Crisis Management – Signal detection

Summary Crisis Management in Hospitality Industry Signal Detection Model Advantage and Disadvantage of Signal Detection Model Recommendation

Introduction Crisis is defined “as an adverse incident or a series of events that has the potential to seriously damage an organisation’s employees, operation, business and reputation”, Paraskevas et al (2013:35) Crisis Management is set of factors designed to combat crises and to lessen the actual damaged inflicted. (Coombos, 2011) There are elements that are common to most definitions of crisis: a threat to the organization, the element of surprise, a short decision time a need for change

Crisis Management in Hospitality industry “The Hospitality industry is prone to crises as it is highly fragmented and complex with many interdependencies among its sectors”. (Paraskevas, 2012) Hospitality industry is incorporated with other industries, meaning that a wide range of potential crisis within hotels can affect and impact others business. The exposure of Hospitality business to a wide range of crises, indicates a significant challenges’ that hospitality organisation, face it in the operation.

Crisis in UK Industry Paraskevas (2009), 60% of organisational crises normally emit warning signals early enough to be prevented. 43% of companies experiencing a disaster never recover 40% of companies that have CM plans do not have a team dedicated to disaster recovery 43% of companies that have a business continuity plan do not test it annually 80% of companies have not developed CM to provide IT coverage for business continuity Of those who have had a crisis, 42% STILL do not have a plan! yet…97% felt confident that they could respond well to a crisis Only 23% of businesses have no early warning of some kind; about 75% of crises result from inappropriate action or inaction by top management (UK Statistics, 2012).

People Internal External Technical Types of Crisis Signals Gossip / Rumors Communities Personal Special Interests Networks Media The Culture Consumers Internal External Personal Data Remote Bases Sensing PCs Government IT Monitoring Industry Source: Mitroff (1988) Technical

Crisis Categorization Crises categorised by the types of risks in terms of their impact and probability Crisis Categorization Low Impact High Impact Low Probability High Probability Amber Zone Red Zone I I I I I I I I I I I I I I I I I I I I I I I I Hazard Likelihood Green Zone Gray Zone Hazard Severity Source:Mitroff (1988)

Stages of Crisis Management Crises can be described in terms of stages, or relatively identifiable sequences of events and reactions. Stages enable planners to monitor risks, progress, target stakeholders, and take strategic action appropriate to the stage. There are many models; below are two prominent ones: Fink’s Crisis Lifecycle Prodromal Risk cues that potential crisis can emerge Crisis breakout Triggering event with resulting damage Resolution Crisis no longer a concern to stakeholders Chronic Lingering effects of crisis Mitroff’s Five Stages of Crisis Management Signal detection Warning signs & efforts to prevent Probing & prevention Search risk factors & reduce potential for damage Damage containment Keep from spreading to uncontaminated areas Recovery Return to normal operations asap Learning Review & critique CM efforts for improvements

Signals Warning Mitroff (1988:18) observed that “long before its actual occurrence, a crisis sends off a repeated and persistent trail of early warning signals” “Signal Detection is a first line of defence in Crisis Management” (Paraskevas & Altiney, 2013)

Crisis Signal Detection Model Source: Paraskevas et al (2013)

Scanning for Signals internal; the organisation’s structure, culture, and resource variables, Task; industry force variables economic, technological, socio-cultural, and political-legal variables Capture of Signals core detectors (employees, guests, suppliers, industry organisation; ad hock (competitors) and experts or consultants, Signal Transmission communication platform; Paraskevas et.al (2013)

Advantage and Disadvantage With clearly defined roles, organisation is better prepared to react and prevent a wide range of crisis signals appropriate signal detection framework may change its dynamic and path of crisis Strengthen organisation’s competitive position and reputation. it is easier for organisation to train employee and collect background information’s in timely and effective manner. Effective communications potentially enhancing public perception of the company Crisis signals could be dynamic and complex and is not possible to plan and prepare for every situation The high number of employees who participate in the process of crisis signal detection plan may affect smoothly and efficient coordination in information exchange Crisis management planning could be expensive. Excessive focus on potential threats can divert management focus on how to capitalize on growth opportunities

Conclusion Hospitality organisation operates in complex external and internal business environment. It is crucial that Hospitality organisation engages in defining and establishing, crisis plan and crisis management team. Importance of focusing on communication issues framework. Organisations that anticipate the possibility of a crisis and prepare properly will be better equipped to manage different situations.

Recommendation Organizations should redefine the role of crisis management plans and crisis management teams. An effective crisis response should be viewed as a living (co-evolving) system within the organization. By adopting complexity principles the organization can make this system far more effective.

Bibliography Coombos W.T (2011), Ongoing Crisis Communication: Planning, Managing, and Responding, USA: SAGE Publications, Inc Mitroff, I. (2004). Crisis Management leadership, US: John Wiley and Sons. Mitroff I and Anagnos G (2001) Managing Crises Before They Happen, New York: AMACOM. Mitroff I (1988), Smart Thinking for Crazy Times: The Art of Solving the Right Problems, USA: Berrett-Koehler Publishers, Inc., Paraskevas, A. and Altinay, L. (2013),Signal Detection as the First Line of Defence in Tourism Crisis Management, Tourism Management, 34(1), pp. 158-171 Paraskevas, A. (2012) “Aligning Strategy to Threat: A Baseline Anti-terrorism Strategy for Hotels”, International Journal of Contemporary Hospitality Management, vol. 27, 7, pp. 140. Paraskevas, A., Altinay, L., McLean, J. and Cooper, C. P. (2013) “Crisis Knowledge in Tourism: Types, Flows and Governance” Annals of Tourism Research, vol. 41, pp. 140-152.