Effective leadership response strategies to internal and external crises: An evidence based research synthesis

How do crisis type and response strategy interact to produce a successful post-crisis outcome for an organization?Effective Leadership Response Strategies to internal and external crises: An Evidence Based Research Synthesis The Problem for Organizational Leaders Due to the potential of a crisis to completely destroy an organization, leaders must have the knowledge of the impact that the type of crisis has on a response strategy that leads to organizational survival. Such knowledge will provide organizational leaders with guidance of those leadership response strategies that interact with a specific crisis type to produce a successful outcome. Conceptual Framework Organizational crises are unexpected, develop quickly and require a leadership response in the absence of a significant amount of time for research and analysis. While the probability of a crisis occurring is small, if managed poorly, it can threaten the very existence of an organization. A successful response strategy includes corporate stance, communication to stakeholders and action/reparation. It is critical for an organization’s survival that the correct leadership response, given a crisis type be initiated quickly. Implications for Practice Ann Marie Kaczorowski The Graduate School University of Maryland University College, Adelphi, MD Crisis Typology Research Question How do crisis type and response strategy interact to produce a successful post-crisis outcome for an organization? Method and Inclusion/Exclusion Criteria Results Some factors of leadership response are critical, regardless of crisis type: • Proactive communication with stakeholders is critical in any leadership response to crisis, along with monitoring media content and providing clarifications and corrections • Communications made by the leader must be aligned with the organizational stance, or can further exacerbate the crises However, stakeholder expectations of leadership response to crises are different for internal and external crises: • Accepting responsibility and taking remedial actions/reparations meet stakeholder interests after internal crises • Denying responsibility (provided that is the truth), while attempting to alleviate doubt about the future meet stakeholder interests after external crises O Stakeholders: Employees, customers, suppliers, regulators, victims, media Product Recall Factory Accident Computer Hacking Employee Lawsuit Internal Crisis and Internal Environment Stakeholders: Media, government, emergency workers, infrastructure availability, public citizens, special interest groups External Crisis and External Environment Natural Disaster War and Terrorism Financial Crisis Regulation Litigation Internal Crisis External Crisis Interaction Successful Outcome Corporate Stance • Apologetic/Denial • Victim status Communication • Open/Non-existent • Stakeholders Action/Reparation • Clean-up/ Replacement • Victim compensation The type of crisis faced by an organization is important to distinguish, as the delineation of the source of the crisis as internal or external can have an impact on stakeholder views and acceptance of the organization’s response. Significant Literature Pearson and Clair (1998) define an organizational crisis as “a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect and means of resolution”, where decisions must be made swiftly. James and Wooten (2005) assert that leadership response is especially significant as it is often not the crisis itself, but the mishandling of the crisis that can have major consequences for the organization. Pearson and Mitroff (1993) make the distinction between human-induced crises and natural disasters, where they note that public perception is often more negative in human-induced crises than in natural disasters, where organizations have very little control. Coombs & Holladay (1996) provide that the characteristics of the crisis situation should suggest to the crisis manager, the best response strategy or strategies to fit the situation. UMUC One Source Database Other sources of Literature identified Non-duplicate sources screened for exclusions Exclusions: government/military crises, non-profits and first responders, medical crises, and financial crises Review of abstracts Articles retrieved – apply assessment criteria Inclusions: articles pertaining actual crisis case studies (qualitative) or multiple case study analyses (qualitative or quantitative) Exclusions: articles not pertaining to leadership response Articles included in synthesis Review of articl