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Latest crisis trends

By Kim Harrison,

Consultant, Author and Principal of www.cuttingedgepr.com

The Institute for Crisis Management has published an annual “crisis report” about news coverage of crises in the United States since 1990.

The Institute defines a business crisis as “any problem or disruption that triggers negative stakeholder reactions that could impact the organization’s financial strength and ability to do what it does.”

The Institute for Crisis Management is actually a private company – and the publication of its figures appears to be a device to get media coverage and to position the company as expert in the field; nevertheless, its information on crises is interesting.

ICM found that business crises were down slightly in 2007 compared with the two previous years.

While unexpected disasters happened, the big crisis that would eventually affect everyone – the sub-prime debacle – was building towards a climax in 2008. The sub-prime crisis is likely to cause problems across eight of the crisis categories shown below in the first table.

ICM figures show that on average in the past 10 years, around one third (35%)of all business and organizational crises occurred suddenly – fire, explosions, natural disasters, workplace violence etc.

Around 65% of crises were smoldering in origin. A smoldering crisis is a problem that starts out small and someone within the organization should recognize the potential for trouble and fix it before it becomes a public issue.

 

Crisis categories compared 1990-2007
% of total crises each year
Type 1990 2007
Catastrophes 5 7
Casualty accidents 5 7
Environmental 8 2
Class action lawsuits 2 9
Consumer activism 3 5
Defects and recalls 5 5
Discrimination 3 3
Executive dismissal 1 1
Financial damages 4 4
Hostile takeover 3 0
Labor disputes 10 9
Mismanagement 24 11
Sexual harassment 1 1
Whistle blowers 1 1
White collar crime 20 19
Workplace violence 4 15

 

In 2007 only three categories were higher than in the previous year: defects and recalls, workplace violence and class action lawsuits.

Most crisis-prone industries in 2007

(Ranked by number of entries in news coverage)

  1. Software makers

  2. Pharmaceutical companies

  3. Petroleum refining

  4. Natural gas companies

  5. Security brokers/dealers

  6. Banking

  7. Telecommunications

  8. Automobile manufacturing

  9. Airlines

  10. Computer manufacturers

Most crisis-prone businesses in 2007

(Ranked by number of entries in news coverage)

  1. Microsoft

  2. Quest

  3. General Motors

  4. Wal-Mart Stores

  5. Enron Corp

  6. Morgan Stanley

  7. Mattel, Inc.

  8. Hewlett-Packard

  9. Siemens AG

  10. Merrill Lynch

Source: www.crisisexperts.com

About the Author

Kim Harrison is a recognized authority in the public relations field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.

 

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