★ Must-know
Crisis is a “when,” not an “if,” because 69% of leaders had already faced a major organizational crisis in the previous five years and large companies averaged roughly one crisis per year. — PwC Global Crisis Survey, 2019
The Wells Fargo fake-accounts scandal resulted from internal sales-target pressure, was discovered in 2016, and led to a $3 billion federal settlement in 2020.
The course develops the ability to: identify major social, economic, and technological crises, assess situations and build crisis-management plans, evaluate how technology and culture shape crises, communicate effectively in crisis contexts, recognize behavioral and well-being challenges of crisis leadership
Further detail
Crisis management is about when, not if.
★ Must-know
The final grade is divided into:
The plan is graded according to: use of course concepts: 13 points, clarity, feasibility, structure, and attention to detail: 5 points, creativity: 2 points
📌 An unjustified absence results in a zero for that day's participation grade, and missing the final group presentation without justified cause lowers the grade for both the absent student and the group.
Further detail
📌 Generative AI may not be used in class deliverables unless the instructor explicitly states otherwise.
P-E-G: Participation, Exams, Group work.
★ Must-know
Further detail
📌 Each teammate must be assigned a role at least once, and the team must justify every choice in at least one spoken sentence.
Reflect → assign roles → present.
★ Must-know
📌 A case is classified as a crisis when it fits one or more crisis types, whereas a routine, planned, or normally tolerated event is classified as not a crisis.
Further detail
Crisis versus routine, planned, or tolerated events.
★ Must-know
Further detail
F-I-P-H-R-V: Financial, Informational, Property, Human resources, Reputational, Violent behavior.
★ Must-know
The crisis timeline has three phases: pre-crisis, crisis event, and post-crisis.
During the pre-crisis phase, threats grow, warning signs may appear, and organizations prepare for and prevent crises.
During the crisis event, the majority of the damage occurs and the organization must respond while the situation is unfolding.
During the post-crisis phase, some order is re-established, explanations are investigated, and the organization learns from what went wrong.
Further detail
Pre-crisis → crisis event → post-crisis.
★ Must-know
The remaining sessions cover:
The semester-long crisis-management plan is built progressively across sessions for an organization selected by each team.
The final group presentation requires each team to explain how it would manage the crisis facing its chosen organization and forms the culmination of the crisis-management plan.
Further detail
📌 Before the next class, teams must review the final group-project folder and choose an organization, with each team working on a different organization on a first-come, first-served basis.
Preparedness → vulnerability → uncertainty → leadership → culture → technology → learning → planning.
Six Crisis Types
| Type | What it threatens or involves | Course example |
|---|---|---|
| Financial | Money, solvency, stock price, or market access | Lehman Brothers bankruptcy, 2008 |
| Informational | Critical information or trust in it | Equifax hack, 2017 |
| Destruction of property | Facilities, assets, or infrastructure | Deepwater Horizon explosion, 2010 |
| Human resources | People inside the organization | Uber workplace scandal, 2017 |
| Reputational | Public trust or organizational image | Volkswagen emissions cheating, 2015 |
| Violent behavior | Physical violence involving employees, customers, or outsiders | Charlie Hebdo attack, 2015 |
Test your knowledge on Crisis Management Foundations with 18 multiple-choice questions with detailed corrections.
1. Regarding organizational crisis exposure, select the accurate statements:
2. Which statements accurately describe the Wells Fargo fake-accounts scandal?
Memorize the key concepts of Crisis Management Foundations with 53 interactive flashcards.
Why is crisis considered a 'when' rather than an 'if' for organizations?
Because 69% of leaders faced a major crisis in the past five years and large companies average one crisis per year.
What caused the Wells Fargo fake-accounts scandal?
Internal sales-target pressure.
When was the Wells Fargo fake-accounts scandal discovered?
In 2016.
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