Responding to Crises

TLDR: In this paper, the authors describe a series of phases of crisis response in organizations: at first, the organizations try to ignore the threatening situation, then they try to hide the problems by distorting reports of their performance, through both phases their executives make public statements that all is well.

Abstract: Crises are situations that threaten organizations' continued existence. Organizations encounter crises largely because they did not adapt sufficiently to changes in their social or technological environments. When organizations do face crises, their responses have a series of phases. At first, the organizations try to ignore the threatening situation -- perhaps it will go away. Next, they try to hide the problems by distorting reports of their performance. Through both phases their executives make public statements that all is well.Then the organizations try to address their problems by replacing top executives, but when they replace only one or two, the remaining executives continue to operate as they did in the past, so adaptations are inadequate. Finally, there is a realization that serious changes must take place, but by this time, workers have lost confidence in their bosses, many of the most skilled workers have left, and financial resources have been depleted.