Transcript Chapter 6
Business & Society
Ethics, Sustainability, and Stakeholder Management Eighth Edition Archie B. Carroll Ann K. Buchholtz
© 2012 South-Western, a part of Cengage Learning 1
Chapter 6
Issues and Crisis Management
2 © 2012 South-Western, a part of Cengage Learning
Learning Outcomes
1.
Distinguish between the conventional and strategic approaches to issues management.
2.
Identify and briefly explain the stages in the issues management process.
3.
Describe the major components in the issues development process and factors in actual practice.
4.
Define a crisis and identify the four crisis stages.
5.
List and discuss the major stages or steps involved in managing business crises.
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Chapter Outline
• • • • The Relationship Between Issues Management and Crisis Management Issues Management Crisis Management Summary © 2012 South-Western, a part of Cengage Learning 4
• • • •
Issues Management and Crisis Management
The business environment is turbulent and stakeholders are sensitive to emerging issues.
Some firms have not thought seriously about public policy and ethical issues.
Can be impossible to separate the two– the “Siamese twins of public relations.” Well-conducted issues management can help avoid crises.
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Issues Management
A process by which organizations identify issues in the stakeholder environment, analyze and prioritize those issues in terms of their relevance to the organization, plan responses to the issues, and then evaluate and monitor the results.
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Issues Management: Conventional Approach
• • • • •
Conventional Approach
Narrowly focused. Issues fall within the domain of public policy or public affairs management.
Issues have a public policy/public affairs orientation.
Any trend, event, controversy, or public development that might affect the corporation.
Issues originate in social, political, regulatory, or judicial environments.
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Issues Management: Strategic Management Approach
• • • •
Strategic Management Approach
Broadly inclusive. Is typically the responsibility of senior line management or strategic management staff.
Issues identification is more important than it is in the conventional approach.
Issues management is seen as an approach to the anticipation and management of external/internal challenges to the company strategies, plans, and assumptions.
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Strategic Issue Management
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Issues
• •
Issue
A matter that is in dispute between parties. The dispute evokes debate, controversy, or differences of opinion.
The “portfolio approach” of issues management helps firms to prioritize and focus resources on the most important issues.
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Emerging Issues
Characteristics of an emerging issue
Terms of the debate are not clearly defined Issue deals with matters of conflicting values and interest Automatic resolution is not available Issue is often stated in value-laden terms Trade-offs are inherent 11 © 2012 South-Western, a part of Cengage Learning
Issues Management Process
• • •
Basic Assumptions
Issues can be identified earlier, more completely, and more reliably.
Early anticipation: • • Widens the range of options.
Permits study and understanding of the full range of issues.
• Permits organization to develop a positive orientation towards the issues.
Organization will have earlier identification of the stakeholders.
• Organization will be able to supply information to influential publics earlier and more positively, creating better understanding.
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Model of Issues Management Process
Identification of Issues Analysis of Issues Prioritization of Issues Formulation of Issue Responses Implementation of Issue Responses Evaluation, Monitoring, and Control of Results
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Identification of Issues
Scan the environment Identify emerging issues and trends
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Identification of Issues
(continued)
Leading forces as predictors of social
• • • • •
change
Events Authorities/advocates Literature Organizations Political jurisdictions 15 © 2012 South-Western, a part of Cengage Learning
Identification of Issues
(continued) © 2012 South-Western, a part of Cengage Learning 16
Issues Selling and Buying
•
Issues selling
Relates to middle managers exerting upward influence in organizations as they try to attract the attention of top managers.
Issues buying
• Top managers adopt a more open mind-set for the issues that matter to their subordinates.
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Analysis of Issues
• • • • •
Who
(which stakeholder) is affected by the issue?
Who
has an interest in the issue?
Who
is in a position to exert influence?
Who
has expressed opinions on the issue?
Who
ought to care about the issue?
• • •
To help with issue analysis: Who
started the ball rolling? (
Historical view
)
Who
is now involved? (
Contemporary view
)
Who
will get involved? (
Future view
) 18 © 2012 South-Western, a part of Cengage Learning
Ranking or Prioritization of Issues
Two essential questions
1.
How likely is the issue to affect the organization?
2.
How much impact will the issue have?
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Other Issues: Ranking Techniques
Polls / Surveys Expert panels Content analysis Delphi Technique Trend extrapolation Scenario building Use of precursor events or bellwethers
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Formulation and Implementation of Response
•
Formulation
The response design process.
•
Implementation
The action design process.
Plan clarity Resources needed Top management support Organizational structure Technical competence Timing 21 © 2012 South-Western, a part of Cengage Learning
Evaluation, Monitoring, and Control
• • Companies should continually evaluate the results of their responses to issues.
Includes careful monitoring of stakeholder opinions.
Information from this stage helps firms to make adjustments to the process as needed. 22 © 2012 South-Western, a part of Cengage Learning
Issues Development Process
•
Issues Development Process
The growth process or life cycle of an issue.
•
Has five stages:
1.
2.
3.
4.
5.
Early Emerging Current Crisis Dormant © 2012 South-Western, a part of Cengage Learning 23
Issues Development Life Cycle Process
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Issues Management in Practice
• Issues management covers a range of public relations and management activities. • Companies that adopt issues management processes: Develop better overall reputations Develop better issue-specific reputations Perform better financially Provides a bridge to crisis management.
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Crisis Management
To manage a crisis, one first must understand that crises
Occur abruptly Cannot always be anticipated May not occur within a specific issue category Good issues management is a form of pre crisis planning and can help stave off crises.
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Crisis Management
• • •
We are in the era of the mega-crisis
Enron, WorldCom, Arthur Andersen, Tyco, and others accused of financial scandals and malfeasance.
Firestone and Ford were implicated in massive tire recalls due to faulty tires.
Bernie Madoff’s Ponzi scheme defrauded thousands of investors out of billions of dollars.
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The Nature of Crises
• •
Crisis definitions
An extreme event that may threaten your very existence. At the very least, it causes substantial injuries, deaths, and financial costs, as well as serious damage to your reputation.
An organizational crisis is a low-probability, high impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.
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Crisis Management
Rules of crisis management:
1.
2.
Don’t wait Don’t run from the truth 3.
Don’t hide © 2012 South-Western, a part of Cengage Learning 29
Types of Crises
Economic Physical Personnel Criminal Information Reputational Natural disasters
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Outcomes of Major Crises
Escalated in intensity Subjected to media and government scrutiny Interfered with normal business operations Damaged the companies bottom line Resulted in major power shifts 31 © 2012 South-Western, a part of Cengage Learning
Crisis Management: Four Stages
Prodromal Crisis Stage
Warning—precursor Symptom —precrisis
Acute Crisis Stage
Point of no return Crisis has occurred
Learning
Crisis Resolution Stage
Patient is well/ whole again
Chronic Crisis Stage
Lingering on—perhaps indefinitely; period of self doubt; self-analysis
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Managing Business Crises
Five practical steps in managing crises
1.
2.
3.
4.
5.
Identifying
areas of vulnerability
Developing
a plan for dealing with threats
Forming
crisis teams
Simulating
crisis drills
Learning
from experience Effective crisis management requires tailoring a program to a firm’s industry.
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1.
2.
3.
4.
Ten Steps of Crisis Communications
Identify crisis communication team Identify key spokespersons Train your spokespersons Establish communications protocols 5.
6.
7.
8.
Identify and know the audience Anticipate crises Assess the crisis situation Identify key messages to communicate 9.
Decide on communication methods 10.
Be prepared to ride out the storm © 2012 South-Western, a part of Cengage Learning 34
Be First, Be Right, Be Credible
•
Be First
Get the message out first to control content and accuracy.
•
Be Right
Say and do the right thing.
•
Be Credible
Be open, honest, and speak with one consistent voice.
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Successful Crisis Management
• • Being prepared for a crisis helps companies get their acts together and respond more quickly, with less damage.
Beung prepared for one type of crisis provides valuable learning for when other types of crises strike.
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• • • • • • • • •
Key Terms
Acute crisis stage Chronic crisis stage Conventional approach to issues management Crisis Crisis communications Crisis management Crisis resolution stage Crisis teams Emerging issue • • • • • • • Issue Issue selling and buying Issues development process Issues management Portfolio approach Prodromal crisis stage Strategic approach to issues management © 2012 South-Western, a part of Cengage Learning 37