26 Oct Understanding Crisis Management and Risks Crisis management, an important planning process, reached global importance with the industrial and environmental disasters of the 1980s. A crisis
Understanding Crisis Management and Risks
Crisis management, an important planning process, reached global importance with the industrial and environmental disasters of the 1980s. A crisis is a threat to the organization, includes an element of surprise, and requires the organization to respond in a short period of time. Even though there is an element of surprise, organizations can prepare for some measure of risk. Managing crises and risks are more relevant today as businesses deal with protecting data, utilizing ethical supply chains, manage cross-cultural communications, focus on producing safe products, and evaluate how to forestall man-made environmental disasters. COVID-19 is a crisis facing businesses, governments, and societies across the globe. Consider COVID-19 and the impact on businesses.Be sure that you accurately answer/cover the following in your analysis:
- Research the impact of COVID-19 on business organizations in Saudi Arabia.
- From your research, what have been successful and unsuccessful examples of crisis management?
- What knowledge have you gained from your crisis management research that might be useful when considering ethical scandals?
You should meet the following requirements:
- Be 3-4 pages in length, which does not include the title page, abstract, or required reference page, which are never a part of the minimum content requirements.
- Use APA style guidelines.
- Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles.
Required
- Chapter 6 in Business & Society: Ethics, Sustainability & Stakeholder Management
- Amoiradis, C & Stankova, M. (Mar 2020) The systemic crisis and the need for sustainability: An overview. Management Research and Practice, 12(1), 15-26. .
Recommended
- Module 9, Chapter 6 PowerPoint slides
- Module 9, Chapter 9 PowerPoint slides
- Martin, K., Shilton, K., Smith, J. (2019). a target="_blank" href="https://search.proquest.com/docview/2239442216?accountid=142908">Business and the ethical implications of technology: Introduction to the symposium. Journal of Business Ethics, 1-11.
- Mittelstadt, B. (2019). AI ethics – Too principled to fail? Author. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3391293
Business & Society Ethics, Sustainability & Stakeholder Management 10th Edition
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Chapter 9 Business Ethics and Technology
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Learning Outcomes (1 of 2)
Identify and describe what the new world of Big Data is all about and the implications it holds for business.
Explain how social media have changed the world of business and technology.
Discuss how surveillance is a new dimension to being a consumer and an employee and what its implications are for stakeholders.
Articulate an understanding of technology and the technological environment.
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Learning Outcomes (2 of 2)
Identify the characteristics of technology to include their benefits, side effects, and challenges in business.
Comment on the relationship between technology and ethics.
Define information technology and discuss the issues relating to e-commerce in business.
Define biotechnology. Identify the ethical issues involved in genetic engineering and genetically modified organisms (GMOs).
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Chapter Outline
The New World of Big Data
Technology and The Technological Environment
Characteristics of Technology
Technology and Ethics
Information Technology
Biotechnology
Summary
Key Terms
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Business Ethics & Technology
We live in an age dominated by advancing technology. Each new generation experiences technological advances that were not seen by previous generations.
The new generation of young people is called the iGeneration. Technology is part of their DNA, and they have no “off-switch.”
Technology is at the core of most businesses, but it is a two-edged sword.
Despite many positive advances, there are new problems and challenges.
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The New World of Big Data (1 of 2)
Big Data –
the tons of information that are out there and how businesses are striving to put it to work.
More information from more sources than ever before.
Businesses can access it as quickly as it’s generated.
Advantages of Big Data accompanied by new issues: data security, privacy, cybercrime.
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The New World of Big Data (2 of 2)
Social Media –
Cutting edge of business communication based on technology
Has a dark side where social and ethical issues arise.
Unfair reviews and how they respond to them are a constant challenge
Places more emphasis on instantaneous rather than accurate information
Surveillance –
Monitor customers’ and employees’ actions
For good, but possible abuses
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Technology and the Technological Environment
Technology –
The totality of the means employed to provide objects necessary for human sustenance and comfort.
A scientific method used to achieve a practical purpose.
Technological environment –
The total set of technology-based advancements or progress taking place in society.
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Characteristics of Technology
Benefits of Technology –
Increased production of goods and services
Reduced amount of labor needed to produce goods and services
Made labor easier and safer
Results in a higher standard of living
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Costs of Technology –
Technology has some unanticipated side effects:
Environmental pollution
Depletion of natural resources
Technological unemployment
Creation of unsatisfying jobs
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Challenges of Technology –
Data amnesia – forgetfulness from outsourcing from brains to digital devices.
Google Effect – knowing that information is easily accessible on the Internet, we are less likely to remember it.
Communications technology affects our brains, nervous systems, social abilities, relationships, mental health, physical health, and family structures.
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Technology and Ethics
Our perspective is to raise ethical questions that may be related to business development, and the use of technology.
Two Key Issues –
Technological determinism –
The idea that what can be developed will be developed.
Ethical lag –
Occurs when the speed of technological change far exceeds that of ethical development.
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Information Technology
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E-Commerce as a Pervasive Technology
Electronic Commerce –
Also called e-commerce, e-business, or Web-based marketing.
The Internet has reshaped the way business is conducted.
Online Scams – con artists are using the Internet to scam the unwary; including fake check scams, free gifts, phishing, Nigerian money offers, credit card fraud, travel scams, pyramid schemes, and investment opportunities.
Ongoing Issues in E-Commerce Ethics –
Access
Intellectual property
Privacy and informed consent
Protection of children
Security of information
Trust
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Invasion of Consumer Privacy via E-Commerce
Cookies –
Identification tags that websites drop on our personal-computer hard drives so they can recognize repeat visitors the next time we visit their Web sites.
Spam –
Unsolicited commercial e-mail. It is sent through "open-relays" to millions of persons.
Identity Theft –
Tampering with one’s financial accounts.
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Figure 9-1
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Government’s Involvement in Consumer Privacy Protection
Government is involved in consumer privacy, many think it is not doing enough.
In 2012 the White House issued a proposed a
Consumer Privacy Bill of Rights though it has not been adopted into law.
Individual Control
Transparency
Respect for Context
Security
Access and Accuracy
Focused Collection
Accountability
A proposed Consumer Privacy Protection Act of 2015 was still in committee.
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Business Initiatives with Consumer Privacy Protection
Ethical leadership
Privacy policies
Chief privacy officers
Data security
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Questionable Businesses and Practices
Made possible by electronic commerce and the use of the Internet.
Three business categories viewed as questionable:
Web-based pornography
Internet gambling
Web-based downloading of music, movies, books, and other copyrighted digital material
Illegal Downloading – represents theft of intellectual property
Monitoring Technology – raises questions when companies use technology to monitor consumers as they use a company’s products.
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The Workplace and Computer Technology (1 of 2)
Biometrics – the use of body measurements, like eye scans, fingerprints, or palm prints for determining and confirming identity
Robotics – use of industrial robots could double by 2018. People worry they will lose their jobs to robotics technology.
Artificial Intelligence – embraces software technologies that make a computer or robot perform equal to or better than normal human ability in accuracy, capacity, and speed.
Cell Phones and Texting – use of company phones, or using phones for business while driving is a business ethics topic.
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The Workplace and Computer Technology (2 of 2)
Unethical Actions by Employees
Created a potentially dangerous situation by using new technology while driving
Wrongly blamed an error the employee made on a technological glitch
Copied the company’s software for home use
Used office equipment to shop on the Internet for personal reasons
Used office equipment to network/search for another job
Accessed private computer files without permission
Used new technologies to intrude on coworkers’ privacy
Visited porn websites using office equipment
Company Actions – management should clearly define guidelines for ethical computer use by employees.
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Ten Commandments of Computer Ethics
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Biotechnology
Biotechnology –
Involves using biology to discover, develop, manufacture, market, and sell products and services. Biotechnology is striving to heal, fuel, and feed the world.
Bioethics –
A field that deals with the ethical issues embedded in the commercial use of biotechnology.
Proceduralism is the primary tool for bioethicists. It is using protocols to ensure that classical safeguards are not violated.
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Realms of Biotechnology
Genetic Engineering
Genetically Modified Foods
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Genetic Engineering
Stem cell research
Cloning
Cloning Animals for Food
Genetic testing and profiling
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Genetically Modified Organisms (GMOs)
Also referred to as genetically engineered organisms (GEOs)
Fear over health and environmental effects; critics call them “Frankenfoods.”
Many U.S. crops are genetically modified:
Sugar beets (95%)
Soybeans (91%)
Cotton (88%)
Corn (85%)
Most Americans consume genetically modified organisms every day.
© 2018 Cengage
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Labeling of GMOs –
Safety of GMOs is not in question, according to scientific research.
But one of the most frequently discussed issues with GMOs is labeling.
FDA does not mandate GMO labeling in the U.S.
The Non-GMO Project believes that people have the right to make informed choices about whether they consume GMO products.
© 2018 Cengage
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Key Terms
Artificial intelligence
Big Data
bioethics
biometrics
Biotechnology
botnets
botnet scam
chief privacy officer
cloning
Cookies
Digital amnesia
electronic commerce
embryonic stems cells
ethical lag
genetic engineering
genetic profiling
genetic testing
genetically modified foods (GMFs)
Genetically modified organisms (GMOs)
Google effect
Information technology
identity theft
online scams
phishing
Spam
technoethics
technological determinism
technological environment
technology
therapeutic cloning
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Business & Society Ethics, Sustainability & Stakeholder Management 10th Edition
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Chapter 6 Issue, Risk and Crisis Management
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Learning Outcomes
Distinguish between risk management, issue management, and crisis management.
Describe the major categories of risk and some of the factors that have characterized risk management in actual practice.
Define issue management and the stages in the issue management process.
Define crisis management and identify four crisis stages.
List and discuss the major stages or steps involved in managing business crises.
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Chapter Outline
The Relationship Between Risk, Issue, and Crisis Management
Risk Management
Issue Management
Crisis Management
Summary
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Risk, Issue & Crisis Management
With little government oversight, the consumer is forced to rely on businesses to act responsibly.
But such tragedies, and the financial scandals of many corporations, continue to erode consumer trust in businesses.
Major external social events not caused by business also affect businesses, and firms must prepare to deal with them.
No company is immune to the threat of a crisis, but few prepare.
Managerial decision-making processes should include Risk Management, Issue Management, and Crisis Management.
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Relationships Between Risk, Issue, and Crisis Management (1 of 2)
Differentiating between these 3 is difficult. Many product managers cannot differentiate between “risks” and “issues,” which has led them to be labeled the Siamese twins of public relations.
The Issue Management Council definitions:
Issue – a gap between a firm’s actions and stakeholder expectations
Risk – a potential issue that may or may not occur
Crisis – an issue that has escalated to a critical state
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Relationships Between Risk, Issue, and Crisis Management (2 of 2)
Goal: To be effective, risk, issue and crisis management must close the gap between the firm’s situation and its stakeholders’ expectations.
Many of the crises firms face today arise out of issue categories they are monitoring and prioritizing through issue management systems.
Risk Management may keep issues from arising
Effective issue management may enable the firm to avoid a crisis, or minimize its impact, and is vital to post-crisis management.
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Risk Management (1 of 2)
Risk management concerns potential issues; it addresses an issue that has not yet occurred, and tries to keep the issue from arising.
A “rules” approach to risk management can help prevent internal risks, but not those that stem from firm strategy or risks in the external environment.
Example: In 2007, Tony Hayward, new CEO of British Petroleum (BP) promised to make safety his priority. His new rules required that employees not text while driving, and that they use lids on their coffee cups while walking. Of course, those rules did not prevent the Deepwater Horizon from exploding three years later.
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Risk Management (2 of 2)
A new framework for Risk management divides it into three categories:
Preventable risks – internal risks that offer no strategic benefit (BP’s coffee lids)
Strategic risks – risks taken to achieve greater returns (BP’s deep drilling)
External risks – external risks that cannot be controlled (natural disasters and economic shocks)
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Risk Management & Sustainability
Sustainability involves living in the present in a way that does not compromise the future.
Risk Management involves taking action today that will mitigate or prevent a problem that could arise in the future.
Both are concerned with the future consequences of present-day actions.
Risk-shifting may damage the sustainability of others.
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Issue Management –
is a process by which organizations:
identify issues in the stakeholder environment,
analyze and prioritize them in terms of their relevance to the organization,
plan responses to the issues, and then
evaluate and monitor the results.
It is helpful to think of issue management in connection with sustainable strategic management process, enterprise-level strategy, corporate public policy, and integrated reporting.
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Fig 6-1
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Portfolio Approach –
Experience with prior issues likely influences future issues
Provides focus and coherence to the firm’s dealing with the mix of issues it faces
Failure to adopt certain issues into the portfolio does not signal neglect, but is part of a rational process of issue management in which strategic priorities are vital
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Issue Definition –
A gap between what stakeholders expect and what the firm is doing.
The gap typically involves debate, controversy, or differences of opinion that must be resolved.
At some point, the organization must make a decision on the matter, but that does not mean the issue is resolved.
Once an issue becomes public, its resolution becomes increasingly more difficult.
Issues are ongoing, and require ongoing responses.
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Emerging Issues –
Characteristics of an emerging issue –
The terms of the debate are not clearly defined.
The issue deals with matters of conflicting values and interest.
The issue does not lend itself to automatic resolution by expert knowledge.
Issue is often stated in value-laden terms.
Trade-offs are inherent.
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Issues Management Process-
Issues can be identified earlier, more completely, and more reliably.
Early anticipation:
Widens the range of options.
Permits study and understanding of the full range of issues.
Permits organization to develop a positive orientation towards the issues.
The organization will have earlier identification of the stakeholders.
The organization will be able to supply information to influential publics earlier and more positively, creating better understanding.
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Model of Issues Management Process
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Identification of Issues (1 of 2)
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Identification of Issues (2 of 2)
Five Leading forces as predictors of social change:
Events
Authorities or advocates
Literature
Organizations
Political jurisdictions
If these five forces are monitored closely, impending social change can be identified, and sometimes predicted.
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Examples of Forces Leading Social Change
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Issue Selling and Buying
Issue selling –
Relates to middle managers exerting upward influence in organizations as they try to attract the attention of top managers.
Issue buying –
Top managers adopt a more open mind-set for the issues that matter to their subordinates.
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Analysis of Issues –
Who (which stakeholder) is affected by the issue?
Who has an interest in the issue?
Who is in a position to exert influence?
Who has expressed opinions on the issue?
Who ought to care about the issue?
To help with issue analysis:
Who started the ball rolling? (Historical view)
Who is now involved? (Contemporary view)
Who will get involved? (Future view)
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Ranking or Prioritization of Issues
Two essential questions –
How likely is the issue to affect the organization?
How much impact will the issue have?
Once these questions are answered, it is necessary to prioritize them as to their importance or relevance to the organization.
Those listed at the top will receive the most attention and resources; those at the bottom may be removed from consideration.
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Other Issues: Ranking Techniques
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Formulation and Implementation of Response
Formulation –
The response design process.
Implementation –
The action design process.
Clarity of the plan
Resources needed to implement the plan
Top management support
Organizational structure
Technical competence
Timing
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Evaluation, Monitoring, and Control
Companies should continually evaluate the results of their responses to issues.
Ensure that actions are kept on track.
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