Organizations

Issues and Crisis Management: the Death and Life of Organizations:

Talking about corporate organization, we take into consideration all business entities registered by law for the provision of either services or products that stimulate profitability.

By implication, a corporate organization could be profit or service oriented. Mostly, profit oriented corporate organizations are committed to profitably filling the economic needs of consumers and in general members of the society, while service oriented corporate organizations are usually committed to providing the socio-economic (infrastructure) needs of the members of the society with the primary aim of effecting a standard livelihood for the society.

In most economies of the world, especially where the conservative neo-classical system of economy thrives, the government is usually committed to provision of services to the citizenry, while profit oriented corporate organizations are manned by private individuals – this system is known as capitalism and characteristic of neo-liberalism economic system.

Having absorbed the fact on what a corporate organization is, and what characteristics could differentiate one type from the other, we still arrive at the conclusion that the point of confluence between corporate organizations, irrespective of their inclination is that they are indebted to a set of ever-willing patrons who comprise buyers and sellers (market).

This patrons classified as markets are the major focus of every corporate organization. The success of any corporate organization is measured by the extent to the share of the market that it controls, and how it is able to shape the opinion of those patrons towards accepting it as socially and financially responsible.

Patrons on one hand, the corporate organization on the other hand is subjected to a stream of spontaneous elements created out of the naturalness of the artificialness of the business environment. This is however not to say that the business environment is independent of the natural environment.

The artificial business environment is further grouped into (1) The Internal business environment (or controllable business environment) and (2) The External business environment (or uncontrollable business environment).

The internal environment of business are those elements of business that are put in place by the business itself for operation purposes, these are basically regarded as the factors of production. They can be acronymed as CELL – Capital, Entrepreneur, Labour, Land.

The uncontrollable elements that form the business environment are those elements created out of basic social structure, they include Politics, Economy, Religion, Law, competition, Technology, Environment, Consumer behaviour etc. These elements, the corporate organization can only attempt to influence (but not control).

As much as the organization automatically becomes subjected to the analyzed environments, there are certain reactions from the environment that can cause the death or instability of the business. This analogy brings us to the major thrust of this discourse – The Death and Life of Organizations

Businesses are bound to fail when in the course of business operation they ignore or undermine the dynamism, complexity and mutifacetedness of the environment they operate in.

We should not forget that a business is patronized not only on the basis of the product or services it can offer, but the image, the goodwill and the way in which such business has proven to be socially responsible in its day to day activities.

In Public Relations terms, the internal and external elements of the business environment that comprises human beings are highly taken into consideration. This is due to the fact that it is believed that humans are the builder and destroyer of any institution. This human aspect of the organization in PR is known as Publics.

As long as a corporate body is in favour with its Publics, its existence is assuredly continuous, where it does not, the company were better not established.

Any organization that lacks good reputation with its publics will definitely be impeded in growth and consequently die off.

For instance, the case of the Nigerian Indomie Noodles “killer products” can be considered. When consumers who were not even affected by the widespread rumour that the death of one young man was caused by his consumption of Indomie Noodles, and that Indomie contained toxic materials; the public (target audience/consumers of Indomie) dropped their demand of the product and helped in the spreading of the rumour, such that those who were ardent loyalists of the product had to take the product with utmost caution.

Indomie was then at the verge of extinction. Were it not for urgent steps taken in professionally handling the crisis through the instrumentality of PR, Indomie would have become history.

Do not forget that the case then was said also rumored to be an instigated crisis by one of the competitors in the pasta market. This could be possible, so corporations should not be ignorant of the wiles of the wicked: some competing organizations could go as far as destroying the image of its competitors to create problems for the business, so that while the affected business is embattled, the publics of the affected product could be snatched.

In 1982, Europe's Johnson and Johnson had a taste of what crisis really is. Theirs was a major crisis. It was discovered that numerous bottles of Johnson and Johnson's Extra-Strength Tylenol capsules had been laced with cyanide. By the end of the crisis, seven people had died. How Johnson and Johnson dealt with this situation set a new precedent for crisis management. The company was lauded for its quick decisions and sincere concern for its consumers. Despite initial losses, Johnson and Johnson regained and exceeded its previous market share within months of the incident.

Same was the case with. Odwalla's apple juice, which was thought to be the cause of an outbreak of E. coli bacteria, the company lost a third of its market value. The same allegation against Jack in the Box restaurant in 1993 caused the hamburger chain's stock price to fall from $14 a share to nearly $3 a share: what a great loss to investors!

The examples given would make you understand that crisis is a threat or any issue that stands as a threat to the existence and development of an organization. We can also observe that in every case where there had been the issue of crisis, companies have experienced great losses, not only in terms of reputation, but also financially, why because they did not take into consideration the possibility that those issues (crises), which have cost them their entirety could have occurred.

That is to say, they never had any workable crisis plan on ground to contain those contingencies that arose. Geary Sikich mused in one of his works stating “Failure to have a workable Crisis Management Program is akin to playing Russion Rullete with an automatic pistol. You don't have the luxury of pulling the trigger on an empty chamber”

Where an organization fails to plan ahead to contain crisis, its publics are allowed to form opinions about the organization when it hits the iceberg of crisis, and this is generally dangerous, because the publics may conflagrate the real matter on ground and it becomes difficult for the organization to change these views. After all, it is psychologically true that it is easier to form opinions for people than to change people's opinions.

Trying to change opinions in terms of crisis can be termed as crisis management. In this case, the organization will only be reacting to public opinions, which will be concentrated divergently from the publics on the organization. The model below explains the situation an organization is in when reacting to crisis.

Article Source:http://www.articlesbase.com/
Industry Expertise : IT Consulting | Financial Services | Insurance | Technology Companies | Retail Industry | Travel and Transportation | Healthcare | Manufacturing & Logistics | Printing Industry | Telecommunication Industry | E-Marketing
Disclaimer | Privacy Policy
Copyright 2007 © Kanvonix Soft Solutions India