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…decisions will be more rational and better received, and the crisis will be of shorter duration, for companies who prepare a proactive crisis plan…
- R. Maynard (1993)1

Most organisations do recognise the possibility of crisis happening but they differ in terms of how prepared when they face crises. One reason so many organisations are hard hit by unexpected crises is that they fail to pay timely attention to detect symptoms or signals before the onset of crises. Some organisations may go to great lengths to devise strategic plans for financial growth and success but they fail to recognise that strategic planning without inclusion of crisis management is like sustaining life without guaranteeing life.

This technical note examines how to identify, study and forecast crisis issues. It sets forth specific ways that could enable an organisation to plan proactively for controlling and resolving crisis events. Drawing on the experience of Sanyo Industry Co. Ltd., this technical note illustrates the importance of recognising crises in a timely fashion before they become chronic events.

Stages of a Crisis

Fink (1986) identifies four different and distinct stages of a crisis. The phases are prodromal crisis stage, acute crisis stage, chronic crisis stage and chronic resolution stage.2 In the field of medicine, a prodrome is a symptom of the onset of a disease. It may be hard to detect especially for organisations that are careless and do not pay attention to recognise the possibility of a disaster occurring.

It is always much simpler to pick up the signal, or to check the symptoms of crises, than to face the consequences. Nevertheless, the lack of attention and evasiveness often cause organisations to deal with crises only when acute symptoms emerge. At the acute crisis stage, organisations are required to take immediate action to control the damages in order to sustain their normal operations. However, the losses are already incurred and may have resulted in more complications.

During the chronic crisis stage, the symptoms are obvious and always present. Chronic problems may force an organisation’s management to do something once and for all to resolve them. The drawback of fixing the problems at this stage is that an organisation may get used to “quick fixes” and “band-aid” procedures.3 At the chronic stage, organisations have the last opportunity to resolve crises. While appropriate handling of crises may lead to total recovery, the lack of experience or inappropriate handling of crises may result in unresolved problems that can continue to plague the organisation, create more complications or even destroy the organisation.
1 Maynard, R., (1993), “Handling a crisis effectively”, Nation’s Business, Vol. 81 No. 12 December, pp.54-5.
2 Fink, S., (1986), Crisis Management: Planning for the Inevitable, American Management Association, New York, NY.
3 Kash, T., Darling, J., (1998), “Crisis management, prevention, diagnosis and intervention”, Leadership and Organisation Development Journal, Bradford, Vol. 19, Issue 4; p. 179.
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