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Crisis management

What is crisis management?

Crisis management is a way of dealing with problems (crises) as they arise, without being able to undertake any long term strategic planning.


Industrial accidents

Strike Action

Pollution eg oil spills

Product recall for safety reasons

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Contingency planning

What is contigency planning?

Preparing for unwanted or unlikely possibilities.

Example - disaster planning

Other examples might include: severe recession;  bankruptcyof a major customer; a sudden surge in demand.


Contingency plans can be drawn up to cover all functional areas of a business eg HR, Accounting and Finance; Marketing; and operations. This might be helpful to focus in the plan, should the external environment change quickly.

Contingency plans can be used to protect the reputation of the firm / its brand if things change.


Are contingency plans just a waste of time and money? By definition the things they consider are unlikely and may never happen...

Hence there is an opportunity cost associated with contingency planning; working capital and time is used in their creation which could be used elsewhere in the business. 

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