Online Tutoring on strategic crisis management plan

1.0 Introduction to a strategic crisis management plan

  1. a) Definition of strategic crisis management and a brief discussion about its importance for the analyzed destination and its hospitality and tourism industry

Crisis management can be defined as an ongoing integrated and comprehensive effort that organizations effectively put into place in an attempt to first and foremost understand and prevent a crisis, and to effectively manage those that occur, taking into account in each and every step of their planning and training activities, the interest of their stakeholders. (Santana G. 2004)

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It is important to manage crisis for the tourism industry of India, as a big chunk of the economy depends on the service industry and a large part of this sector is the tourism industry. Over the course of 50 years, India has established its tourism identity as a brand which has gained worth through the principle of time added value. It is important to safeguard this brand value even during times of crises such as the Mumbai attack. An increase in the likelihood of an attack can drop the FDI up to 5% of the GDP; this percentage is substantial enough to have an impact on the whole hospitality industry. These interrelated industries are airlines, hotel reservations, adjoining transportation services for the shuttle of tourists, and the thousands of jobs that the employed hold in these different places. Since all the industries are linked the combined effect is greater than individual loss as the combined synergy effect if all things are optimized is better for the economy in the long run (ACNielson ORG-MARG, 2008).

2.0 The plan in light of the existing conditions in Mumbai

  1. b) the most suitable methods of anticipating crises along with the justification for the selection of these methods

Chronologically there are 3 phases to the management of a crisis. Stage one is the early warning stage where is important to rapidly recognize the imminent emergence of a threat and take maximum control. The best case scenario would be to find a turning point and turn it into an opportunity. Stage two is a series of four clear phases where first you make contact with the event and then enter into in totally and feel its full effect. Quickly following this period you enter into unknown grounds where conventional management doctrine no longer applies and the team has to think out of the box. The final phase of stage two is the cleanup phase where the focus is to contain and minimize damage. The final phase is the audit of the aftermath and it continues long after the crisis event has subsided. This time can be used as a learning period to get better prepared for a future situation of a similar nature. A lot of time is also invested here in terms of voluntary effort to help establish a vibe of confidence back in the market. During this time, the role of positive media and honest opinions is of prime importance to ensure an upward rebound from the catastrophe (Blackman, D., Ritchie, B.W., 2008).

There are no sure-fire strategies to avert crises besides being well prepared and have rehearsed many probable scenarios to enable the situation to be handled with the least damage. The most suitable method to anticipate a crisis is to strengthen first and foremost the intelligence network and institutional structures. Mandate and legislation should be clear and the allocation of capital should be directed towards these security institutions to provide strength to them. Next, a risk assessment unit should be established which should identify and raise concern to major vulnerabilities and looming hazards in the geopolitical landscape. Predefined contingency plans are to be made autonomous in a case of any threats are detected by the early warning systems (Israeli, A., 2007). [1]

Maintaining equipment and supplies in adequate numbers along with at least a bare minimum of training of the personnel is vital. A preemptive strategy is always going to be superior over a passive strategy in all cases as it’s been observed throughout countless scenarios in the past few years. Some argue the futility of setting up a contingency plan for the unknown, especially keeping crisis management plan in mind which can be of a wildly unpredictable nature, but that is not the case (Leslie, D., 1996).

 

3.0 Past experience in dealing with the crisis

  1. c) Preventive crisis management strategy and other measures that will be taken to reduce the likelihood of a crisis occurring and/or mitigating its potential impact

 

The whole study of crisis management can be split into core action plans and strategies. Being preventive is a modus operandi where preparedness and anticipation are key to reducing the likelihood of crisis occurring or at least minimizing its impact. Tactically speaking it is of first importance as Managers can get a fair idea of the necessary steps to take based on past experience, real or simulated in a corporate think tank session. The ones leading the direction, the managers, will be able to foresee the degree of the crisis and be able to approximate the variations on the different repercussions of the crisis. TO enable this facility and keep it sharp in the analytical capacity of management, constant simulations and timely learning and training is very important. This regular stress test of the personnel will ensure that minimum time is spent during a time of crisis and the correct tool can be matched with the correct problem and situation. The need to keep anti-crisis exercises will prove very useful with the aid of brainstorming sessions and pre-warning systems (Lynch, M., 2004).

The preventive strategy can be grouped into what is referred to as the prepared phase. Risk assessment is achieved through horizon scanning, risk radar, and forward looking analysis to detect threats that might be upcoming. The key attribute is also to have a multidisciplinary approach with information sharing between other industries and organizations to share insights, and the drills should incorporate implementation for different time scales to keep all variations of a scenario covered. Training should also take into account the building of partnership networks under stress and to be able to liaison efficiently with different hierarchies in the government (Martilla, J., James, J., 1977).

 

4.0 Impact on the destination image and competitive advantage

The impact on the destination was severe as the crisis unfolded hour by hour over television and social media. Mumbai was paralyzed and its image immediately took a hit with the economic paralysis that followed to the tune of an estimated USD 100 billion. On a national level hotel reservations immediately went on 60% cancelation and psychologically a large portion of society was affected with fears, mistrust in the state and survivor’s guilt amongst other phenomenon[2]. Although it is now known that all hotels received warnings weeks in advance to prepare and expect a terror attack, it still came as a shock catching the security infrastructure off guard (Pizam, A., Mansfeld, Y. (Eds.), 1996).

The Taj had a very prestigious image and in turn carried tremendous tangible value in the form of a very strong brand. Basking in the tradition of a 140-year history of Tapal group, the Taj had an acute competitive advantage locally as well as internationally. It was the first five star hotels operating in India by and Indian and had many of its branches overseas as well.  In the wake of the warnings, the Tajl did employ extra CCTV and enforced restrictions such as no parking near the entrance, etc. As the crisis hit, the management of Taj formed a makeshift crisis assessment cell behind the hotel itself as the events unfolded (Pizam, A., 1999).

Since most of the hotel’s stakeholders are shareholders, employees, government officials, key investors and media personalities, they were able to do a great job of exercising control on the first-hand information that was leaking out live. Through influence on media and government officials, Taj was able to minimize blame but strongly put forward a request publicly many times. Taj brought to notice the fact that there needs to exist a crisis management plan at state level as well government authorities. Taj also placed a successful spin on the events by distancing itself and reframing the attack as aggression not just on the hotel but on India and its image as well[3]. Another key part of their Brand enrichment campaign post-crisis were emotional TV placements with lines such as ‘welcome back home’ In this way Taj was able to hold onto a fair amount of its competitive edge and within 2 years was able to open all 565 room available for booking (FHRAI 2015).

 

5.0 Mistakes in handling the crisis

  1. d) the most suitable crisis management instruments and a justification of their applicability to the specific crisis situation

 

For many Southeast Asian countries, proactive planning is not a preference and instead, they have shown a preference towards reactive crisis management,  This approach is very context specific being government driven, and also with an emphasis on information and communication management to foster effective coordination and collaboration amongst the relevant stakeholders. Research shows and it has been revealed that crisis recovery can be enhanced by strong, good infrastructure and aggressive marketing. An example of infrastructure centric crisis planning is the common measure of reactive crisis management in the form of government aid packages. Tourists tend to have short attention spans, and after the events of a crisis have transpired, the aggressive promotion of tourism, development of niches like ecotourism are just some of the forward thinking steps governments take (Phillips, P.A., 1999).

The government of India’s immediate response during Mumbai attacks demonstrates very many key weaknesses. The lack of response from Intelligence despite early warnings from USA and other contacts was due to uncertainty on the window of conflict. There was also limited coordination between RAW and the central security agency in the few days preceding the crisis. India was not able to adequately monitor its coastline as for every 5000 miles it has a ship and about 100 ships in total at most despite intercepts from hostiles, the coast guard simply lacked the funds, which is an underlying issue in the underdeveloped world. The hostage rescue plans of the NSG commandos were flawed as a command center was never set up to coordinate and direct the counter efforts from[4]. It was due to a public lawsuit against the government that drastic steps were taken and many reforms were implemented to better employ the tools of crisis management (FHRAI 2015).