BizEd

SeptOct2010

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During the pre-crisis part of the course, I also cover issues management, which involves identifying emerging issues that potentially could damage the company—and reducing the likelihood that they will turn into crises. One resource I use is a case study about Kraft Foods and the issue of obe- sity, which is obviously a concern to food conglomerates. However, I emphasize that the lessons of this case study can be applied in other industries as well, and during executive seminars I have the participants reflect on how those lessons might affect their own companies. After we discuss the Kraft case, I pose two questions to The First Phase of a Crisis I structure my courses around the three phases of a calami- tous event: pre-crisis, crisis, and post-crisis. While there are a number of books available on the topic, I prefer Timothy Coombs' Code Red in the Boardroom: Crisis Management as Organizational DNA because it, too, follows the differ- ent crisis phases and explores the managerial implications of each. I also draw on cases, articles, in-class exercises, and a simulation to convey important concepts. When we address the pre-crisis phase, students learn how they might prevent disasters from occurring by practicing risk assessment, issues management, crisis prevention, crisis preparation, and management of stakeholder relationships. They also learn how to assemble a crisis management team and create an effective crisis management plan. To teach concepts related to risk assessment and manage- ment, I use a case study about a cleaning service company in Hong Kong. Students break into groups to discuss the com- pany's main areas of risk and the strategies that could be used to mitigate them. A number of students identify employee injury as an area of risk; they suggest that the company should improve its training program so employees know how to use the cleaning equipment and chemicals properly. For this exercise, students also must prepare a plan for deal- ing with SARS, which was a key concern among Hong Kong companies when the case was written in 2004. 48 BizEd SEPTEMBER/OCTOBER 2010 the class: "How could your organization be adversely affect- ed by legislation being discussed by your federal, state, or local governments?" and "How do you think your organiza- tions can manage these emerging risks?" The answers are always interesting. In one class, several stu- dents who worked in online environments said they were con- cerned that impending legislation on the safeguarding of cus- tomer data could have an adverse effect on their companies. To prepare for the situation, they believed they should proac- tively implement new security measures to protect customer data and then undertake lobbying efforts to prove that the new measures were effective. They thought this tactic could help their companies influence the legislation before it was passed. Other students pointed out that multiple companies from the same industry might wield more clout if they joined forces through a trade group to lobby the government when- ever it was considering legislation that might affect them. I find that students are more engaged if the crises under dis- cussion are current, so in addition to using cases in the class- room, I always incorporate news items about recent events. For instance, avian flu was a major concern in 2006 when I was teaching an MBA seminar, so I supplemented my reading packet with articles on this topic. During classroom discussions, students debated how they would design a crisis management plan to prepare for a possible outbreak of the disease. The Crisis Itself During the second part of the course, we study the crisis phase. Students learn how to identify and respond to dif- ferent situations depending on the characteristics of the crisis; this analysis shows them how to deal effectively with disasters once they arise. I rely on cases, current events, and a management simulation to teach this portion of the course. One case I've used concerns a computer attack by hack- ers. The case study encourages participants to consider how company officials should respond to their customers, their employees, and the media once their electronic data has

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