Crisis Management

Crisis Management -Sudden Crisis-

Recently, we have encountered sudden crises caused by accounting frauds, recalls, violations of laws and regulations, and so on. Several of these incidents have occurred at listed companies, which are strengthening internal compliance and internal controls, and crisis management has become an important management issue.

Difficulty in responding to crises

The difficulty of responding to a crisis lies in its nature.

  1. Employees at the site where the crisis occurred and management are strongly motivated by the following: "I want to respond internally and keep this closely held as much as possible" and "I want to minimize our level of effort as much as possible." As a result, they may underreport or underestimate the situation.
  2. Even in the event that a number of difficult decisions are required that could affect the survival of a business in a short period of time, ordinary companies frequently do not possess the special know-how to deal with such situations.

All possible preparations should be made in advance. Without underestimating and taking all possible measures in the face of a situation

  1. The most important issue in responding to crisis is preparation and prevention, such as the expansion of compliance and internal controls, the development of risk management and response systems, the development of crisis response and management manuals, and simulations of crisis responses.
  2. There are many cases in which the situation is underestimated, the initial response is erroneous, and the rapid expansion of damage makes it difficult for the business to continue. In the event of a crisis, it is important to recognize the importance of the initial response and to manage following events accordingly.