CRISIS-PREPAREDNESS IN CITIES
FROM PERCEPTION TO PREVENTION
Finn Frandsen and Winni JohansenASB Centre for Business Communication
SETRIC - Workshop 1: Prevention (Naestved May 26-27 2005)Dias 2
Programme
Introduction Ongoing research projects From “crash management” to crisis management
− Debunking the stereotypes of crisis management
− Trends within the study of crisis management
How prepared are they? (2004)− Some findings from an investigation of the
crisis-preparedness of private companies and public authorities in Denmark
Prevention strategies The new symbolic capital of cities and
municipalities Some challenges
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Ongoing research projects
1) General research project: new concepts and models - multidimensional approachBook: Krisekommunikation: Når virksomhedens image og omdømme er truet (in press)
2) Smaller research project (a): media coverage of Danish business crises from 1960 to 2000
3) Smaller research project (b): crisis-preparedness in Denmark 2003Report: How prepared are they? An investigation of the crisis-preparedness of private companies and public authorities in Denmark (2004)
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Myths about business crises
1) Business crises have increased significantly in the 1990s
2) Most business crises involve accidents, chemical and oil spills (= most crises are sudden crises)
3) The industrial sectors cause most of the crises4) Employees are responsible for most business
crises
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Realities
1) The annual number of business crises has remained relatively constant during the 1990s (between 6,000 and 8,000), but there are significant changes within crisis categories (from operational to human causes)
2) White-collar crime (17%), mismanagement (13%) and labour disputes (12%) are the most frequent types of crises (= most crises are smoldering)
3) The majority of crises have arisen in the service industries (banks, insurance)
4) The majority of crises are caused by managers, not employees (approximately 3 out of 4 crises)
Source: Millar (2004)
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Trends within the study of crisis management (1)
From a narrow understanding...
1) Crises perception: crises are events2) Crises management: mainly reactive “crash
management” - security management - risk management (the “command and control” tradition)
3) Crises communication: mainly instructing and adjusting information (Sturges 1994)
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Trends within the study of crisis management (2)
... to a broader understanding
1) Crises perception: crises are events and processes (complexity and dynamics)
2) Crises management: also proactive and interactive crisis management (issues management, knowledge management, stakeholder management, reputation management)
3) Crises communication: also internalizing information (Sturges 1994)
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Purpose of survey
To investigate the crisis-preparedness of privatecompanies and public authorities in Denmark in the2003:
1) Crisis perception and experience (beliefs, types, definitions, organizational culture)
2) Crisis management (management activities before, during, and after a crisis)
3) Crisis communication (types of both internal and external crisis communication, communication channels, text types, media management)
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Survey design
1) Questionnaire• Electronic questionnaire consisting of 32
questions in all• Period: May-August 2003
2) Interviews• Semi-structured in-depth interviews with 18
respondents representing two different populations
• Period: August 2003
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Selection of populations
Population (1)− DK 500 established by the Danish business
magazine Børsen Executive: the 500 biggest companies according to turnover
− we contacted 456 companies and received 160 questionnaires (35 percent response rate)
Population (2)− State (royal house, ministries, etc.), 5 amter
or counties (hospitals, police districts, etc.), 118 kommuner or municipalities, public companies (supply, refuse collection and disposal, transportation, etc.)
− We contacted 295 authorities and received 138 questionnaires (46 percent response rate)
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Some findings
Crisis perceptions Events and situations that may result in a crisis
according to respondents Perceived consequences of crises Crisis-preparedness (plan, teams, etc.) Crisis preparation efforts Evaluation of crisis management capability Future needs
CRISIS PERCEPTIONS
68,8
77,5
82,5
26,3
45,6
73,9
68,866,7
27,525,4
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
Krise: der i et kort tidsrumsætter dele af virksomhedeneller myndigheden ud af drift
Krise: der involverer skade påinteressenter (kunder, klienter,
medarbejdere)
Krise: der truer helevirksomhedens eller
myndighedenseksistensgrundlag
Krise: der håndteres dårligt afledelsen i en virksomhed eller
myndighed
Krise: der giver negativ omtalei medierne
Kriser
Procent
Privat (n=160) % Offentlig (n=138) %
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Crisis perceptions
No significant variation between municipalities (M)and private companies (C):
Short space of time (1), damage to stakeholders (2) threatens the very existence of the organization (3) handled improperly by the management (4)
Significant variation:
Crises are leading to negative media coverage (5): municipalities (14%) versus companies (45%)
EVENTS OR SITUATIONS THAT MAY RESULT IN A CRISIS
55,0
75,6
57,5
34,4
23,1 23,1
39,4
54,4
46,9
63,8
35,0
56,3
11,3
23,1
11,9
47,5
11,3
33,3
64,5
71,7
48,6
11,69,4
23,9 23,2
33,3
81,2
31,9
49,3
10,9
18,1
5,8
53,6
5,1
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
Problemer medprodukt/serviceydelse
Ulykker, der involverer
personerBombetrusler
Driftsforstyrrelser
Rygter
Dårligt årsresultat
Strejker
Boykot af
virksomhed/myndighed
og
Negativ omtale i
medierneTerrorisme
Dårlig ledelseIT-nedbrud
Fusion/sammenlægning
Reduktion i
medarbejderstaben
(fyringer)Sexchikane
Miljøforurening
Tab af licitation/stor
kontrakt
Begivenheder
Procent
Privat (n=160) % Offentlig (n=138) %
Events or situations that may result in a crisis
Private companies
Municipa lities
Terrorism 63.8% 90.6%
Accidents involving persons 75.6% 64.1%
Bomb threats 57.5% 73.4%
Computer breakdowns 56.3% 51.6%
Pollution 47.5% 56.3%
Problems with product/services 55.0% 26.6%
Irregularities in supply 34.4% 37.5%
Negative media coverage 46.9% 20.3%
Boycott of company/authority or product/service
54.4% 25.0%
Mismanagement 35.0% 29.7%
Strikes 39.4% 20.3%
Downsizing (reduction of personnel) 23.1% 17.2%
Rumours 23.1% 9.4%
Negative result 23.1% 7.8%
Take overs and mergers 11.3% 10.9%
Sexual harassment 11.9% 6.3%
Loss of tender or important contract 11.3% 3.1%
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Perceived consequences of crises
Municipalities:1. Political problems (65.6 %)2. Image/reputation problems versus public (citizens) (48.4%)3. Credibility problems versus clients/customers (37.5%) 4. Economic problems (35.9%)5. Managerial problems (31.3%)6. Image/reputation versus clients/customers/partners (29.7%)
Private companies:1. Image/reputation versus clients/customers/partners (78.1%)2. Economic problems (78.1%) 3. Credibility problems versus clients/customers (76.9%) 4. Loss of clients (67.5%) 5. Credibility problems versus personnel (56.3%)6. Image & reputation versus public (citizens) (55.0%)
Crisis experiences within the last 5 years
Private companies
Municipa- lities
Kidnapping/hostage-taking 1% 0%
Boycott 5% 2%
Terrorism 3% 4%
Sabotage 4% 4%
Sexual harassment 8% 5%
Price-fixing and cartels 13% 2%
White collar crime 14% 11%
Product recall 26% 2%
Leak of confidential infos 16% 16%
Industrial accidents 23% 9%
Take overs (partly or totally) 29% 4%
Huge financial problems 21% 26%
Loss of tender or important contracts 31% 7%
Credibility problems 26% 14%
Strikes 29% 14%
Mismanagement 25% 27%
Rumours 32% 19%
Pollution or spill 19% 48%
Mergers 34% 14%
Negative political conjonctures 28% 29%
Accidents in handling equipment 34% 30%
Product defects 51% 19%
Bad economic conjonctures (crisis in whole industry)
56% 29%
Computer breakdowns 39% 52%
Operational irregularities 52% 47%
Huge downsizing (personnel) 67% 38%
Preparedness: crisis plan, crisis manager, and crisis team
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Crises-preparedness
1) Crisis planC (66.9%) - M (93.4%)
2) Formally nominated crisis managerC (59%) - M (74.6%)
3) Permanent crisis teamC (38%) - M (55.7%)
Crisis preparation efforts
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Crisis preparation efforts
C M
Risk analysis 57.5% 53.1%
Issues management 46.9% 29.7%
Media monitoring 44.4% 6.3%
Media training 40% 12.5%
Crisis simulations/exercises 26.3% 23.4%
Courses: internal c. management 18.1% 10.9%
Stakeholder analyses 14.9% 9.4%
Courses: external c. management 12.5% 14.1%
Evaluation of crisis management capability
Blue: in relations to environmentRed: internally Beige: evaluation in total of crisis preparedness
FUTURE NEEDS
44,4
30,6
16,712,5
33,3
63,9
29,2
37,5 38,9
26,4
12,5
25,0
8,3
52,2
17,4
5,88,7
24,6
50,7
20,3
40,6
34,8 36,2
11,6
46,4
4,3
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
Risikoanalyse
Issues management
Interessent- eller stakeholder-analyse
Medieovervågning
Medietræning
En (bedre) kriseplanEn (bedre) krisestab
Kurser i intern kriseledelse og
krisekommunikation
Bedre intern koordinering mellemafdelinger og/eller ledelse og ansatte
Kurser i ekstern kriseledelse og
krisekommunikationBedre ekstern koordineringKrisesimulationer eller øvelser
Andet behov
Procent
Privat (n=72) % Offentlig (n=69) %
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The pre-crisis stage:what are we up against?
1) The establishment of belief structures regarding risk and the probability of risk
2) Norms for mitigation and crisis response (crisis plans)
3) The decay of those structures4) Processes of incubation and complex interaction,
nonlinear interaction of emerging environmental contingencies, and minor system variance
5) Missed warnings, failure to perceive and/or act upon crisis cues
6) A crisis trigger event, the onset of harm, recognition of crisis
Source: Seeger, Sellnow & Ulmer (2003)
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Prevention strategies (1):a three-staged model
Source: Coombs (1999)
Before the crisis 1) Signal detection2) Crisis prevention3) Crisis preparation
During the crisis 1) Crisis framing2) Crisis containment3) Crisis recovery
After the crisis 1) Evaluation2) Organizational learning3) Post-crisis actions
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Prevention strategies (2): the sub-stage of crisis prevention
Three categories:1) Issues management: to prevent an issue from
maturing into a crisis2) Risk management (aversion): to eliminate or lower
risk levels3) Stakeholder management (relationship building):
to cultivate positive relations with key stakeholders
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The new symbolic capital
The new entrepreneurial way of urban governance: competition (“selling the city”)
City branding - branding of municipalities: the city or the municipality as a brand
The clash of different crisis perceptions and “crisis management cultures” in municipalities
− example from a larger city/municipality in Jutland: security manager versus communications director
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Challenges
Crises are “multiple realities”: − they can be defined and typologized in many
ways (the nature and intensity of the crisis)− they are often very complex and dynamic− they often give rise to multiple, if not
divergent perceptions of the situation Crises are culturally and politically defined events
and processes− contain levels of conflict − they arouse strong emotional responses
The mixed nature of many crises: disasters are transformed into organizational crises!
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Challenges (2)
Crisis management, too, is complex and dynamic: reactive, proactive, and interactive (the three basic strategies)
Crisis management is− a) strategic planning
· prescriptive approach
− b) diagnosis and improvisation · contingency approach · emergent approach
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Challenges (3)
Crisis communication, too, is complex and dynamic: what to say when and how?
− instructing communication (what, how and who?)
− adjusting communication (psychological crisis help)
− internalizing communication (image and reputation)
The many stakeholders of complex organizations
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Contact
Finn [email protected]
Winni [email protected]
ASB Centre for Business Communicationwww.asb.dk/centres/cbcom
Aarhus School of Businesswww.asb.dk