Crisis Theory

Crisis theory in management represents a plan to resolve any sudden events that cause major disturbances in the organization that could affect its employees and its activity.

General Information

The crisis management theories are from public relations, management and include some rhetorical theories such as image restoration and apology theory.

When a brand, company, organization, or institution faces an issue that wasn't foreseen, then the problem can turn into a crisis and at the same time, a crisis can create an issue. That crisis can trigger lots of issues, not single a single one, depending on the gravity of the situation. These types of crisis usually have a theory, hence the name. Leaders and managers discover the theories and try to deal with them through crisis management.

Some crises can affect the image of the company, sales and financial, employees' jobs, contracts, future collaborations and many others.

Types of Crisis

Each organization can be affected in one way or another by different types of crisis. Here are some of the most widespread types:

• Natural crisis: such as floods, tsunami, deadly and infectious diseases (COVID-19). It can provoke disturbance in the economical and financial part of a business, and develop other crises such as lower the number of employees, make a whole in the industry and make business's activity useless for human needs, make raw materials disappear, block shipments and more.
• Technological crisis can happen because of breakdown, hacker attack, corrupted software.
• Financial crisis happen because financial assets suddenly lose a large part of their nominal value. That means layoffs, less revenue, negative world GDP growth, unemployment and many more.
• Crises of Organizational Misdeeds are trigger by bad and risky management decisions knowing the effect and harmful consequences on the business.
• Crises Due to Rumors. When somebody bad-mouths about the brand, it can turn back at you, because people might believe the misinformation.
• Social Media Crisis. When there is an event that affects the name of the brand and reputation due to bad communication and including critical personal religious and /or political beliefs that can lead to a social media crisis.

Relevance to Crisis Management

In Crisis Management we talk about crisis theory when we have some ideas or strategies to take care of an unplanned situation in an organization. When a crisis happens, we start by making theories and find the main problem. Then when we discovered we exact problem, we try to find solutions and create a crisis management plan to start working through hard times. We evaluate the damage and see further steps, in the end.

External Links

• Stages of Crisis Management