Business Crisis and Continuity Management (BCCM) Class Session 18

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Business Crisis and Continuity Management
(BCCM)Class Session 18
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Crisis Characteristics

• Threats to major values.
• Time urgency.
• Ambiguity or uncertainty.
• Surprise or uniqueness.

Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers, in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Page 472.
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CRISIS SITUATIONS AND INFORMATION MANAGEMENT

• Crisis situations are novel, unstructured and
  outside of an organizations or individuals
  typical operating framework
• Crises require nonprogrammed decision responses
• Crises are highly uncertain and complex
  situations
• Crises are characterized by an overload of
  incomplete, conflicting information
• The process of perceiving, selecting, and
  processing this information is critical to
  effective crisis management

Source Reilly, A.H. 1993. Preparing for the
Worst The Process of Effective Crisis
Management. Industrial and Environmental
Quarterly. Vol. 7, No. 2. Page 118.
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CRISIS ATTRIBUTES
THE ROLE OF INFORMATION IN CRISIS
MANAGEMENT (Source Reilly, A.H. 1993. Preparing
for the Worst The Process of Effective Crisis
Management. Industrial and Environmental
Quarterly. Vol. 7, No. 2.)

PROBLEM SENSING
CRISIS OUTCOMES
EVENT PERCEPTION
PROBLEM/THREAT DIAGNOSIS
CRISIS MANAGEMENT
DECISION RESPONSE EXTERNAL INFORMATION FLOW
DECISIONS AND ACTIONS
RESOURCE MOBILIZATION RESPONSE ACTIONS
INTERNAL INFORMATION FLOW
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Environment
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The Three Rights of Information to Support Crisis
Decision Making

• Get the right information
• to the right people
• at the right time.

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Layered Functions

• 5. Organizational Memory 6. Group
  Processes
• 4. Values
• Filtering
• Data Validation
• Connectivity

Source Hale, Joanne. 1997. A Layered
Communication Architecture for the Support of
Crisis Response. Journal of Management
Information Systems. Vol. 14, No. 1.
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Tasks of the Crisis Decision Maker

• Define the main elements of the situation
• Maintain receptivity to new information
• Identify and adequately consider the major
  values, interests, and objectives to be fulfilled
• Search for and evaluate alternative courses of
  action
• Estimate probable costs and risks of alternatives
• Search for new information relevant to assessment
  of options
• Discriminate between relevant and irrelevant
  information
• Consider problems that arise in implementing
  options
• Assess the situation from the perspective of
  other parties
• Resist both defensive procrastination and
  premature closure
• Monitor feedback from the developing situation
• Make adjustments to meet real changes in the
  environment

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Characteristics of Defective Decision Making in
Crisis

• A truncated time span, with major attention being
  devoted to the immediate and diminished attention
  to long-range consequences of the action
• A perceived requirement for decisional closure,
  which may in turn lead to premature action or,
  conversely
• In searching for certainty, a tendency to
  irrational procrastination
• Cognitive rigidity, a tendency to maintain a
  fixed mind-set and not be open to new
  information
• A tendency to reduce cognitive complexity and
  uncertainty
• A reduction of the range of options considered
• In considering options, a tendency to bolster,
  - that is to upgrade factors in favor of the
  favored action prescription and downgrade factors
  militating against

Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers, in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Pages 475.
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Characteristics of Defective Decision Making in
Crisis (Contd)

• A tendency to view the present in terms of the
  past
• A tendency to seek familiar patterns, to relate
  the critical events to mental schemata or
  scripts
• Diminished creativity
• A tendency toward the fundamental attribution
  bias to see the others actions as being
  precipitated by internal (psychological) causes
  rather than external circumstances (example my
  adversarys actions show he is malevolently out
  to destroy us, rather than that he is protecting
  himself from external threats) and
• A corresponding tendency to fall into the
  actor-observer discrepancy that is, to see the
  external situation as the cause of ones own
  behavior without attending to ones own internal
  psychological motivations.

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The Impact of Crisis-Induced Stress on Decision
Makers
Stress
Perception of threat to values
Impact on information processing
Choice of decision or policy

• Stimulus situation

Anxiety or fear
Coping Pattern
Effects of stress on leadership
decision-making Source Post, Jerrold M. 1993.
The Impact of Crisis-Induced Stress on Policy
Makers, in Avoiding Inadvertent War, edited by
A. George. Boulder, CO Westview Press. Page 475.
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PERFORMANCE/STRESS CURVE
Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers. in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Page 474.
Performance
Stress
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The Compulsive Personality Under Crisis Induced
Stress

• Folie du doute - paralyzed by indecision.
• Tendency to irrational procrastination because of
  search for certainty fear of making a mistake.
• Once decisional closure, difficult to reopen.
• Comfortable with applying set policies and
  procedures to solve problems.
• Sensitive to position in hierarchy.
• Overly responsive to superiors, competes with
  peers and dominates subordinates.

Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers, in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Pages 477-479.
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The Narcissistic Personality Under Crisis Induced
Stress

• Self centered, egocentric, and self-absorbed.
• Seek constant reassurance of self-worth.
• Primary loyalty to self acts to promote own
  position.
• Can shift positions easily.
• Believe that they are principled and scrupulous
  individuals.
• Seek advisors who prop up their self-esteem.

Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers, in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Pages 479-481.
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The Paranoid Personality Under Crisis Induced
Stress

• Surrounded by enemies - extreme suspiciousness.
• Difficulty trusting own subordinates.
• Fixed conclusion in search of evidence.
• Do not accept information and advice that runs
  contrary to own conclusions.

Source Post, Jerrold M. 1993. The Impact of
Crisis-Induced Stress on Policy Makers, in
Avoiding Inadvertent War, edited by A. George.
Boulder, CO Westview Press. Pages 481-483.
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Five Basic Patterns of Decision Making

• Unconflicted adherence
• Unconflicted change
• Defensive avoidance
• Hypervigilance
• Vigilance

Source Fink, Steven. 1986. Crisis Management
Planning for the Inevitable. New York Amacom.
Pages 133150.
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Tasks of the Crisis Decision Maker

• Define the main elements of the situation
• Maintain receptivity to new information
• Identify and adequately consider the major
  values, interests, and objectives to be fulfilled
• Search for and evaluate alternative courses of
  action
• Estimate probable costs and risks of alternatives
• Search for new information relevant to assessment
  of options
• Discriminate between relevant and irrelevant
  information
• Consider problems that arise in implementing
  options
• Assess the situation from the perspective of
  other parties
• Resist both defensive procrastination and
  premature closure
• Monitor feedback from the developing situation
• Make adjustments to meet real changes in the
  environment

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Decision Making Patterns

• Vigilance follows a methodical, high-quality
  process to objectively collect available
  information, thoroughly consider it, search for
  other possible options, and make a well reasoned
  decision.
• Unconflicted adherence continuing with the
  current situation.
• Unconflicted change following the last advice
  received.
• Defensive avoidance avoiding decision making.
• Hypervigilant vacillating approach.

Source Fink, Steven. 1986. Crisis Management
Planning for the Inevitable. New York Amacom.
Pages 133150.
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A Definition of Groupthink

• a mode of thinking that people engage in
  when they are deeply involved in a cohesive
  in-groupmembers striving for unanimity override
  their motivation to realistically appraise
  alternate courses of action a deterioration of
  mental efficiency, reality testing, and moral
  judgement that results from in-group pressures.

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 9 in
Groupthink.
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Antecedent Conditions for Groupthink

• Primary Moderately or highly cohesive group.
• Structural or administrative faults in the
  organization in which the group exists including
• Insulation of the group.
• The group leaders preference for a certain
  decision.
• A lack of norms requiring methodical procedures
  for the group.
• Homogeneity of the group members social
  background and ideology.
• High stress from external threats with low hope
  of a better solution than the leaders.
• Low group self-esteem induced by the groups
  perception of recent failures, excessive
  difficulty on current decision-making tasks, and
  moral dilemmas (i.e., apparent lack of feasible
  alternatives except ones that violate ethical
  standards).

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 2 and 3.
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Symptoms of Groupthink

• Direct social pressure placed on a member who
  argues against the groups shared beliefs.
• Members self-censorship of their own thoughts or
  concerns that deviate from the group consensus.
• An illusion of the groups invulnerability to
  failure.
• A shared illusion of unanimity.
• The emergence of self-appointed mind guards that
  screen out information from outside the group.
• Collective efforts to rationalize.
• Stereotyped views of potential adversaries
  outside the group.
• Unquestioned belief in the groups inherent
  morality.

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 3.
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Symptoms of Defective Decision-Making

• Incomplete survey of alternatives.
• Incomplete survey of objectives.
• Failure to examine risks of preferred choices.
• Failure to reappraise initially rejected
  alternatives.
• Poor information search.
• Selective bias in processing information at hand.
• Failure to work out contingency plans.

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 3.
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Antecedent Conditions of Teamthink

• Team beliefs and assumptions emphasizing the
  positive.
• Team self-talk - encouraging open discussion.
• Team mental imagery - creating a common vision.
• Thought patterns - optimism.

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 57.
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Symptoms of Teamthink

• Encouragement of divergent views.
• Open expression of concerns and ideas.
• Awareness of limitations and threats.
• Recognition of members uniqueness.
• Discussion of collective doubts.

Source Neck, C.P., and Manz, C.C. 1994. From
Group Think to Teamthink Toward the Creation of
Constructive Thought Patterns in Self-Managing
Work Teams. Human Relations. Vol. 47, No. 8.
Derived from Victims of Groupthink, by I.L. Janis
(Boston Houghton Mifflin. 1972). Page 7.
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Tasks of the Crisis Decision Maker

• Define the main elements of the situation
• Maintain receptivity to new information
• Identify and adequately consider the major
  values, interests, and objectives to be fulfilled
• Search for and evaluate alternative courses of
  action
• Estimate probable costs and risks of alternatives
• Search for new information relevant to assessment
  of options
• Discriminate between relevant and irrelevant
  information
• Consider problems that arise in implementing
  options
• Assess the situation from the perspective of
  other parties
• Resist both defensive procrastination and
  premature closure
• Monitor feedback from the developing situation
• Make adjustments to meet real changes in the
  environment

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Myers Briggs

• http//www.humanmetrics.com/cgi-win/jungtype.htm
• http//www.typelogic.com/

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