Question 1

Communication with a firm's stakeholders and employees is unnecessary if the firms' management can control the crisis.

Accepted Answer

Communication with stakeholders and employees is always important, even if management can control the crisis. It helps to maintain trust and transparency with those who have a vested interest in the firm's success.

Question 2

GreenYouth Corp is a waste management company based in Colorado. It is discovered that one of its plants-in Saguache and Rio Blanco-is violating environmental laws. Which of the following is the first step to crisis management?

Accepted Answer

The first step in crisis management is identifying and acknowledging the problem, which in this case is the discovery of hazardous waste dumping by company officials.

Question 3

________ involves turning the crisis into a manageable nonmarket issue.

Accepted Answer

Resolution involves finding a way to effectively manage and potentially resolve the crisis, rather than allowing it to continue or spiral out of control. This may involve finding a solution that addresses the root cause of the crisis, communicating effectively with stakeholders, and working to minimize the negative impact of the crisis.

Question 4

________ is the first component of a crisis management program.

Accepted Answer

Avoidance is the first component of a crisis management program as it involves identifying potential risks and implementing measures to prevent crises from occurring.

Question 5

Which of the following scenarios represents resolution in crisis management?

Accepted Answer

The answer of Which of the following scenarios represents resolution...

Question 6

GreenYouth Corp is a waste management company based in Colorado. It is discovered that one of its plants-in Saguache and Rio Blanco-is violating environmental laws. Which of the following is the last step to crisis management?

Accepted Answer

The answer of GreenYouth Corp is a waste management company...

Question 7

The first stage in the life cycle of a crisis is ________.

Accepted Answer

The first stage in the life cycle of a crisis is identification, which is the recognition of a potential crisis situation.

Question 8

In what stage can a crisis explode as a result of media coverage, government actions, or company actions?

Accepted Answer

The stage where a crisis can explode as a result of media coverage, government actions, or company actions is the escalation stage. This is the stage where the crisis becomes more severe and widespread, and actions taken by outside parties can contribute to this escalation.

Question 9

Reassessment of crisis avoidance measures and preparedness is irrelevant to a firm after a crisis has been resolved.

Accepted Answer

Reassessment of crisis avoidance measures and preparedness is important even after a crisis has been resolved as it helps the firm to identify areas of improvement and enhance its ability to handle future crises.

Question 10

________ involves actions by the company or government to deal with the crisis and provide assistance to victims.

Accepted Answer

Intervention involves taking action to address the crisis and offer support to those affected. This can involve implementing emergency measures, providing resources and aid to victims, and working to mitigate the impact of the crisis.

Question 11

Which of the following statements is true of a crisis?

Accepted Answer

A crisis may be revealed directly to the public or identified within the company. This means that it can be a publicized event or an internal issue that can impact the company's reputation, finances, or operations. Option A is incorrect as a crisis can certainly affect the credibility of a company's management. Option B is incorrect as not all crises result in property damage. Option D is incorrect as a crisis can occur suddenly and unexpectedly, without necessarily resulting from a series of developments over time.

Question 12

________ is an aspect of an avoidance strategy.

Accepted Answer

Auditing is an aspect of an avoidance strategy because it involves reviewing and assessing processes, systems, or financials to identify and mitigate risks before they become significant issues.

Question 13

Resolution involves turning the crisis into a manageable ________ issue.

Accepted Answer

Nonmarket issues refer to problems and challenges that organizations face that are not directly related to the market or economic aspects of their operations. Resolving a crisis involves addressing the nonmarket issues related to the crisis such as reputation damage, legal and regulatory issues, public relations, stakeholder management, and social responsibility concerns.

Question 14

The last stage in the life cycle of a crisis is ________.

Accepted Answer

The last stage in the life cycle of a crisis is resolution, where the crisis is managed and resolved, and the organization returns to normal operations. Escalation is a stage where the crisis is getting worse, identification is the initial stage of recognizing the crisis, and intervention is when the organization takes action to manage the crisis.

Question 15

In formulating a strategy for addressing a crisis, as long as a firm has strong brand reputation it need not consider its exposure to liability or response to stakeholders and the public.

Accepted Answer

A firm with strong brand reputation should still consider its exposure to liability and how to respond to stakeholders and the public during a crisis. Ignoring these factors could harm the brand and reputation in the long run.

Question 16

Crisis management can assist during a crisis but is not intended to anticipate the possibility of a one.

Accepted Answer

Crisis management includes both preparatory measures for potential crises as well as responding to actual crises. Anticipating and preparing for potential crises is a key aspect of effective crisis management.

Question 17

The appropriate response to a crisis depends on the root cause and the specifics of the situation.

Accepted Answer

The appropriate response to a crisis is not a one-size-fits-all approach. The specific circumstances surrounding the crisis must be taken into consideration to determine the most effective response.

Question 18

Which of the following scenarios represents intervention in crisis management?

Accepted Answer

Intervention in crisis management involves taking actions to manage the crisis and mitigate its impact. Option D represents intervention as the company officials are communicating that actions are being taken to ensure stakeholder safety. The other options involve external factors such as government regulation (option A) and media reports (option B), or internal information gathering (option C) which do not necessarily represent direct intervention in crisis management.

Question 19

________ is the last component of a crisis management program?

Accepted Answer

The answer of ________ is the last component of a...

Question 20

________ is a situation in which harm to people or property either has occurred or is imminent.

Accepted Answer

A crisis is a time of intense difficulty, trouble, or danger. During a crisis, harm to people or property may have already occurred or may be imminent. Insolvency, bankruptcy, and liquidation all relate to financial situations and do not necessarily involve harm to people or property.

Quiz 5: Crisis Management