5 Types of Crisis Your Company Could Face
Nobody can ever plan their mistakes and nobody would like that too. But mistakes just happen like that. They often happen at the worst times possible. Many of us want to quickly fix our things as soon as possible, but when you are running a business, it gets messier if not resolved or noticed at the time. Small mistakes can end up being a hugely costly endeavor. So what are the types of crisis your company could face?
Following are a few crises that you may face while running a company hence you better stay aware of them.
1. Financial Crisis
A financial crisis happens when some business loses value in its assets and then the company gets unable to pay off the debts. Mostly this is due to a significant decrease in the demand for a product or a service. In such cases, the company should move funds around to quickly cover the short-term costs.
Then, they will have to reanalyze their revenue sources to have a look for some new ways to gather up long-term income and also to increase the margins.
2. Personnel Crisis
This kind of crisis happens when an employee who is linked to the company is involved in any illegal or unethical misconduct. Whether it is in the workplace or the employee’s personal life, such situations can result in a very bad backlash against the company.
Since an organization supported and had employed these personnel, their lack of judgment is often showed on the company’s reputation.
In such cases, you will have to identify the scope that this situation has got, and also determine any proper action. You can also give a verbal or written statement for it.
3. Organizational Crisis
Organizational crises are the times where the company has greatly wronged its clients or customers. Rather than having a mutually beneficial relationship, such businesses use their customers as a source of benefitting the business. This kind of crisis includes certain misconduct such as holding the information, exploiting the customers, and also misusing the managerial powers.
Changing the company culture is the ideal way to address such a crisis.
4. Technological crisis
In the world of tech-driven businesses, there is a huge number of businesses that rely on technology to carry out their daily functions. So when this technology crashes down, they have a lot to worry about than only a few missing emails. Ecommerce sites and software companies may lose millions of potential leads if the servers they have in use suddenly break off.
That is not only a big loss of the revenue that may have generated but is also a huge hit to the service or product reputation.
5. Natural Crisis
If a sudden earthquake destroys your office, you can call it a crisis as well. while it can happen very rarely, such natural disasters can greatly impact your business. If your company is at a place that is greatly exposed to extreme weather, you will have to prepare an emergency response to deal with such events.
These were the types of crises your company could face. You will have to be ready to face such a crisis and should bring in reforms even before you face such things.