden change can appear
frightening to people so managers need to ensure people feel comfortable with the
pace of change.…read more


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