Crisis Management- a Strategic Leadership Approach

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Crisis management - a strategic leadership approach

Introduction

The past decade has been wrought with crises on both a domestic and international scale. It has been marked by a glut of organizational crises including natural disasters, technology disruption, and acts of terrorism, scandals, and financial mismanagement.
Yet, many leaders are ill-prepared for the important role they may need to play in leading an organization through a crisis. At the beginning of the decade people all over the world scrambled to tackle the potential technological disruption of the Y2K bug which was one of the utmost crises. Then in 2001 the US was thrown off balance by the terrorist attack on September 11, which led to a world wide upshot. A few
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Smoldering-like crisis situations typically result from the simple day to day work performed in an organization and often take the form of management mistakes that have built up over a period of time.

Phases of crisis Management:

Phase 1: Signal Detection
While these are less evident in many crisis that occur suddenly and without warning (e.g., natural disaster), most other types of crisis have a number of early warning signs that lead an enlightened manager to know something is wrong. A slowly building increase in customer complaints or defect rates, for example, can be a sign of trouble in product quality.

Phase 2: Preparation/Prevention
The preparation and prevention phase is one in which managers engage in activities to plan for or avert a crisis. These activities may include developing crisis policies and procedures, identifying a crisis response team, performing crisis drills, and more. As the preparation and prevention stage of crisis management should not imply that the goal for managers is to prevent all crises, but rather engage in realistic planning in order to better position the organization to prevent some crises and to manage those that are unavoidable.

Phase 3: Containment/Damage
The goal of the containment/damage control phase is to limit the reputation, financial, and other threats to firm survival in light of the crisis. This is achieved through activities that limit the encroachment of
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