Crisis Management Models & Theories l Smartsheet (2024)

The different approaches along a crisis management maturity model, from most to least advanced, are as follows:

• Pre-emptive Crisis Management: This approach seeks to prevent or resolve a crisis at its earliest sign.
• Proactive Crisis Management: In this approach, organizations take initiative early in the crisis and seek to shape how events unfold.
• Responsive Crisis Management: This occurs when there is little warning of a crisis. However, thoughtful and quick analysis can lead to effective action that accounts for long and short-term results.
• Reactive Crisis Management: This is often a panic-driven or knee-jerk reaction. Emotions like fear play a leading role, and objective thinking is largely absent from the crisis response. The company faces crises defensively and, following the crisis, the business may experience problems, high turnover of senior leaders, or even business failure.

A similar model by Can Alpaslan and colleagues focuses on stakeholder involvement and views the crisis management maturity continuum as follows:

• Proactive Crisis Management: All stakeholders that could potentially be harmed should participate in crisis preparation. In the response phase, the organization anticipates knock-on effects and voluntarily discloses the most negative information before the media discovers it.
• Accommodative Crisis Management: The organization accepts that a crisis is possible and involves a broad set of stakeholders in preparation. In a crisis, the company accepts responsibility, voluntarily meets the needs of the victims, and tells the truth.
• Defensive Crisis Management: The business prepares only for crises with high expected costs and involves stakeholders only if required by law. During a crisis, the organization resists admitting full responsibility, but does admit some. The company only does what is mandated by law.
• Reactive Crisis Management: The organization denies the possibility of a crisis and any negative consequences. In a crisis, the company denies all responsibility, closes off communications, and hides the truth. Its stance is uncooperative.

Until the mid-20th century, organizations primarily faced crises that they had seen before (though of course they were still challenging). The most common threats included natural disasters and labor problems, so companies typically planned for these and other familiar scenarios.

However, the increasing pace of business, advancements in technology, and increasing globalization forced companies to more frequently confront novel and unpredicted crises, such as workplace violence or global pandemics. In this newer context, scenario-based planning holds limited value, since this kind of preparation hinges on facing a known hazard, which triggers a set series of actions.

Organizations fare better by developing their capacities to handle any kind of crisis, even ones that are completely new. Companies can still detail response plans for common kinds of calamities, like fires, but compared to the scenario-based model, a capacity-based model emphasizes building capacities like communications, financial backup plans, and readiness for remote work.

Modular crisis management plans work well in the capacity-based model. Modular plans break down responses into component actions that managers combine and match to the specific demands of the crisis. You can find details on modular planning by reading “Step-by-Step Guide to Writing a Crisis Management Plan.”See “Free Crisis Management Templates” to download templates for management plans, helpful checklists, and tabletop exercises.

In 1994, Mitroff described five crisis stages, which also follow a similar lifecycle progression:

• Crisis signal detection
• Probing and prevention (probing refers to looking for risk factors)
• Containment
• Recovery
• Learning

Mitroff was one of the first researchers to recognize that, due to resource limits, preparing for every conceivable kind of crisis is impossible. He noted that crises tend to fall into certain categories, which Mitroff called clusters, such as breaks or defects in equipment, external actions, and threats (i.e., product recalls). Similarly, prevention actions cluster together, too.

Based on a survey of the Fortune 1,000 companies, in 1988 Mitroff, along with Terry C. Pauchant and Paul Shrivastava, recommended that companies rationalize their crisis management programs by forming dual crisis “portfolios.” The first portfolio consists of crises, one drawn from each crisis cluster, and the second portfolio comprises matching preventative actions from each cluster. Mitroff and his colleagues posited that setting up these two portfolios provides at least minimum coverage across crisis categories.

In 1998, John Burnett proposed a crisis management model with three broad stages — identification, confrontation, and reconfiguration — which each consist of two steps. This model also follows a progression like the other lifecycle models. The steps in Burnett’s model are goal formation, environmental analysis, strategy formulation, strategy evaluation, strategy implementation, and strategic control.

Preparing for a crisis involves goal-setting and analyzing the threat environment. Managers then formulate a strategy in the face of a crisis, and the organization responds to the crisis via strategy implementation and strategic control (the latter stage includes the oversight of crisis management actions as well as post-crisis review).

Burnett held that the process is more difficult to master as the steps progress. In an outer ring, he arrayed factors that stand in the way of crisis management, including time pressure, control issues, threat level concerns, and response option constraints. In this sense, the model functions like a matrix.

In 2007, Tony Jacques took issue with the idea that crisis management is a linear process of sequential phases in which you manage issues one at a time. Instead, he argued that important processes and activities often overlap or occur simultaneously, such as crisis prevention and preparation, and don’t always proceed in one direction.

As opposed to the lifecycle models, Jacques proposed that crisis management and the field of issue management are related, integrated disciplines. Issues management involves creating systems to deal with problems — while issues are more routine than crises, they overlap because issues can become the source of crises if not properly dealt with.

Jacques’ relational model has four primary elements — crisis preparedness, crisis prevention, crisis incident management, and post-crisis management — each with clusters of activities and processes. He concluded that understanding the relationship among these elements, and putting them in context of larger organizational management, diminishes crisis-related losses.

Incident command systems managed the complex web of activities that took place during the Deepwater Horizon oil well explosion and spill in the Gulf of Mexico in 2010, which resulted in 11 deaths and massive contamination.

The crisis response represented an enormous management challenge. More than 40,000 personnel joined from the public and private sectors — the effort was the largest mobilization of resources to address an environmental emergency in the history of the United States, according to the U.S. government. For more crisis management examples, please see “The Most Useful Crisis Management Examples: The Good, Bad, and Ugly.”

Attribution theory holds that companies suffer reputation and business harm when the public blames them for a crisis. Situational crisis communications theory builds on this idea by recommending that businesses tailor crisis communications to the crisis’ potential to hurt the company’s reputation.

People closely associate Coombs with both these theories: Attribution theory starts from the premise that it is human nature to seek to explain why events occur, especially sudden and damaging incidents like crises. Typically, people attribute responsibility to an entity, such as a company, or a situation. When people blame an organization, they direct negative emotions toward it. Coombs found that this can result in damage to the organization’s reputation, reduced intention to do business with the company, and increased tendency to speak negatively to other people about the organization.

While Coombs didn’t anticipate the power of social media to amplify reputational harm, tweets and other posts can be an especially damaging form of the negative word-of-mouth he described. These networks have introduced a level of rapid two-way communication between consumers and companies that previously did not exist, testing the ability of companies to control the messaging. Therefore, social media management is an essential part of crisis management.

In situational crisis communications theory, Coombs said crisis managers must first determine the threat to the company’s reputation by assessing which of three clusters the crisis fits into:

the victim cluster (the organization is a victim); the accidental cluster (the organization unintentionally caused the crisis); or the intentional cluster (the organization intentionally acted wrongly). The clusters have escalating potential to harm the company’s reputation because of the level of responsibility attributed to the company (minimal, low, or strong).

Based on an assessment of the situation and reputation risk, Coombs believes the organization should respond with one of three strategies: deny, diminish, or rebuild. In deny strategies, the organization assumes no responsibility; diminishing strategies seek to downplay the seriousness of the crisis; and rebuilding responses tend to involve apologizing.

Secondary responses are referred to as bolstering, and include reminding (for example, drawing attention to the company’s past good deeds); ingratiating (praising stakeholders); and victimizing (pointing out the organization’s status as a victim, too).

Coombs compiled the following 10 crisis communications best practices based on attribution theory, including apologizing in certain circ*mstances:

1. Provide all victims or potential victims with instructions, such as recall information.
2. Express sympathy to all victims, along with information about corrective actions and trauma counseling.
3. For crises in which the organization faces minimal blame and there are no so-called intensifying factors (history of crisis and negative past reputation), the above two steps will suffice.
4. If there is an intensifying factor, offer excuses and/or justification.
5. The same response applies to a crisis in which blame is low and there is no crisis history or poor past reputation.
6. If there is low attribution of responsibility and an intensifying factor, add compensation or an apology to the first two steps.
7. If the public strongly attributes responsibility to the organization, offer the first two steps as well as compensation or an apology.
8. Use compensation any time a victim experiences serious harm.
9. Supplement any response with the remind and ingratiate strategies.
10. Save denial and attacking the accuser for crises that involve rumors and challenges in which a stakeholder contends the organization is acting wrongly.

Researchers recognize the powerful role that apologies play in crisis management. This has been formalized as an area of study under the term corporate apologia, which means using rhetoric to protect your reputation while explaining what happened.

In apologia, the crisis response options are denial of responsibility, shifting of responsibility, or taking full responsibility with an apology.

In Keith Michael Hearit’s 2011 book Crisis Management by Apology, in which he developed the theory of apology, he states that companies often avoid apologies in favor of making no public comment because of concerns that apologizing increases their liability or weakens their position in lawsuits. However, Hearit contended that a public relations-driven strategy, in which the organization apologizes and seeks to be candid, is more effective.

Later research by Coombs and Sherry Holladay contradicted this statement, finding that apologizing isn’t necessarily more effective in reducing reputation damage and negative word-of-mouth among stakeholders who are not themselves victims. In these studies, apologizing was about as effective as other victim-centered strategies, such as expressions of sympathy and compensation.

Image repair theory, also known as image restoration theory, shares a focus on rebuilding an organization’s reputation when it has been damaged by a crisis.

Communications scholar William Benoit originated image restoration theory in his 1995 book Accounts, Excuses, and Apologies: A Theory of Image Restoration Strategies, which focuses on the messages a company should communicate during a crisis. He offers five categories of image repair strategies: denial, evasion of responsibility, reducing perceived offensiveness of the action (such as with compensation), corrective action, and mortification (confessing and begging forgiveness).

Structural functionalism comes from sociology, and looks at society as a structure made up of institutions that function together to keep the whole running, like organs that work together to keep the body functioning.

In crisis management, this theory explains how organizational communication relies on a structure made up of networks for information to flow and a hierarchy of people who manage the process.

Chaos theory comes from mathematics, and holds that some systems are so complex that small differences in starting conditions can make them act very differently and unpredictably.

This characteristic inspired the concept of the butterfly effect, in which a butterfly flapping its wings in Brazil can theoretically cause a tornado in Texas. This potential (for small changes to have unpredicted effects) can make these systems appear completely random, even when they may not be.

Researchers have applied both chaos theory and the butterfly effect in crisis management. For example, they studied officials who made precise and rosy predictions about disasters without taking unpredictable weather variables into account. This occurred in Canadian floods in 1997, wherein inaccurate communication meant that many communities were not prepared for the scale of a disaster that occurred.

In the corporate world, chaos theory can show the limitations of controlling volatile public perception of a crisis.

In 2009, Alpaslan, Mitroff, and Sandy Green published a theory that focused on the role of stakeholders in crisis management. They argued for including stakeholders in crisis preparations and responses — not because of their power or influence on financial value, but due to factors such as potential for injury.

Crises can reorder the importance of a stakeholder group, and managers who understand stakeholder theory consider and incorporate the needs and values of a range of stakeholders, Alpaslan, Mitroff, and Green said.

Resilience theory, which has its roots in child psychology, holds that having one or more protective factors can help individuals survive adversity with less harm. In business, resilience theory helped give rise to business continuity planning, which seeks to make companies more resistant to failure.

A business continuity plan is similar to a crisis management plan in that it anticipates emergencies and disruptions that could occur and defines actions to regain normalcy in the company. Read “Business Continuity Planning: How to Do It Well,” to learn more about that process.

According to researcher Patrice Buzzanell, resilience theory outlines five elements that businesses can cultivate to strengthen their ability to bounce back: crafting normality, affirming identity anchors, making use of communication networks, putting alternative logic to work, and emphasizing positive feelings while downplaying negative ones.

Integrated risk management is another resilience-boosting business practice. In integrated risk management, company culture is attuned to risk, and organizations seek to evaluate the risks in all their activities jointly, rather than in isolation. Technology-enabled practices support this integration, and the result is better risk-reduction decisions for the whole enterprise.

Contingency theory asserts there is no single best method to organize or lead a company, and that decisions should be made contingent on circ*mstances. Researchers say this applies equally in crisis management, because crises are fluid, complex, and uncertain. Crisis managers must adapt their response to make it contingent upon the situation.

Crisis leaders and communicators should take into account a range of external factors, such as threats, the marketplace environment, social and political support, the characteristics of public stakeholders, and the complexity of the issue.

Internal factors include characteristics of the organization and other threats.

The diffusion of innovation theory describes how new ideas spread and become accepted. According to Evertt Rogers, who pioneered the theory in his 1962 book Diffusions of Innovations, a small minority of people initially adopt innovations. When about 20 percent of the population adopts a new behavior, 70 percent of the remaining people will adopt it, too.

This idea has influenced crisis management by shaping efforts to change behavior and attitudes in emergencies. Specifically, the diffusion of innovation theory can identify behaviors that might be most easily changed, the people who might adopt new practices (and influence others), and the most effective ways to spread new ideas.

An example application of this theory is the effort by public health agencies to get people to wear masks during a pandemic.

The theory of human capital comes from economics, and frames individual characteristics such as education, health, and birthplace as factors that contribute to a person’s productivity and income.

In crisis management, inequalities of human capital — such as disadvantages in education and healthcare and unfair income distribution among classes and races — can lead to or exacerbate crises. For example, when reflected in lower wages or job status, these inequalities make companies vulnerable to discrimination lawsuits, damaged morale, and reputation harm.