Transcript Issues Management -and Crisis Management.ppt

Issues Management
and Crisis Management
Chapter
6
Prepared by Deborah Baker
Texas Christian University
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
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Chapter 6 Learning Outcomes
1. Distinguish between the conventional and strategic
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approaches to issues management.
Identify and briefly explain the stages in the issues
management process.
Describe the major components in the issues
development process and factors in actual practice.
Define a crisis and identify the four crisis stages.
List and discuss the major stages or steps involved in
managing business crises.
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Chapter 6 Outline
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Issues Management
Crisis Management
Summary
Key Terms
Discussion Questions
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Introduction to Chapter 6
This chapter focuses on issue and crisis
management, and the planning processes
required to improve stakeholder management
and to respond to stakeholder expectations.
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Issues Management
Conventional Approach
Narrow Focus
Strategic Management
Approach
Broad Focus
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Issues Management
Conventional Approach
 Issues fall within the domain of public policy or public
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affairs management.
Issues typically have a public policy / public affairs
orientation or flavor.
An issue is any trend, event, controversy, or public
development that might affect the corporation.
Issues originate in social / political / regulatory /
judicial environments.
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Issues Management
Strategic Management Approach
 Issues management is typically the responsibility of
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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
Figure 6-2
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Issues Definition
Issue
A matter that is in dispute between
parties. The dispute evokes debate,
controversy, or differences of opinion.
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Issues Definition
Characteristics of an Emerging Issue
 Terms of the debate are not clearly defined
 Issue deals with matters of conflicting values
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and interest
Automatic resolution is not available
Issue is often stated in value-laden terms
Trade-offs are inherent
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Issues Management Process
Basic Assumptions
 Issues can be identified earlier, more completely, and
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more reliably
Early anticipation widens the range of options
Early anticipation permits study and understanding of the
full range of issues
Early anticipation 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
Figure 6-3
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Identification of Issues
Scan the environment
Identify emerging issues and trends
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Identification of Issues
Leading Forces as Predictors of Social Change
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Leading events
Leading authorities / advocates
Leading literature
Leading organizations
Leading political jurisdictions
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Identification of Issues
Figure 6-4
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Issues Selling and Buying
Issues
Selling
Issues
Buying
Relates to middle managers exerting
upward influence in organizations as
they try to attract the attention of top
managers.
Top managers adopt a more open
mind-set for the issues that matter to
their subordinates.
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Analysis of Issues
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Who (which stakeholders) 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?
Who started the ball rolling? (Historical view)
Who is now involved? (Contemporary view)
Who will get involved? (Future view)
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Ranking of Issues
 Priority A
 Priority B
 Priority C
Medium
Low
PPG Approach
Impact on Company
 High priority
 Nice to know
 Questionable
High
Probability-Impact Matrix
Xerox Approach
Low
Medium
High
Probability of Occurrence
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Filtering and Ranking of Issues
Figure 6-5
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Ranking of Issues
Five Filter Criteria
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Strategy
Relevance
Actionability
Criticality
Urgency
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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 Responses
Formulation
Implementation
The response design process
The action design process
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Plan clarity
Resources needed
Top management support
Organizational structure
Technical competence
Timing
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Issues Development Process
Issues
Development
Process
The growth process or life cycle
of an issue
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Issue Development Life Cycle Process
Figure 6-6
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Issues Management in Practice
 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 or forecast
May not occur within an issue category
@
http://www.crisisexperts.com
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Crisis Management
Basic Causes of a Business Crisis
1. Acts of God
2. Mechanical problems
3. Human errors
4. Management decisions / indecisions
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The Nature of Crises
Crisis Definitions
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A major, unpredictable event that has potentially negative
results and its aftermath may significantly damage an
organization and its employees, products, services,
financial condition, and reputation.
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
How a Crisis Should NOT be Handled
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Minimizing the issue
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Stonewalling
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Too little, too late
From Figure 6-7
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Types of Crises
Economic
Physical
Personnel
Criminal
Information
Reputational
Natural disasters
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Types of Crises
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
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Crisis Management: Four Stages
Prodromal Crisis Stage
Acute Crisis Stage
Warning—precursor
Symptom —precrisis
Point of no return
Crisis has occurred
Learning
Crisis Resolution Stage
Patient is well/
whole again
Figure 6-8
Chronic Crisis Stage
Lingering on—perhaps
indefinitely; period of selfdoubt; self-analysis
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Pattern of a Poorly-Managed Crisis
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Early indications that trouble is brewing occur.
Warnings are ignored / played down.
Warnings build to a climax.
Pressure mounts.
Executives are often overwhelmed or can’t cope.
Quick-fix alternatives look appealing. Hasty moves create
trouble.
Clamming-up versus opening-up options present themselves.
Most firms choose the former.
A siege mentality prevails.
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Managing Business Crises
Fink’s Three-Stage Model
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Identifying the crisis
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Isolating the crisis
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Managing the crisis
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Managing Business Crises
BusinessWeek’s Five Steps in Managing Crises
1. Identify areas of vulnerability
2. Develop a plan for dealing with threats
3. Form crisis teams
4. Simulate crisis drills
5. Learn from experience
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Managing Business Crises
Monsanto’s 10R’s for Handling Public Policy Crises
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Respond early
Recruit a credible spokesperson
Reply truthfully
Respect the opposition’s concerns
Revisit the issue with follow-up
Retreat early if it’s a loser
Redouble efforts early if it’s a critical company issue
Reply with visible top management
Refuse to press for what is not good public policy
Repeat the prior statement regularly
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Managing Business Crises
Augustine’s Six Stages of Crisis Management
1. Avoiding the crisis
2. Preparing to manage the crisis
3. Recognizing the crisis
4. Containing the crisis
5. Resolving the crisis
6. Profiting from the crisis
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Crisis Communications
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Identify crisis communication team
Identify key spokespersons
Train your spokespersons
Establish communications protocols
Identify and know the audience
Anticipate crises
Assess the crisis situation
Identify key messages to communicate
Decide on communication methods
Be prepared to ride out the storm
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Components of Crisis Plans
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Media communications
99%
Employee communications
98%
Crisis management team
94%
Communications with elected officials
86%
CEO / senior executive involvement
82%
Documentation / written policy / handbook 81%
Website communications
77%
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Be First, Be Right, Be Credible
Be First
Get 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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Benefits of Crisis Management
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Fewer disruptions to every life for consumers,
employees, and citizens
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Preparing for one type of crisis may be beneficial
when other types of crises strike
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Key Terms
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Issues management
Crisis management
Portfolio approach
Issue
Emerging issue
Issues selling
Issues buying
Probability-impact matrix
Issues development
process
 Crisis
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Prodromal crisis stage
Acute crisis stage
Chronic crisis stage
Crisis resolution stage
Crisis teams
Crisis communications
Ten steps of crisis
communication
 Being first
 Being right
 Being credible
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