1. Issues Management and Crisis Management
Chapter 6
Issues Management and Crisis Management
Issues Management and Crisis Management
Chapter 6
Prepared by Deborah Baker Texas Christian University
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz Copyright ©2009 by South-Western, a division of Cengage Learning.  All rights reserved

2. Chapter 6 Learning Outcomes
Issues Management and Crisis Management
Chapter 6 Learning Outcomes
Distinguish between the conventional and strategic approaches to issues management.
Identify and briefly explain the stages in the issues management process.
Describe the major components in the issues development process and factors in actual practice.
Define a crisis and identify the four crisis stages.
List and discuss the major stages or steps involved in managing business crises. 2

3. Chapter 6 Outline Issues Management Crisis Management Summary
Issues Management and Crisis Management
Chapter 6 Outline
Issues Management
Crisis Management
Summary
Key Terms
Discussion Questions
Issues Management
Approaches to Issues Management
The Changing Mix of Issues
The Issues Management Process
The Issues Development Process
Issues Management in Practice
Crisis Management
The Nature of Crises
The Four Crisis Stages
Managing Business Crises
Summary

4. Introduction to Chapter 6
Issues Management and Crisis Management
Introduction to Chapter 6
This chapter focuses on issue and crisis management, and the planning processes required to improve stakeholder management and to respond to stakeholder expectations.

5. Conventional Approach Strategic Management Approach
Chapter 6
Issues Management and Crisis Management
Issues Management
Conventional Approach
Strategic Management Approach
Narrow Focus
Broad Focus

6. Conventional Approach
Chapter 6
Issues Management and Crisis Management
Issues Management
Conventional Approach
Issues fall within the domain of public policy or public affairs management.
Issues typically have a public policy / public affairs orientation or flavor.
An issue is any trend, event, controversy, or public development that might affect the corporation.
Issues originate in social / political / regulatory / judicial environments.

7. Strategic Management Approach
Chapter 6
Issues Management and Crisis Management
Issues Management
Strategic Management Approach
Issues management is typically the responsibility of senior line management or strategic management staff.
Issues identification is more important than it is in the conventional approach.
Issues management is seen as an approach to the anticipation and management of external / internal challenges to the company strategies, plans, and assumptions.

8. Strategic Issue Management
Chapter 6
Issues Management and Crisis Management
Strategic Issue Management
Figure 6-2 8

9. Issues Definition Issue
Chapter 6
Issues Management and Crisis Management
Issues Definition
Issue
A matter that is in dispute between parties. The dispute evokes debate, controversy, or differences of opinion.

10. Characteristics of an Emerging Issue
Chapter 6
Issues Management and Crisis Management
Issues Definition
Characteristics of an Emerging Issue
Terms of the debate are not clearly defined
Issue deals with matters of conflicting values and interest
Automatic resolution is not available
Issue is often stated in value-laden terms
Trade-offs are inherent

11. Issues Management Process
Chapter 6
Issues Management and Crisis Management
Issues Management Process
Basic Assumptions
Issues can be identified earlier, more completely, and more reliably
Early anticipation widens the range of options
Early anticipation permits study and understanding of the full range of issues
Early anticipation permits organization to develop a positive orientation towards the issues
Organization will have earlier identification of the stakeholders
Organization will be able to supply information to influential publics earlier and more positively, creating better understanding

12. Model of Issues Management Process
Chapter 6
Issues Management and Crisis Management
Model of Issues Management Process
Identification of Issues
Analysis of Issues
Prioritization of Issues
Formulation of Issue Responses
Implementation of Issue Responses
Evaluation, Monitoring, and Control of Results
Figure 6-3

13. Identification of Issues
Chapter 6
Issues Management and Crisis Management
Identification of Issues
Scan the environment
Identify emerging issues and trends

14. Identification of Issues
Chapter 6
Issues Management and Crisis Management
Identification of Issues
Leading Forces as Predictors of Social Change
Leading events
Leading authorities / advocates
Leading literature
Leading organizations
Leading political jurisdictions

15. Identification of Issues
Chapter 6
Issues Management and Crisis Management
Identification of Issues
Figure 6-4

16. Issues Selling and Buying
Chapter 6
Issues Management and Crisis Management
Issues Selling and Buying
Issues Selling
Relates to middle managers exerting upward influence in organizations as
they try to attract the attention of top managers.
Issues Buying
Top managers adopt a more open mind-set for the issues that matter to
their subordinates.

17. Analysis of Issues Who (which stakeholders) is affected by the issue?
Chapter 6
Issues Management and Crisis Management
Analysis of Issues
Who (which stakeholders) is affected by the issue?
Who has an interest in the issue?
Who is in a position to exert influence?
Who has expressed opinions on the issue?
Who ought to care about the issue?
Who started the ball rolling? (Historical view)
Who is now involved? (Contemporary view)
Who will get involved? (Future view)

18. Probability-Impact Matrix
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Issues Management and Crisis Management
Ranking of Issues
Xerox Approach
High priority
Nice to know
Questionable
PPG Approach
Priority A
Priority B
Priority C
Probability-Impact Matrix
High
Medium
Low
Probability of Occurrence
Impact on Company

19. Filtering and Ranking of Issues
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Issues Management and Crisis Management
Filtering and Ranking of Issues
Figure 6-5

20. Ranking of Issues Five Filter Criteria Strategy Relevance
Chapter 6
Issues Management and Crisis Management
Ranking of Issues
Five Filter Criteria
Strategy
Relevance
Actionability
Criticality
Urgency

21. Other Issues-Ranking Techniques
Chapter 6
Issues Management and Crisis Management
Other Issues-Ranking Techniques
Polls / Surveys
Expert panels
Content analysis
Delphi Technique
Trend extrapolation
Scenario building
Use of precursor events or bellwethers

22. Formulation and Implementation of Responses
Chapter 6
Issues Management and Crisis Management
Formulation and Implementation of Responses
Formulation
The response design process
Implementation
The action design process
Plan clarity
Resources needed
Top management support
Organizational structure
Technical competence
Timing

23. Issues Development Process
Chapter 6
Issues Management and Crisis Management
Issues Development Process
Issues
Development Process
The growth process or life cycle of an issue

24. Issue Development Life Cycle Process
Chapter 6
Issues Management and Crisis Management
Issue Development Life Cycle Process
Figure 6-6

25. Issues Management in Practice
Chapter 6
Issues Management and Crisis Management
Issues Management in Practice
Companies that adopt issues management processes …
develop better overall reputations
develop better issue-specific reputations
perform better financially
Provides a bridge to crisis management

26. Chapter 6
Issues Management and Crisis Management
Crisis Management
To manage a crisis one first must understand that crises:
Occur abruptly
Cannot always be anticipated or forecast
May not occur within an issue category @

27. Crisis Management Basic Causes of a Business Crisis Acts of God
Chapter 6
Issues Management and Crisis Management
Crisis Management
Basic Causes of a Business Crisis
Acts of God
Mechanical problems
Human errors
Management decisions / indecisions

28. The Nature of Crises Crisis Definitions
Chapter 6
Issues Management and Crisis Management
The Nature of Crises
Crisis Definitions
A major, unpredictable event that has potentially negative results and its aftermath may significantly damage an organization and its employees, products, services, financial condition, and reputation.
A low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.

29. How a Crisis Should NOT be Handled
Chapter 6
Issues Management and Crisis Management
Crisis Management
How a Crisis Should NOT be Handled
Minimizing the issue
Stonewalling
Too little, too late
From Figure 6-7

30. Types of Crises Economic Physical Personnel Criminal Information
Chapter 6
Issues Management and Crisis Management
Types of Crises
Economic
Personnel
Physical
Criminal
Information
Reputational
Natural disasters

31. Outcomes of Major Crises
Chapter 6
Issues Management and Crisis Management
Types of Crises
Outcomes of Major Crises
Escalated in intensity
Subjected to media and government scrutiny
Interfered with normal business operations
Damaged the companies bottom line
Resulted in major power shifts

32. Crisis Management: Four Stages
Chapter 6
Issues Management and Crisis Management
Crisis Management: Four Stages
Prodromal Crisis Stage
Warning—precursor
Symptom —precrisis
Acute Crisis Stage
Point of no return
Crisis has occurred
Crisis Resolution Stage
Patient is well/ whole again
Chronic Crisis Stage
Lingering on—perhaps indefinitely; period of self-doubt; self-analysis
Learning
Figure 6-8

33. Pattern of a Poorly-Managed Crisis
Chapter 6
Issues Management and Crisis Management
Pattern of a Poorly-Managed Crisis
Early indications that trouble is brewing occur.
Warnings are ignored / played down.
Warnings build to a climax.
Pressure mounts.
Executives are often overwhelmed or can’t cope.
Quick-fix alternatives look appealing. Hasty moves create trouble.
Clamming-up versus opening-up options present themselves.
Most firms choose the former.
A siege mentality prevails.

34. Managing Business Crises
Chapter 6
Issues Management and Crisis Management
Managing Business Crises
Fink’s Three-Stage Model
Identifying the crisis
Isolating the crisis
Managing the crisis

35. Managing Business Crises
Chapter 6
Issues Management and Crisis Management
Managing Business Crises
BusinessWeek’s Five Steps in Managing Crises
Identify areas of vulnerability
Develop a plan for dealing with threats
Form crisis teams
Simulate crisis drills
Learn from experience

36. Managing Business Crises
Chapter 6
Issues Management and Crisis Management
Managing Business Crises
Monsanto’s 10R’s for Handling Public Policy Crises
Respond early
Recruit a credible spokesperson
Reply truthfully
Respect the opposition’s concerns
Revisit the issue with follow-up
Retreat early if it’s a loser
Redouble efforts early if it’s a critical company issue
Reply with visible top management
Refuse to press for what is not good public policy
Repeat the prior statement regularly

37. Managing Business Crises
Chapter 6
Issues Management and Crisis Management
Managing Business Crises
Augustine’s Six Stages of Crisis Management
Avoiding the crisis
Preparing to manage the crisis
Recognizing the crisis
Containing the crisis
Resolving the crisis
Profiting from the crisis

38. Crisis Communications
Chapter 6
Issues Management and Crisis Management
Crisis Communications
Identify crisis communication team
Identify key spokespersons
Train your spokespersons
Establish communications protocols
Identify and know the audience
Anticipate crises
Assess the crisis situation
Identify key messages to communicate
Decide on communication methods
Be prepared to ride out the storm

39. Components of Crisis Plans
Chapter 6
Issues Management and Crisis Management
Components of Crisis Plans
Media communications 99%
Employee communications 98%
Crisis management team 94%
Communications with elected officials 86%
CEO / senior executive involvement 82%
Documentation / written policy / handbook 81%
Website communications 77%

40. Be First, Be Right, Be Credible
Chapter 6
Issues Management and Crisis Management
Be First, Be Right, Be Credible
Be First
Be Credible
Be Right
Get message out first to control content and accuracy
Be open, honest, and speak with one consistent voice
Say and do the right thing

41. Benefits of Crisis Management
Chapter 6
Issues Management and Crisis Management
Benefits of Crisis Management
Fewer disruptions to every life for consumers, employees, and citizens
Preparing for one type of crisis may be beneficial when other types of crises strike

42. Key Terms Prodromal crisis stage Acute crisis stage
Chapter 6
Issues Management and Crisis Management
Key Terms
Prodromal crisis stage
Acute crisis stage
Chronic crisis stage
Crisis resolution stage
Crisis teams
Crisis communications
Ten steps of crisis communication
Being first
Being right
Being credible
Issues management
Crisis management
Portfolio approach
Issue
Emerging issue
Issues selling
Issues buying
Probability-impact matrix
Issues development process
Crisis