What are some potential effects of a crisis situation? How can a crisis impact an organization? Why should an organization communicate quickly and honestly to its publics in a crisis situation?
1. What are some potential effects of a crisis situation?
If NOT handled effectively (hidden fact, etc.):
a. Negative opinion by the media and public perception
b. Profit loss
c. Value destruction
d. Loss of reputation and credibility
If handled effectively, and the crisis communicated in an open and honest manner to the public:
a. Adds to the organization's credibility
b. Less disruption to business operations
c. Perhaps initial profit decrease, but increases over time.
A good example of this is the Tylenol Crises (bottles tampered and laced with arsenic, causing several deaths) in the 1980s. Because J&J handled the crisis situation effectively through putting customers over profit (pulled Tylenol off the shelves and then changed the bottles to be sealed for safety of the customers) and communicated openly to the public about the problem and how it was going to fix the problem. Although an initial drop ...
This solution examines some of the potential effects of a crisis situation and how a crisis can impact an organization. It further examines why an organization should communicate quickly and honestly to its publics in a crisis situation. Examples are also provided.