Types of Crisis

Crisis refers to sudden unplanned events which cause major disturbances in the organization and trigger a feeling of fear and threat amongst the employees.

Following are the types of crisis:

1. Natural Crisis

   • Disturbances in the environment and nature lead to natural crisis.
   • Such events are generally beyond the control of human beings.
   • Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.

2. Technological Crisis

   • Technological crisis arises as a result of failure in technology. Problems in the overall systems lead to technological crisis.
   • Breakdown of machine, corrupted software and so on give rise to technological crisis.

3. Confrontation Crisis

   • Confrontation crises arise when employees fight amongst themselves. Individuals do not agree to each other and eventually depend on non productive acts like boycotts, strikes for indefinite periods and so on.
   • In such a type of crisis, employees disobey superiors; give them ultimatums and force them to accept their demands.
   • Internal disputes, ineffective communication and lack of coordination give rise to confrontation crisis.

4. Crisis of Malevolence

   • Organizations face crisis of malevolence when some notorious employees take the help of criminal activities and extreme steps to fulfill their demands.
   • Acts like kidnapping company’s officials, false rumours all lead to crisis of malevolence.

5. Crisis of Organizational Misdeeds

   • Crises of organizational misdeeds arise when management takes certain decisions knowing the harmful consequences of the same towards the stakeholders and external parties.
   • In such cases, superiors ignore the after effects of strategies and implement the same for quick results.

   Crisis of organizational misdeeds can be further classified into following three types:

   1. Crisis of Skewed Management Values

      • Crisis of Skewed Management Values arises when management supports short term growth and ignores broader issues.

   2. Crisis of Deception

      • Organizations face crisis of deception when management purposely tampers data and information.
      • Management makes fake promises and wrong commitments to the customers. Communicating wrong information about the organization and products lead to crisis of deception.

   3. Crisis of Management Misconduct

      • Organizations face crisis of management misconduct when management indulges in deliberate acts of illegality like accepting bribes, passing on confidential information and so on.

6. Crisis due to Workplace Violence

   • Such a type of crisis arises when employees are indulged in violent acts such as beating employees, superiors in the office premises itself.

7. Crisis Due to Rumours

   • Spreading false rumours about the organization and brand lead to crisis. Employees must not spread anything which would tarnish the image of their organization.

8. Bankruptcy

   • A crisis also arises when organizations fail to pay its creditors and other parties.
   • Lack of fund leads to crisis.

9. Crisis Due to Natural Factors

   • Disturbances in environment and nature such as hurricanes, volcanoes, storms, flood; droughts, earthquakes etc result in crisis.

10. Sudden Crisis

    • As the name suggests, such situations arise all of a sudden and on an extremely short notice.
    • Managers do not get warning signals and such a situation is in most cases beyond any one’s control.

11. Smoldering Crisis

    • Neglecting minor issues in the beginning lead to smoldering crisis later.
    • Managers often can foresee crisis but they should not ignore the same and wait for someone else to take action.
    • Warn the employees immediately to avoid such a situation.