Crises are surprise incidents that pose threats to organizations or individuals, who must immediately respond with quick decisions and clear heads. Organizations can prepare crisis management plans to deal with crises; the first step is identifying the types of crises that could affect the business.
Business crises include lawsuits, discrimination allegations, strikes or protests, loss of key employees or managers, employee scandals and disruptions in the services businesses need to operate. Equipment breakdowns can also be a crisis for businesses that are unprepared. Companies and individuals also encounter public relations crises. Organizations also have financial crises that reduce cash flow and affect liquidity, including a lack of investors, insolvency and inflation. Technological breakdowns, mistakes and volatile markets also affect businesses and can present crises.
Natural and Physical Threats
Natural disasters are physical threats to individuals, organizations or properties. They include floods, fires, tornadoes, hurricanes and earthquakes. Additional physical threats may include terrorist activities, arson or any instance in which a person or group purposely harms or damages individuals and organizations. Employee death or injury are other physical threats to businesses.
Employees who behave illegally or unethically act with malevolence; intentional harm to an individual or company is malevolence. This type of crises includes security breaches, product tampering, sabotage, extortion, lawsuits and employee scandals. Malevolence outside of an organization may include kidnapping, assault or slander.
A country’s constitution is the ultimate guide for the governance and rights of the people. The first constitutional crisis occurs when leaders attempt to preserve the social order through the delay of rights and guidelines within a constitution. This crisis occurs when the country is in danger and can only be temporary. A second constitutional crisis occurs when individual leaders in the government disagree about the guidelines within the constitution and both parties must compromise. The final constitutional compromise occurs when does not offer the proper solution to a political crisis or guides the country down the wrong path.