Crisis Management

Running head : Crisis management

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Crisis management

Introduction

Financial and health insurance crisis is a threat to the development of a country . Financial crisis results from loss of value of assets or institutions or assets while health insurance crisis occurs as a result of lack of health insurance cover of citizens of a country . Crises are usually difficult to predict and can cause devastating effects on an organization or nation . Every organization should have a response plan that will be used to

tackle crisis . Crisis has three characteristics that make it difficult to tackle it . The first characteristic of crisis is the short time that is needed to come up with a plan to counter it The second one is that crisis comes as a surprise , at the time when it is least expected . The third characteristic is the threat that crisis poses to the survival of the organization or country . Examples of financial and health insurance crises include inflation , loss of value of currency , recession and natural disasters

Risk assessment

Risk assessment is the identification of risks that have the potential to cause future financial crisis to an organization , and looks for possible ways of neutralizing them . Risk assessment also involves analyzing the measures that are currently being taken to reduce the impact of potential future threats to an organization and their effectiveness . Such threats may include rising inflation levels currency devaluation , poor performance in stock markets and future political instability

The benefit of risk assessment is formulation of a plan to counter these threats prior to their occurrence . This makes it easier for organizations to handle crisis and minimizes the level of panic among stakeholders in the organization . Panic results in stock markets having high stock volatility , due to fears by investors . It also helps identify appropriate controls and makes organizations appreciate benefits of risks

Emergency response plans

Since crises occur abruptly and the time to counter it is limited , it is important to come up with emergency response plans . Such plans explain the plan of action when crisis occurs and it is easier for employees or other stakeholders in a business to know how to react in such cases . Emergency response plans also help in coordination of efforts to control the crisis . This is due to use of command centers which are essential parts of emergency response plans

The use of emergency response plans enables people to know what to do in crisis situations and minimizes panic among stakeholders of the organization since people are able to make rational decisions as guided by the plans (Lewis , 2006

Command center

The command center is the central place in which crisis management efforts are coordinated . A functional command center should be able to perform functions that relate to crisis management . There are three basic functions of a command center , which illustrate its importance The first function is intelligence and communication . The command center should be able to gather intelligence and information about the...