Crisis Management (DP IB Business Management)
Revision Note
Written by: Lisa Eades
Reviewed by: Steve Vorster
Crisis Management Versus Contingency Planning
Contingency planning is the process that occurs when a business tries to predict risky or unwanted events, and then develops a process for how the business will respond to the occurrence of any such event
Crisis management refers to the immediate handling of a disruptive and unexpected event
It includes communication, coordination, resource mobilisation and decision-making under pressure
Short-term significant disruption is likely and long-term business survival affected
Radical solutions such as autocratic leadership and centralised decision-making could ensure business continuity
Work activity may need rapid reorganisation
For example, many businesses swiftly implemented remote working for staff during the Covid-19 pandemic
Diagram: examples of crisis situations
If a business were to lose all of its customers data, this would be classed as a crisis and require an immediate response from management
Examiner Tips and Tricks
Crisis management and contingency planning cannot eliminate the risk of business disruption - and even the best plans can go wrong when a crisis hits
The fact that businesses engage in this kind of planning does provide significant benefits
Business resilience can be improved
Negative impacts may be reduced
Stakeholders are likely to have greater confidence in the business
Factors that Influence Effective Crisis Management
The effectiveness of crisis management depends on a range of factors
Factors Affecting Crisis Management
Speed | Transparency |
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Control | Communication |
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Examiner Tips and Tricks
Crises do not have to be large-scale
The unexpected loss of a CEO, a warehouse fire or an outbreak of infection within a business can cause a significant crisis that requires a prompt, transparent and well-communicated response
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