Situational Assessment
When an organization or business recognizes a crisis is occurring, the first step is to convene the Crisis Management Team (Crandall and Spillan, 2013). Once the team has been assembled, an overview of the situation must be obtained. The Crisis Management Team (CMT) has to review all the information, events, and knowledge regarding the crisis. This review and processing of information is considered the situational assessment. Through the situational assessment, the CMT is gain awareness of the crisis and help predict the direction in which it will evolve.
Situational Assessment Examples An example of an impending crisis is the 2016 exposure of Wells Fargo employees opening false accounts. Employees at Wells Fargo were put under great pressures to hit sales quotes in the form of credit cards and bank accounts. Therefore, to reach their quotas, employees opened fake accounts in real customers’ names, without their knowledge or permission. This resulted in over-draft fees and later charges. Once the news hit the media, it cost Wells Fargo its reputation, and close to $190 million dollars in fees and fines. Furthermore, it forced CEO John Stumpf to step down from his position with Wells Fargo (Matthews and Heimer, 2016). A second example of an impending crisis in 2016 was the public sexual harassment lawsuit against Roger Ailes, Chairman for Fox News. After the lawsuit was filed on behalf of former Fox News anchor Gretchen Carlson, many more women stepped forward claiming harassment for years. An internal investigation was launched by bringing in external lawyers to review the claims and mishaps. This investigation uncovered several past allegations of sexual harassment. As a result, the board of directors fired Rogers (whom passed away last week), and forced them to settle the sexual harassment lawsuit with Carlson. Additional lawsuits are still being faced by other accusers (Matthews and Heimer, 2016). Problems in the Assessment In both the Wells Fargo Crisis and the Fox News Crisis, an internal assessment by the company could have helped minimize the impact of the crisis. …show more content…
Mistakes in assessing the entire crisis and gaining full knowledge of its outreach had significant impacts on both organizations. By making the mistake of trying to keep both crisis quiet and covered up, the public outcry did significant damage to both companies reputations. Both companies have been forced to pay significant monies in legal fees, fines, lawsuit settlements, and consumer fees. In addition, both CEO’s stepped down amongst the crisis and severance packages were offered upon their departures. Both companies have had to work tirelessly to try and contain the damage to their companies, reputations, and stock prices. Damage Containment After a crisis has occurred, efforts are made to stop (or contain) effects to the remainder of the business. After a crisis spokespeople for an organization involved in the crisis are often seen on television or social media taking accountability for the crisis. There is immediate communication to the public about the crisis and its stages. For example, it was determined after the 2013 holiday shopping season, that the retailer, Target, had a security breach. Over 40-million customers debit and credit card information had been breached through a third party processors system utilized by Target. (Note: Target was the first company hit. Later: Home Depot, and other retailers were hit with less publicity). Target immediately went public announcing the breach and taking responsibility for the hack. They offered identity theft protection for all consumers and paid monies to offset monies lost through hackers. It has taken three (3) years for the entire crisis to be concluded; however, Target was able to salvage their reputation their damage containment (Abrams, 2017). In contrast …show more content…
(2017, May 23). Target to Pay $18.5 Million to 47 States in Security Breach Settlement. The New York Times. Retrieved May 24, 2017, from https://www.nytimes.com/2017/05/23/business/target-security-breach-settlement.html?_r=0
Crandall, W, Parnell, J. & Spillan, J. (2013). Crisis Management In The New Strategic Landscape. Thousand Oaks, CA: Savant Learning Systems.
Matthews, C., & Heimer, M. (2016, December 28). The 5 Biggest Corporate Scandals of 2016. Fortune. Retrieved May 24, 2017, from http://fortune.com/2016/12/28/biggest-corporate-scandals-2016/
Ross, B., Rhee, J., Hill, A. M., Chuchmach, M., & Katersky, A. (2014, March 19). Toyota to Pay $1.2B for Hiding Deadly ‘Unintended Acceleration’. ABC News.
When an organization or business recognizes a crisis is occurring, the first step is to convene the Crisis Management Team (Crandall and Spillan, 2013). Once the team has been assembled, an overview of the situation must be obtained. The Crisis Management Team (CMT) has to review all the information, events, and knowledge regarding the crisis. This review and processing of information is considered the situational assessment. Through the situational assessment, the CMT is gain awareness of the crisis and help predict the direction in which it will evolve.
Situational Assessment Examples An example of an impending crisis is the 2016 exposure of Wells Fargo employees opening false accounts. Employees at Wells Fargo were put under great pressures to hit sales quotes in the form of credit cards and bank accounts. Therefore, to reach their quotas, employees opened fake accounts in real customers’ names, without their knowledge or permission. This resulted in over-draft fees and later charges. Once the news hit the media, it cost Wells Fargo its reputation, and close to $190 million dollars in fees and fines. Furthermore, it forced CEO John Stumpf to step down from his position with Wells Fargo (Matthews and Heimer, 2016). A second example of an impending crisis in 2016 was the public sexual harassment lawsuit against Roger Ailes, Chairman for Fox News. After the lawsuit was filed on behalf of former Fox News anchor Gretchen Carlson, many more women stepped forward claiming harassment for years. An internal investigation was launched by bringing in external lawyers to review the claims and mishaps. This investigation uncovered several past allegations of sexual harassment. As a result, the board of directors fired Rogers (whom passed away last week), and forced them to settle the sexual harassment lawsuit with Carlson. Additional lawsuits are still being faced by other accusers (Matthews and Heimer, 2016). Problems in the Assessment In both the Wells Fargo Crisis and the Fox News Crisis, an internal assessment by the company could have helped minimize the impact of the crisis. …show more content…
Mistakes in assessing the entire crisis and gaining full knowledge of its outreach had significant impacts on both organizations. By making the mistake of trying to keep both crisis quiet and covered up, the public outcry did significant damage to both companies reputations. Both companies have been forced to pay significant monies in legal fees, fines, lawsuit settlements, and consumer fees. In addition, both CEO’s stepped down amongst the crisis and severance packages were offered upon their departures. Both companies have had to work tirelessly to try and contain the damage to their companies, reputations, and stock prices. Damage Containment After a crisis has occurred, efforts are made to stop (or contain) effects to the remainder of the business. After a crisis spokespeople for an organization involved in the crisis are often seen on television or social media taking accountability for the crisis. There is immediate communication to the public about the crisis and its stages. For example, it was determined after the 2013 holiday shopping season, that the retailer, Target, had a security breach. Over 40-million customers debit and credit card information had been breached through a third party processors system utilized by Target. (Note: Target was the first company hit. Later: Home Depot, and other retailers were hit with less publicity). Target immediately went public announcing the breach and taking responsibility for the hack. They offered identity theft protection for all consumers and paid monies to offset monies lost through hackers. It has taken three (3) years for the entire crisis to be concluded; however, Target was able to salvage their reputation their damage containment (Abrams, 2017). In contrast …show more content…
(2017, May 23). Target to Pay $18.5 Million to 47 States in Security Breach Settlement. The New York Times. Retrieved May 24, 2017, from https://www.nytimes.com/2017/05/23/business/target-security-breach-settlement.html?_r=0
Crandall, W, Parnell, J. & Spillan, J. (2013). Crisis Management In The New Strategic Landscape. Thousand Oaks, CA: Savant Learning Systems.
Matthews, C., & Heimer, M. (2016, December 28). The 5 Biggest Corporate Scandals of 2016. Fortune. Retrieved May 24, 2017, from http://fortune.com/2016/12/28/biggest-corporate-scandals-2016/
Ross, B., Rhee, J., Hill, A. M., Chuchmach, M., & Katersky, A. (2014, March 19). Toyota to Pay $1.2B for Hiding Deadly ‘Unintended Acceleration’. ABC News.