Sample Chapter:

Any hazard type can generate harm, losses, i.e. consequences which can be limited to physical losses, or evolve into image related damages. These last ones are sometimes more difficult to fix, especially if a corporation ends up looking like an arrogant monster that "could just come in and throw lots of its money at a problem that was more than just a money issue..." (Albrecht, S., Crisis Management for Corporate Self Defence, AMACOM, 1996).

Sometimes poorly managed issues, or poor risk communication, internally or externally, can lead to trigger public opinion/media hazards, like boycotts, blockades of facilities, strikes, media campaigns etc.

Once issues have been identified, they have to be studied, evaluated and analyzed in order to determine their potential impact on the organization. McGrath suggests that organizations “select from 40 or 50 possible issues those four or five that will make a noticeable difference in a company’s ability to achieve its objectives.” (McGrath, G., Start Well to Finish Well (Extracts from recent reports and conferences of The Conference Board), Across the Board, Nov/Dec. 1995: 57). As already stated for natural hazards, attention has to be devoted to the fact that “instead of the past determining the present (the historic approach), future is colonized by risk, and therefore determines the present”.

A vivid example of this is the recent “chocolate scandal” in Switzerland. The new director of a major food company, famous for a celebrated brand, sold in the same identical package for decades decided to mandate a worldly renowned architect and designer to repackage the brand. As soon as the new, very attractive, space-age package was on the shelves of supermarkets people responded with a double outcry: they had lost their beloved traditional package, and the new package was an environmental monster, in volume, and not recyclable. This prestigious design and marketing exercise resulted in an estimated loss of 24% of the annual sales volume.

In other cases a small physical incident can drift into a fully pledged crisis as was the case when a small rockfall, no bigger than a fist severely wounded a railroad worker, generating a full three weeks of general strike by all the railroad workers “because the company did not provide a safe working environment”.

Case Studies

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