Human Resources Crisis Management and Contingency Management HL ONLY.

Human Resources Crisis Management

and Contingency Management

HL ONLY

Learning Objectives To explain the difference between crisis

management and contingency planning Evaluate the costs and benefits of contingency

planning Discuss how far it is possible to plan for a crisis

What disasters could your house face?

What disasters could your business face?

Whole industry crisis

Whole country crisis

Individual company crisis

Write down some examples of each one

Crisis managementRefers to the management of operations before, during and after the event of a crisis

Contingency planning Is about being proactive, development plans before an event happens. A ´what if´ approach

What can a business do to avoid the following ‘disasters’?

• Fire in building• Power supply breakdown• Virus infection• Theft of equipment• Theft of customer data

Think about working in

the headquarters

of a bank

What implications did this have for Pemex

What other types of crisis might a business face?

Hostile takeover

Faulty/dangerous products

Environmental disaster

Major customer withdrawingorders

Physical destruction e.g. bombing / earthquakes / Physical destruction e.g. bombing / earthquakes / fires

Strikes by workforce

What areas of a business

could a crisis affect?

Marketing: public image under threat – PRAd campaignsPromotions to increase sales

Personnel: Leadership style …crisis usually requires direct authoritarian leadership;

internal and external communication that is rapid and direct; external communication that is informative and truthful.

Training

Recruitment

Operations: particularly if JITStorage/warehousingMachinery

Finance: ad campaigns; environment clean up; compensation

Can crisis be avoided?• Companies can have contingency plans

established in order for staff to know how to deal with a crisis when it occurs

Contingency Plan content• A list of the most critical business functions;• A list of the facilities, hardware, software, data, personnel and

other equipment necessary to support those functions• A back-up procedure• A method for getting in touch with all key personnel• A recovery procedure • Education and training of personnel involved in implementing the

plan• Regular drills to test the effectiveness of the plan

Contingency Plans

Value• Sense of security• Limits damage• Speeds up recovery

process• Informs staff training• Preventative

measures can be part of CSR

Limitations• Costly and time

consuming– Including opportunity

cost

• Needs reviewing• Lack of predictability

Key steps in contingency planning

1. Identify the potential disasters – some could be the same for all businesses, some maybe specific to the industry

2. Assess the likelihood of these occurring

3. Minimise potential impact4. Plan for continued operations

Contingency Plan

• Cadbury’s withdraws products made in China

• Cadbury’s is fined

In each case:

• Identify the cause of each event• Identify the potential threat

• What actions could have been taken to prevent these events?• Rank each event on a scale of 1 – 10 in terms of seriousness to the future

success of Cadbury’s• Justify your answer

Strategy tactics – what would the

school do if a bomb went off if you were in the

centre oftown during a college trip?

Strategy tactics You are head of ICT at

a bank and a ‘tape’ of all

customerData has been lost in

transit!

Strategy tactics What are the

implications to Pemex if the main FUEL lines break?How would you have reacted?

Strategy tactics – what if Richard Branson

died in an accident?

How should the Virgin conglomerate react?