Exam 10 November 2018, questions and answers PDF

Preview

Summary

Issues and crisis exam questions and answers with detail of what they required ...

Description

PART A - answer 4 out of 5 questions 1- 2 pages each question 1. Explain the differences between issues management and crisis management Crisis management is is the process by which a crisis is managed, once it has erupted in the organisation’s operating environment whereas issues management is an organisational process of boundary spanning to assess what potential issues might arise and assess what their impact on the organisation could be in order to reduce the likelihood of harm either through damage to reputation, financial or other loss. Tony Jacques has identified eight key differentiators between crisis and issues management: 1. Choice ●

Crisis: Fewer options and the choices continue to decrease as the crisis continues

●

Issue: More time to explore all possible choices, weigh pros and cons and make an informed decision

2. Certainty ●

Crisis: Need to make decisions without knowing all the facts

●

Issue: Time to thoroughly research, gather and analyze information

3. Urgency ●

Crisis: Under pressure to make a decision on the spot

●

Issue: Time to fully assess and make the best decision

4. Cost ●

Crisis: Cost is no object when trying to save your business

●

Issue: Can evaluate options and choose the most cost-effective plan of action

5. Continuity ●

Crisis: Daily activity is consumed by the crisis, which could disrupt business

●

Issue: Managed during regular office hours and it is business as usual

6. Time ●

Crisis: All crises eventually come to an end, but financial and reputational impacts could linger

●

Issue: Issues can extend for months, year or decades

7. Impact ●

Crisis: Possible threats to health, property, environment, etc.

●

Issue: Possible threats to market share, financials and reputation

8. Outcome ●

Crisis: Minimize damage to the business and help it survive

●

Issue: Work toward positive outcome by identifying and addressing issues early

2. Give an example where a crisis was managed well and give an example where a crisis was managed poorly. What are the detriments which make the difference. The two case studies that illustrate how to handle and how not to handle a crisis is Domino’s and United Airlines. In 2009, Domino’s Pizza found themselves launched into a viral attack when two

employees in their Conover N.C. franchise uploaded a video of themselves doing unethical things to a sandwich before it went out on delivery. Domino’s were immediately notified through a third party website, as they did not have an online presence at that point, they identified the employees and dismissed them promptly. The employees were also facing felony charges. Even though Dominos took longer (48 hours) to communicate to the public and failing to have a plan in place, they created a Twitter account in order to have open communication with the public, which benefited them in the long run. Domino’s had open communication with its publics, they were honest about their mistakes as well as took responsibility for the incident, and provided new and improved training to its employees. They also took immediate action through dismissing the employees and creating an online presence to answer any consumer doubts or enquiries. An example of how a crisis was poorly managed was United Airlines. Outrage exploded on social media after a video emerged of a passenger being violently removed from united airlines flight 3411 bound for Louisville, Kentucky on April 9, 2017. Four Chicago Department of Aviation security officers rip the passenger out of his seat, bloodying him in the process. The passenger had refused to give up his seat for United employees when the flight was overbooked. United Airlines released a statement on social media justifying the incident and apologising for the overbooked situation, however, took no blame in the incident itself and rather passed blame onto airport authorities. The statement released by the CEO was also criticized for his soft-pedaling of the event. It was only after public scrutiny that the CEO of United Airlines changed his tone and apologised for the incident and recognised that it was not the way to treat consumers

and better practices will take place in the future. As mentioned previously, the detriments that make a well managed crisis involve being apologetic, taking responsibility, open communication, responding to the public in a timely manner and taking steps into rebuilding the organisational protocols in order to rebuild trust and loyalty through its consumers which is what Domino’s did.

3. Discuss the critical criteria for the success of a designated spokesperson The critical criteria for the success of a designated spokesperson can be classified into five section: -

Concern

-

Control

-

Clarity

-

Confidence

-

Competence

The way a spokesperson speaks and how they engage with key - sometimes hostileaudiences is never more important than in a crisis. A range of skills can be taught, but

some requirements rely more on personal qualities. A designated spokesperson must have: 1. The capacity to communicate empathy as well as authority 2. The ability to make commitments on behalf of the organisation 3. A good understanding of the crisis and organisational response 4. Enough technical knowledge to avoid embarrassing mistakes 5. The ability to stay calm under pressure 6. Previous experience with news media and other stakeholders 7. The capacity to operate in a highly fluid and unstructured situation 8. The ability to avoid jargon and corporate speak 9. A willingness to listen as well as talk Then, and only then, should you ask: has the person been media trained? Having qualified and well-trained alternative spokespersons helps reduce the risk of over exposing the CEO and also allows the CEO to focus on providing leadership to manage the crisis. Furthermore, it allows the CEO to be held ‘in reserve’ to step in if things start to go wrong. Message consistency is the number one aspect in a crisis. No matter what new facts emerge about the crisis, the overall message does not keep changing from hour to hour.

4. How can issues and crisis management be proactively and strategically managed Planning for issues and crisis management extends beyond a process to develop and implement a successful plan to deal with a particular issue or cluster of issues. It also includes planning for how to introduce the actual process and structure of issue management into an organisation, and how to evaluate the effectiveness of the discipline itself. What is commonly referred to as crisis preparedness actually comprises two distinct elements which are now becoming more accurately described as pre-crisis management:- system preparedness, including systems planning, manuals, documentation, warrooms,

functional

checklists,

resources

and

simulation

training;

and

- proactive crisis prevention, including audits, risk assessment, social forecasting, environmental scanning, issue management and emergency response. Bridges and Nelson highlighted ten functions of effective issues management:

1. Integrating public policy issues analysis and audits into strategic planning 2. Monitoring standards of organisational performance to discover key public's’ perceptions of the organisations 3. Developing

and

implementing

ethical

codes

of

organisational

social

accountability 4. Assisting senior management make decisions on goals and policies in reaction to public opinion 5. Identifying , defining, prioritising and analysing issues of greatest operational, financial and political significance 6. Creating multidimensional proactive and reactive response plans from among issue-change strategy options 7. Establishing relationships with like-minded individuals and groups, including the media 8. Communicating on the most important issues for the organisation and publics to establish an agenda and build external support 9. Influencing public opinion in order to stall or thwart undesirable legislation or regulation 10. Evaluating

issues

management

objectives

to

measure

improvement and make recommendations to management.

success,

direct

https://www.bernsteincrisismanagement.com/newsletter/crisis-manager-100603.html PART B - ADVICE TO NESTLE (palm oil case) -

FOUR STAGES OF CRISES 1. Prodromal stage Necessary steps must be taken in this stage of the crisis in order to prevent similar damage being done to the company. In crisis prevention, the first step is early warning and scanning, which includes processes such as audits, preventive maintenance, issue and environmental scanning, social forecasting, anticipatory management and future studies. Nestle must take action on early warnings through its claim to unsustainable farming practices in relation to its cocoa supply. In doing this, issues and risk management link directly to other management tools and processes. 2. Acute stage Having a dedicated crisis management plan and team allows an entity to tackle a crisis or disaster in a calm way once it has erupted, thereby minimizing loss of life, property or reputation. Each person on the disaster management team must carry out the duties assigned to her. This team must swing into action the moment there is a threat of an actual crisis. For instance, in order to reconcile biodiversity conservation and sustainable development, a policy mix that combines both regulatory and non-regulatory approaches is needed.

This includes the design and adoption of strategic land use planning to make agricultural subsidies conditional to social and environmental standards, strengthening local institutions, and designing incentives to foster the implementation of best agricultural practices.

3. Chronic stage The process of recovery from any crisis can take a long time. When the crisis is over, the focus has to shift on rebuilding, which can be time-consuming and expensive. So Nestle must make adequate financial arrangements beforehand, should there be a threat of any such crisis occurring. All damages and losses should be accounted for in detail, with photographs and/or video proof maintained along with them. Having an effective crisis management plan helps the organization or the entity get back to normal without losing too much time or money. Once the crisis has passed, it is very important to review the effectiveness of the crisis management plan to correct any shortcomings. 4. Crisis resolution stage The fourth stage addresses the risk of lasting financial or reputational damage that is sometimes the main concern after the crisis incident itself has been resolved. The first step is recovery and the resumption of operations - sometimes known as ‘business continuity’. Nestle must focus operational resumption, financial costs, market retention, business momentum and share price protection. This step is to secure protection for the organisation against infrastructure problems. Nestle must keep in mind that the risks to an organisation post-crisis can be even greater than during the crisis itself. Lawyers and pr professionals have to be ready to work together to face months or even years of effort to address these

long-term issues.

-

CATEGORIES OF CRISIS 1. Operational crises 2. Environmental 3. Management or employee misconduct 4. Technological 5. Product 6. Labour relations 7. Social concerns 8. Natural disasters Although there are many categories of crises, Nestle is subject to face a large portion of them. These include operational, environmental, management, labour relations, product crisis and social concern. There may also be a chance of natural disaster threatening the operational activities of cocoa supply for Nestle as it can potentially be destroyed in a natural disaster.

-

STRATEGIES AND TACTICS USED BY NGOS AND ACTIVISTS TO GET TARGET CORPORATIONS TO CHANGE THEIR BEHAVIOUR Strategies -

Redefining the issue 1. Moving target approach Using this approach activists are not required to prove their claims. They only need to raise plausible allegations to force the target to commit resources in response, and raise doubts in the public’s mind.

2. Transitional target Move from facts to opinion and emotions 3. Multiple target Attacks on many issue fronts simultaneously, making it much harder for the organisation to respond in a meaningful way and opening up the inevitable accusation that they ‘deliberately ignored’ one or other aspect. -

Confrontation Thinking that more can be done and achieved by sitting with organisations

Tactics

-

-

Shocking advertisements

-

Protesting opponents

-

Celebrity activists

-

Nakedness

-

Throwing substances

-

Unreasonable public demands

-

Dysphemism

-

Threatening senseless legal action

-

Ambush marketing

-

Culture jamming

-

Lobbying

WHY MIGHT IT BE CHALLENGING TO DEAL WITH ‘ACTIVISTS GROUPS’, AS A STAKEHOLDER GROUP? Studies around the world consistently show that business is at a substantial disadvantage when it comes to trust and reputation. By contrast, activist organisations such as NGOs have a strong and increasing reputation in terms of trust and believability.

As a result, some challenges may arise for organisations facing public pressure from activists, Greenpeace to Nestle, in this instance. Given such challenges, there is no ‘best way’ for organisations like Nestle to respond to activist pressure. There is said to be three stages of response models for stakeholder groups when dealing with NGOs and activists. The first stage being denial; do nothing, second being anger; fighting back, and the third being bargaining; dialogue and negotiation. There are challenges in each stage for stakeholders. In the first stage, denying or thinking the issue will eventually go away by itself is...