The Business World A Crisis

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Crisis Leadership In the business world a crisis is an event that has a low chance of occurring but would have a high impact on the organization. This event could be characterized by your general cause, effect and resolution; which is why many organizations have begun to incorporate strategic plans on how to deal with possible events. Failures in this area have led to many business losses, bankruptcies, and even closures in many businesses. Therefore, how these companies handle a crisis is of the upmost importance. (Lussier, Achua 2013) The leader in a crisis is terribly important; just because an individual is an effective leader on a day to day basis does not mean that they would be effective while planning for or during a crisis.…show more content…
(Pearson 2002) A crisis can be categorized into two distinct fields. The first contains events that could possibly have been avoided had the company taken action to protect itself and/or the public. For example the BP oil spill in the gulf, executive misconduct, succession, etc. The second are the events that are beyond the organizations control. These include natural disasters, terror attacks, and product tampering. (Nayor 2009) The business crisis examined here would be included under the second example. In 1993, the Pepsi Corporation confronted a crisis that began with a case of hypodermic syringes being found in one of its product lines, Diet Pepsi. After this initial report the complaints of more syringes began to come in. Within a few days claims of findings such as pins, syringes, cocaine vials and even a bullet had spread from the West coast to the East. Because this was following the Sudafed tampering case that had killed two in 1992 and the fear or threat of aids the story exploded. Pepsi encouraged stores to not get rid of the products; insisting that this action was inconceivable to have happened at their plants. However, the company did work with the FDA who insisted that while the investigation was ongoing that consumers should empty the contents of cans into a glass before drinking. The Pepsi Corporation used the media attention in their favor to encourage the public about the safety of their products by allowing the
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