Corporate Crisis Examples

A corporate crisis is defined as an event, situation, or public initiative that threatens a company’s ability to operate its business effectively. A crisis can escalate into a disaster or long-term impediment to business growth if not handled with efficiency and sensitivity to all involved. Crises often begin at the local level but can affect a company nationwide. Recovery from a corporate crisis requires preparing for different scenarios, from cybersecurity attacks to employee criminal acts.

Your crisis communications plan should include preparation for the scenarios that are most likely to affect your company, such as:

Natural Disasters. While natural disasters are not under any company’s control, they can cause issues with a brand’s perceived ability to serve customers and stakeholders. Disasters that cause you to cease or limit operations will hurt partners and consumers, who may choose to replace your services. While you can’t prevent a natural disaster, you can prepare with crisis scenario drills.

Environmental Issues. Environmental concerns continue to grow in importance to consumers.  As a result, many companies have started implementing “green” practices sustainably. However, for companies that deal with sensitive environmental issues such as pipeline construction, wetlands mitigation, energy, hazardous materials, and others, the public demands transparency, especially when something goes wrong.

Cybersecurity. Cybersecurity breaches and hacks are a significant threat to all businesses. Hacks scare customers, put them in danger of identity theft, and jeopardize proprietary information security. You can work to prevent cybersecurity threats, but you can never guarantee that they won’t happen. Even multi-national companies are at risk. Every corporation needs a crisis management plan for cybersecurity, including instructions for employees, customers, and shareholders if a cyber-attack occurs.

Product Recalls. Product recalls or defects can damage a company’s reputation for years. You should have a crisis communications plan in place if a problem ever arises. Sales of your particular product will undoubtedly decrease during a product recall, but sales in other product lines may also suffer if your brand’s reputation is compromised. Prevention and communication are vital to rebuilding brand trust.

Employee Misconduct. People are the core of every company. They are the element that interacts, build relationships, and promotes trust with your brand. An individual employee can brighten a customer’s day, or they can ruin a company’s reputation. If an employee violates company policy or the law or represents the company with ill intent, you need to act upon it immediately. Employee crises could involve theft from the company or customers, the tampering of confidential information, public outburst by an employee, or other acts of employee misconduct that attracts poor publicity.

Conflict with Interest Groups. Conflict can arise from political, environmental, social, and cultural interest groups who feel threatened by your company’s initiatives. This can put your company in a bad light when fighting against a group that seems to have good intentions. Rather than ignoring or battling with these interest groups, show the community you care by working on a solution. You may not agree with the interest groups’ ideas or initiatives, but they are members of your community and, therefore, stakeholders whose concerns should be addressed.