A review of 100 crises over the past 20 years, highlighting patterns that have emerged and their effects on businesses within a three-month window after the crisis becomes publicly known.
- Categories of crises:
- Accidents & Events; Cyber Security Breach; Financial Mismanagement; Individual Corruption; Market Collapse; Product Issues and Recalls; and, Media Driven Crises.
- Impact of Crisis:
- Crisis induced reputational damage can have significant, long-lasting impacts.
- This part of the document can be used to better understand the impacts of a crisis in the following areas:
- Existential damage; Share price; Media and Social media; A new (online) world.
- The Blame Game:
- Blame and the perception of culpability matters in a crisis.
- This section examines the relationship between how much a portion of blame can impact business share price.
- Also considered is the role the media can play in affecting levels of perceived culpability.
- Saying Sorry:
- This section examines whether a company should apologise in the event they are found culpable in a crisis.
- A quick apology is better than a slow one in terms of share price value.
- The financial case for making an apology also indicates making one, rather than not, is better by more than 2 to 1.
- Final thoughts:
- This report was designed to investigate the intuitions you may have about corporate crises. It confirms many pre-existing assumptions, but also provides insight as to how crises are responded to, these will help to sure up against newer, emergent crises.