The Lack of Integration Between Strategic Planning and Crisis Management
An era of crises
Business crises occur every day, from serious accidents to the infamous coffee spill at McDonalds. In the introductory chapter of his book “The crisis manager: Facing risk and responsibility”, Otto Lerbinger writes about the present as an era of crises, reflecting the increasing size and complexity of modern technology and industrial organizations. In the 1980s, indications of the rising frequency of corporate crises were found by the dramatically increase in product-injury lawsuits since the 1970s. Later on, in the 2000s, crises were occurring more frequently, and a general agreement among corporate customers, media and communications professionals, risk and insurance management practitioners, academics and government officials supported the contention that crisis frequency was increasing in an increasingly volatile world.
Without doubt, the globalized economy has intensified the competition and shortened the product life cycle, with the increased risk of failure. There is also the increased focus on corporate social responsibility as a competitive advantage, vouching for companies to address social issues and act responsible with respect to the environment, labour standards, and human rights.
Another aspect of crisis management has also emerged over the last years; the constant media coverage through Internet news sites and social media. Companies are constantly confronted and battered with new information resulting in a crisis to evolve from hour to hour, necessitating that the crisis must be managed through rapid response.
Living in an era of crises makes the likelihood of managers facing a crisis at some time ever more present. Thus, any company that relies on public opinion and reputation should therefore, at least in some sense, be prepared if a crisis occurs. Being prepared implies the development of a management regime that assesses potential threats and handles any crises that may emerge. Thus, crisis management deals with not only the reactive behaviour after the outburst of a crisis, but also the proactive precautions made to prevent the crisis from emerging. Prevention, where possible, is always better than response after things have gone wrong.
Nevertheless, although crises could challenge the reputation and survival of a company, there seem to be reluctance to adopt crisis management plans. Moreover, being proactive in order to prevent a crisis is usually skipped altogether, even though it is the least costly and easiest way of control. One of the characteristics of crises today is lack of recognition and understanding of numerous warning signs. They are often detected but not collectively identified and analysed at appropriate management level.
Planning in order to prevent crises requires a strategic approach and mind set. Managers, when developing corporate strategies, should be aware of potential events that may lead to crises. In their book, “Crisis management in the new strategy landscape”, Crandall et al argue that there is a reciprocal relationship between the various strategies organizations follow and their relation to crisis planning. At the same time as crisis management should be part of the strategic management process, the strategies that a firm chooses to implement can be a factor with respect to the frequency and types of crises that are faced.
Other experts in the field have also identified the common long-term property of the two management fields and how they deal with emergent situations and are concerned with organisational survival in the future. The strategic plan of an organisation or a nation is incomplete unless it includes the integration of crisis management.
Crisis management steps can be related to different processes of strategic management such as strategy formulation, implementation and evaluation. The extent to which organisations can shift from being crisis-prone to being crisis-prepared may well relate to the extent to which they are able to integrate crisis management and strategic management processes. Further, strategic assessment does not fully address problems that could be encountered in the long-term in executing and maintaining the chosen strategy, caused by changes in the business environment. Consequently, common aspect of strategic and crisis management when analysing the organization’s environment, indicate that some strategies are more crisis prone than others.
Still, there are indications of this relationship not being utilized and taken into account when developing and implementing strategies. Strategic management and crisis management evolve separately, despite their potential for synergistic integration. Strategic management pays inadequate attention to defensive actions that could act to prevent unwanted, undesirable and unexpected crises from happening. And the academic world still takes an uncritical view of strategic management. It is taught using a variety of techniques that rely on a stable internal and external environment.
Although the situation has improved over the last years, traditional crisis management is still viewed as a separate planning process and not intertwined with strategy. And despite the growing interest in the strategic importance of crises, our understanding of the area is quite limited. One key issue is that the precise relationship between a firm’s strategic environment and its crisis management decisions remains to be completely specified. Moreover, the few articles discussing crisis and strategic integration focus mostly on coordination of activities within two separate management fields.
To conclude, the indicative lack of focus on the crisis aspect in strategic management could be a problem in future crisis handling, and should be addressed more thoroughly by business managers.
Change is never an easy thing, even when you are aware that it is absolutely necessary to improve your situations for business growth. Now while the familiar is always a comfortable proposition for anyone, sticking with the things that we have always done is most often the fastest killer of advancement.
It is a well-accepted fact that existing and repeat customers are of more value to any B2B business than the fresh and new ones, although in a recent report from BRP (Boston Retail Partners) e-commerce retailers still pay attention to acquiring the later ones.
As businesses are reopening slowly and finding some resemblance of “normalcy” creeping back into their customer’s lives, now organizations are faced with a golden opportunity to find and define success in a post-COVID-19 world.
It is not the most difficult time for trade and commerce, even though there is huge chaos about it. A good brand will always have customers following and buying from them. Now, how does a brand become good and others average or even below that?
What is/are the real need(s) of your customer? What do they really want? This age-old question which has beguiled many has nevertheless taken an added urgency in today’s tech-driven digital economy.
AI or Artificial Intelligence is infringing on the human-made sales process at an accelerating and exciting rate, or for some in a frightening manner, depending on your side of the coin.
Working as a freelancer is a great option for many people, particularly those in the creative industries. From writers to artists to graphic designers and more – being a freelancer is a great avenue to allow you artistic freedom and to let yourself take on the projects that you are passionate about
Chat solutions are very fast becoming one of the main channels when it comes to customer service. In fact, in a research done by Eptica, it was found that while only 7% of businesses used chat services in 2013, whereby nowadays 44% of brands use chat solutions and advertise it on their websites.
The distinct pieces of information or data is a salient feature behind the advancement of technology. The management of data and strategically utilizing it for the development of technologies has augmented business growth. This processing of raw data with specific methods and tools is known as analytics.