The Role of Perception in Crisis Planning

Topics: Crisis management, Management, Strategic management Pages: 21 (6770 words) Published: May 18, 2013
Public Relations Review, 26(2):155–171 ISSN: 0363-8111

Copyright © 2000 by Elsevier Science Inc. All rights of reproduction in any form reserved.

John M. Penrose

The Role of Perception in Crisis Planning
ABSTRACT: This article reveals that a company’s perceptions of crises have a profound effect on primary crisis management activities. Although briefly reviewing the technical aspects of crisis management, the research examines the effects that threat and opportunity constructs have on crisis planning. The article concludes with some recommendations concerning the communication of a crisis’s dual nature before, during, and after a crisis situation. John M. Penrose is professor of business communication and chair of the Information and Decision Systems Department in the College of Business Administration at San Diego State University.

Much of the traditional crisis management literature stresses the fundamental importance of implementing an enterprise-wide crisis plan. In most cases, successful crisis resolutions stem from an organization’s instilled crisis plan, whereas most instances of mishandled crisis situations result from a company’s lack of such a plan.1 Researchers tend to agree that organizations that practice proactive crisis management will lessen the damage of a crisis. Conversely, when organizations only respond to crises, the resulting damage seems to overshadow potential opportunities.2 Why is it then, that about 40% of Fortune 1000 industrial companies still do not have an operational crisis plan?3 Indeed, many of these companies believe that their company’s prestige and goodwill will carry them through any unforeseen misfortune. This may be true for huge companies, such as Exxon, that also have the financial resources to weather even the most disastrous crisis. But, smaller, lesser-known companies must heed the fact that 80% of companies without a comprehensive crisis plan vanish within 2 years of suffering a major disaster.4 Thus, it seems that a crisis plan is indeed an invaluable precaution that any company must take. Summer 2000 155

Public Relations Review

THE ROLE OF PERCEPTION The perception of crises may ultimately affect crisis outcomes. Furthermore, the perception of a crisis as an opportunity or a threat may also have significant implications. Crises are not inherently good or bad; they are merely perceived by most as bad. Many examples reveal the severe penalties attached to the unpreparedness of an organization, such as the Union Carbide disaster or the Exxon Valdez oil spill.5 Crises can destroy a company’s reputation in a concentrated time frame. When reviewing the results of the Union Carbide disaster or the Exxon Valdez oil spill, one may view crises exclusively as threats. But would the perceptions of the organizations have been different if senior management had perceived these threats differently, prepared accordingly, and executed differently? Opportunities exist within any crisis situation. New leaders may emerge from a crisis, and in most cases, a crisis leads to accelerated change in business processes that may prove advantageous in the long run.6 Often companies that do survive disasters are more prepared for the next one. This thought does depend, however, on the extent of learning that the company in question absorbs from the event. Finally, companies that do handle a crisis effectively are generally perceived in a more positive way.7 Many companies simply fail to identify these potential positive outcomes. The perception of a crisis as an opportunity should lead to an increased ability to consider various alternatives and thus a greater extent of proactive planning. Managers generally view opportunistic situations to be more controllable, thus including more members into the resolution process and thereby increasing the flow of alternatives.8 On the other hand, the perceiving of a crisis as a threat will cause managers to limit the amount of information they...
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