Coping with Catastrophe

Many companies have learned the hard way that catastrophe can come from nowhere at any time: the lethal gas leak at a plant in India, the collapse of two sky walks in the Kansas City. But more and more firms are not waiting until calamity strikes to think about what they would do. Instead, they are developing detailed plans to cope with such crises as industrial accidents, product recalls and even terrorist attacks.

It is the element of surprise that is most unsettling to executives confronted by sudden catastrophe. The savviest chief executive in the world often falls victim to a kind of paralysis when a crisis strikes. Any kind of conditioning may thus be comforting in a crunch.

United Airlines have set up corporate SWAT teams made up of employees who are trained to take charge in the event of an unexpected disaster. Attention to detail is a crucial component of most contingency plans. Dow Chemical has produced a 20-page programme for communicating with the public during a disaster, right down to such particulars as who is going to run the copy machines. Many companies designatea single corporate spokesman to field all inquiries from the press. A list may be drawn up of those executives to be notified in emergency situations, and the late-night phone numbers of local radio and television stations may be kept posted on office walls. Some companies even simulate mock disasters as rehearsals for the real thing, like fire drills. Other companies, including McDonald’s, are learning how to be prepared by enlisting the expert advice of public relations firms. In fact, crisis management has become a growth industry. Some firms are focusing on their crisis-management capabilities when talking to potential clients or have people around the country who can move on a 24-hour basis to handle a corporate crisis. Often, these independent experts offer a much needed objectivity, as everybody involved isemotionally charged.

Despite the new popularity of crisis management, executives who are fully ready to respond to emergencies are still in the minority. When adisaster unfolds, many corporate chiefs shake their heads and refuse to acknowledgethe gravity of the problem. The most frequently made mistake is denial, and it’s the biggest one you can make. Denial then gives way to anger. When the crisis doesn’t go away quickly, the panic sets in. Company officials must next overcome a powerful impulse to run for cover from the press and the public. Executives often bury their heads in the sand and refuse to communicate. But adopting a bunker mentality is always to their own detriment. Moreover many companies go astray by lying. When that happens, the public loses faith in the firm, and its products, which may never be restored.

One of the most important steps in dealing with a disaster is investigating its causes. When the fifth floor of a high-rise office tower under construction in Los Angeles collapsed, killing three people, the general contractor was besieged. The company hired a team of safety engineers and executives to assess the possible causes of the collapse.

Many companies become converts to crisis planning only after they have been shaken to their corporate core. That was the experience of H.J. Heinz, the consumer-products conglomerate. The firm attracted unwelcome attention last year when its subsidiary was accused of shipping a million cans of rancid tuna in Canada. Even after the Canadian Prime Minister impounded the fish, Heinz executives refused to speak to the press or the public. Two months ago, Heinz belatedly began organizing its own emergency-management team. Now, with some confidence, it hopes that its next corporate crisis will have a happier ending.

B. Rudolph. Time Magazine

Practicum 9.10

Translate the italicized word combinations in text 9b into Russian

Practicum 9.11

Practicum 9.12

Practicum 9.13

Make up a list of preventive crisis-management measures, set your priorities

III. Communication Practice

Role Play

1) Account for the most natural pattern ofcommunicative behaviour in the suggested settings, rely on Voicing Belief / Disbelief strategy

- a TV-show host is voicing his belief to a spokesperson for United Airlines in their corporate SWAT team’s ability to take charge in the event of disasters to cope with;

- a reporter is voicing his belief in a recently published 20-page programme to cope with the Dow Chemical disaster;

- a journalist is speaking to a spokesperson for McDonald’s voicing his disbelief that they have people around the country who can move on a 24-hour basis to handle a corporate crisis;

- a TV-show host is speaking to a spokesperson for a construction company voicing his disbelief in their being reluctant to assess the possible consequences of the collapse;

- a spokesperson for Consumer Advocacy groups is voicing his disbelief to the CEO of Heinz that the company took proper measures to prevent the Canadian accident

2) Practice Voicing Belief / Disbelief strategyin the following situations

- a CEO is voicing his disbelief in the risks of assessed by the crisis manager

- a CEO is voicing his disbelief in the crisis manager’s attempts to mitigate the involved risk

- a crisis management student is voicing his belief in the idea that the current business practices are getting riskier

3) Practice Voicing Belief / Disbelief strategyin the following situation (to be done in writing)

a new crisis manager of a company, writing a memo to his CEO, is voicing disbelief in the efficiency of measures suggested by the previous crisis manageger

Brainstorming

A group of risk-managers of a software company is elaborating on the strategy on how to treat / handle their biggest client’s claim. The major commercial bank that provides 80% of the software company’s revenue insisted on their making revisions in the business model. Rely on Voicing Belief / Disbelief strategy.