In today’s world we many time hear that companies are facing the crisis which are mainly external in nature and it can affect in a very bad or adverse way to the company’s profitability and long term sustainability. In order to fight and overcome this crisis companies are using crisis management which is the main focus of this article.

CRISIS MANAGEMENT
It involves identifying crisis, planning a response to the crisis & conforming & resolving the crisis. Crisis management is applied in the entire field. In business there are three types of crisis.

1. Finance crisis:-
Short term liquidity or cash flow problems & long term bankruptcy problems.
2. Personal relations crisis: -
Negative publicity that could adversely affect the success of the company.
3. Strategic crisis: -
It is nothing but the changes in the business environment that questions the company’s viability.

SUGGESTED STEPS FOR CRISIS MANAGEMENT
Steps that can be followed by the company in crisis situation.
• Identify is there any crisis.
• Find out the intensity of the crisis.
• What are the possible remedies for the problems according to the intensity?
• Evaluate the remedies.
• Implement the best solution.
• Controlling.

Steps in Detail:
1. Identify is there any crisis:-
Crisis is in the form of decrease in sales not due to competitors or economic deprecation but due to any act or doing of the company, which threat to the goodwill of the company. One needs to identify it because sometime it happens that most of the problem you perceive as crises is not actually a crisis.

2. Find out the intensity of the crisis:-
The next step is to find out how much is the intensity of the crisis that is whether it is affecting to a small group of people, a nation or the whole community of the mankind.

3. What are the possible remedies for the problems according to the intensity:-
After finding the intensity we need to search for possible remedies to solve the problem. These remedies can be either in the form of monetary help or a mental help i.e. either one need to give the cash to the people whom they have affected, or give some of the promises such as surety of the job etc.
When the intensity of the crisis is too high i.e. if it is affecting to the larger part of society then the best option is to stop your product or services to be sold or delivered in the market, if the product/service has caused the crisis. The same strategy was used by Johnson & Johnson case. They recalled all the tablets of Tylenol and replaced it with new tablets.

4. Evaluate the remedies:-
One need to evaluate the remedies that is delivered, one need to check whether they are giving the proper solution or not and along with this one need to see that the solution is as per the effect of the problem and feasible.

5. Implement the best solution:-
There are many solutions of a single problem one need to identify the best solution and then try to implement it in an effective manner.

6. Controlling: -
After implementing one need to control it. Controlling it in such a way that it leads to act as a supporting hands to push the downfall of companies’ goodwill towards its growth. Controlling will also ensure fed back the learnings which will help in better handling the crisis next time.

CASE 1: THE REAL STORY OF JOHNSON & JOHNSON:
Let us see how Johnson & Johnson had handled the crises.
Crisis need not strike a company purely as a result of its own negligence or misadventure. Often, a situation is created which cannot be blamed on the company - but the company finds out pretty quickly that it takes a huge amount of blame if it fumbles the ball in its response.
One of the classic tales of how a company can get it right is that of Johnson & Johnson, and the company's response to the Tylenol poisoning.

What happened?
In 1982, Johnson & Johnson's Tylenol medication commanded 35 per cent of the US over-the-counter analgesic market - representing something like 15 per cent of the company's profits.
Unfortunately, at that point one individual succeeded in lacing the drug with cyanide. Seven people died as a result, and a widespread panic ensued about how widespread the contamination might be.

Immediate consequences of crisis
By the end of the episode, everyone knew that Tylenol was associated with the scare.
The company's market value fell by $1bn as a result. The cost was a high one. In addition
to the impact on the company's share price when the crisis first hit, the lost production
and destroyed goods as a result of the recall were considerable.

How company Handle the crisis?
The features that made Johnson & Johnson's handling of the crisis a success included the following:
They acted quickly, with complete openness about what had happened, and immediately sought to remove any source of danger based on the worst case scenario - not waiting for evidence to see whether the contamination might be more widespread Having acted quickly, they then sought to ensure that measures were taken which would prevent as far as possible a recurrence of the problem They showed themselves to be prepared to bear the short-term cost in the name of consumer safety. That more than anything else established a basis for trust with their customers.

Company acted quickly - ordering that Tylenol recalled from every outlet - not just those in the state where it had been tampered with. Not only that, but the company decided the product would not be re-established on the shelves until something had been done to provide better product protection.
As a result, Johnson & Johnson developed the tamperproof packaging that would make it much more difficult for a similar incident to occur in future.

After Crisis story:
However, the company won praise for its quick and appropriate action. Having sidestepped the position others have found themselves in - of having been slow to act in the face of consumer concern - they achieved the status of consumer champion.

Within five months of the disaster, the company had recovered 70% of its market share for the drug - and the fact this went on to improve over time showed that the company had succeeded in preserving the long term value of the brand. Companies such as Perrier, who had been criticized for less, adopt handling of a crisis, found their reputation damaged for as long as five years after an incident.

In fact, there is some evidence that it was rewarded by consumers who were so reassured by the steps taken that they switched from other painkillers to Tylenol.

CASE 2: THE REAL STORY OF INTEL PENTIUM CHIP:
1. On Jan 13, 1994 Dr. Thomas Nicely a mathematician of Lynehburg collage found errors in result given by his PC while doing advance mathematician computations.

2. Further investigation revealed that the floating-point unit (FPU) of the Pentium chip was the culprit.

3. Similar test done by other individuals on insistence by Dr. Nicely replicated the findings.

4. By then Intel had shipped 2 million defective chips and the sales of the defective chips continued.

5. Intel responded saying that the average user could never see the error. It agreed that some very advanced applications might be affected and offered to work with such persons to resolve the problem.

6. Chairman Andrew Grove told customers that Intel would work on individual basis for all users in heavy-duty scientific calculations. He added that if necessary replacements may be offered.

7. Intel said that Pentium bug would affect only spreadsheet while doing operation and the maximum error would be .006%.

8. On Dec. 12, 1994. IBM announced shipping suspension of IBM PCs containing Pentium chips.

9. Intel argued that a chance of error occurring is 27000 yrs. But IBM responded saying that it would be one in 24 hr as well.

10. IBM also stated that it would replace chips in IBM PCs free of cost.

11. Thousand of request started to pour in for Intel Pentium replacements. Many lawsuits were filed.

12. On Dec. 20, 1994, Andrew Grove apologized publicity for any arrogance and agreed to replace all defective chips free of cost.

13. Intel reported that in its fourth-quarter profit declined 37% due to a $475 million pretax charge taken for the replacement of the flawed Pentium chips.

14. The company also said that consumer purchases of Pentium computers had never slowed despite two months of negative publicity.

HOW TO HANDLE CRISIS EFFECTIVELY?
Following things can be taken into consideration by companies while handling
management crisis:
- Handling situations in which public awareness of a particular issue may dramatically and negatively impact the company's ability to achieve its goals.
- Respond quickly, do not delay; the longer you delay the worst the crises becomes.
- Show empathy and care when it is adversely affecting human lives.
- Don't be defensive or challenging: you'll only fight a losing battle and waste valuable time. Just as shown in the example of intel case.
- Detail action steps are essential to avoid similar occurrences in the future.
- Be prepared; even rehearsed, so that you can handle it effectively at minimum cost.
- Spare the budget for crisis as precautionary measure.

CONCLUSION
In today’s fast growing business environment, the companies need to make its goodwill in the market. So in order to do this they are taking at most care with their every business activity which are crucial for their success. Therefore in order to handle any crisis the companies are giving more emphasise on this important concept and started framing the management crisis team- which work, starts its function when the situation of crisis arisis in the company with well thought of plans. We can say that the days are not far enough when management crisis term would be considered as important as all other basic functions in the organizations.

SOURCES:
http://www.mallenbaker.net/csr/CSRfiles/crisis02.html
http://en.wikipedia.org/wiki/Crisis_management
Business ethics – A global and managerial perspective (second edition), By David J. Fritzsche, TMH, Delhi.