Risk Management: Crisis Management and Business Continuity Plan

This report delves into the critical aspects of risk management, focusing on organizational vulnerabilities, crisis management strategies, and business continuity planning. It begins by identifying various vulnerabilities, including those related to personnel, physical security, and system development. The report then explores different approaches to crisis management, such as the situational crisis communication theory and issue management, along with tactical approaches. It also discusses business continuity planning, including the 'fear approach' and the use of frameworks. A case study of Pepsi's crisis management in 1913 is presented to illustrate how a company can effectively handle a crisis. The report concludes with a list of references, including books and journals, to provide further resources for understanding these concepts.

Risk Management

3.1 Vulnerability of organisation to break
continuity
 Some circumstance which can break continuity of business process are :
 these vulnerabilities can be due to various security issues which can be categorized as
personal security, physical and environmental security, system development and
maintenance etc.
 Physical security
 Insufficient trained personnel
 lack of security awareness
 Use of outdated or poor software
 Inadequate recruitment process

3.2 Approaches to crisis management and business
continuity planning
 The situational crisis communication theory : the main idea behind this is that the
company should react strategically to the crisis situation. This theory is audience
oriented theory.
 Second is Issue management theory : the capacity to understand coordinate, direct and
policy making functions, and all public relation skills etc.
 Tactical approach : According to this approach helps in analysing that what steps
needed to be taken in order to avoid crisis.

Approaches for business continuity plan are :
 Fear approach : this approach motivates the company by considering the horrible
events which has taken in past.
 This fear approach will help company to get the people's interest and attention. A
company can use this approach for upcoming audits in order to find motivation.
 Framework : Framework approach refers to creation of various policies, milestones and
schedules in order to create a instruction document which helps in planning and testing.
 Such type of approach will help company to improve long term participation by
people's of the organisation.
 Reinforce & Support : The purpose this approach is to empower the planner. Once the
planner has been decided the company should try to remove any type of barrier in
planning.

M1 case which show how organisation can manage
crisis
 A company should be efficient in order to manage crisis so that organisation can work
successfully. For example in the case of Pepsi. The company has faced crisis in year 1913
as it was claimed that syringes are found in the cans of diet Pepsi. The company has urged
to various supermarkets and stores to not remove their cans from stores.
 After the investigation of case the company was found in default. The company has
decided to launch its first video in which production process was shown thus claiming that
no such practice is possible in the company. Second video show the culprit was arrested.
 The company has worked with FDA during the time of crisis. Which has helped to make
the communication effective. After all the blame has been removed from company a
campaign was held in order to thank the public.
 As in the case it has been shown that how a company deal with crisis. Similarly equitable
funding can also manage risk

References
Books and Journals
 Fearn-Banks, K., 2016. Crisis communications: A casebook approach. Routledge.
 Froot, K.A. and Stein, J.C., 1998. Risk management, capital budgeting, and capital
structure policy for financial institutions: an integrated approach. Journal of financial
economics, 47(1). pp.55-82.
 Froot, K.A., Scharfstein, D.S. and Stein, J.C., 1993. Risk management: Coordinating
corporate investment and financing policies. the Journal of Finance, 48(5). pp.