Crisis to Avoid in a Business

Charrah Hardamon — Customer Success Strategist, Reflektive

Every business should plan properly to avoid problems. Business managers should follow contingency planning it means the development of alternative plans for use in case of problems arising within the organization or outside the organization. This type of planning allows a business to cope with a variety of crisis listed below.

Finance

In case of liquidity, large firms may have contingency funds set aside. Other solutions include finding an alternative fund to deal with a short-term lack of finance.

Production

A business must arrange alternative sources as a solution to interruptions in production. Some of the work may be handed over or outsourced to other producers. It may also be able to switch production from one machine or factory to another. Rearranging the time of production and dealing with a pool of suppliers can prove to be useful as well.

Human Resource Management

An effective consultation will help minimize difficulties and may speed up the solution to industrial relations problems. Similarly, motivational rewards may be used to deal with poor staff motivation. A flexible workforce comes in handy if the business is faced with a lack of employees as a result of high labor turnover.

Image

Faulty products or damage to the environment can have an enormous effect on the image of a business. A business must act quickly and effectively when faced with image problems. Faulty products must be withdrawn immediately. The management needs to focus on extensive promotion in an attempt to alleviate any public concern for its products. Practices such as recycling may be highlighted.

Management and communication

Management has a vital role to play in times of crisis. There must be strong leadership from the top of the company hierarchy and every member of the organization should be clear about his role and responsibilities. A business needs clear communication channels to ensure that messages are being passed on effectively. Contingency planning is important but the business must not let it affect the corporate plans. For example, keeping a larger amount in contingency fund may reduce the funds that a business has for investment or expansion. 

-Charrah Hardamon