At one point or another, most organizations face some type of crisis situation. Among other things, crises can be safety based, technologically based, or environmentally based. In crises, management must make decisions under a great deal of pressure, and while many companies don't concern themselves with crisis management, it is imperative that it be on every management team's agenda.

The goal of this activity is to demonstrate the impact of crisis management plans.

This activity is important because, as a manager, you will need to understand the necessary elements of an effective crisis management plan.

An effective plan for crisis management (CM) should include the following elements: (1) strategic actions such as integrating CM into strategic planning and official policies; (2) technical and structural actions such as creating a CM team and dedicating a budget to CM; (3) evaluation and diagnostic actions such as conducting audits of threats and liabilities, and establishing tracking systems for early warning signals; (4) communication actions such as providing training for dealing with the media, local communities, and police and government officials; (5) psychological and cultural actions such as showing a strong top management commitment to CM and providing training and psychological support services regarding the human and emotional impacts of crises.

Management guru Ram Charan suggests that there are specific things that leaders should do after the crisis in order to move their companies forward. Those include: (1) Change your mindset. Acknowledge that the world has changed. Question everything that worked during the boom years. Prepare for the worst so you can beat competitors who haven't. (2) Get your financial house in order. Strengthen your balance sheet so you can raise funds to invest for growth. (3) Make a move for market share. The pie is getting smaller, and unprepared competitors are getting weaker. Buy assets at low prices. Solicit new customers while your rivals are cutting back on service. (4) Rethink your reward system. Although it is tempting to make across-the-board pay cuts, make sure you reward your best people so they aren't tempted to leave to join a healthier, higher-paying employer. If you have to cut someone's pay, start with yourself. (5) Dare to innovate. Take well-considered risks in order to realize possibilities. States Richard Tedlow, a Harvard Business School professor, "A leader is someone who doesn't do what everyone else does. If you have a product you believe in, now is the time to make a bigger investment, not a smaller one."

Match each of the options above to the items below

1. Psychological and cultural
2. Evaluation and diagnostic
3. Communication
4. Technical and structural
5. Strategic

• Change your mindset

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• Get your finances in order

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• Make a move for market share

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• Rethink your reward system

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• Dare to innovate

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