Topic 5.7: Crisis Management and Contingency Planning Questions

What does the term contingency planning mean?

Garrow Ferries carries passengers between islands. For each action, identify whether it is contingency planning or crisis management. 1. In March, managers write down what the crew must do if a ferry’s engine fails at sea. 2. In July a ferry runs aground, and the captain and head office decide on the spot how to bring 300 passengers ashore. 3. Every year the crew practise an evacuation using the written plan. 4. That evening, after a video of the grounding spreads online, the managing director answers reporters’ questions.

Define the term crisis management.

Brennock Toys has found that the wheels of one of its toy cars can come loose, and a young child has swallowed one. Describe one factor in effective crisis management.

Castlow Cinemas finds that hackers have stolen the card details of 40,000 customers who booked online. Here is what it does: 1. Within an hour, it shuts down its online booking system. 2. Its statement says what was stolen, and that Castlow had not updated its security software. 3. It emails every affected customer, puts a notice on its website and tells staff at all 30 cinemas what to say. 4. Only the managing director speaks to reporters, and a team of four takes every decision. Identify the factor in effective crisis management that each action shows.

Marchfield Online ships everything from a single distribution centre. Which element most needs to be in its contingency plan?

Maresby Water bottles spring water. On Monday its quality tests show that a batch of 20,000 bottles, already delivered to 300 shops, may contain traces of cleaning fluid. Nobody has reported being ill. A local newspaper has heard about the problem and has asked the company for a comment by 4 p.m. Explain two factors that would help Maresby Water manage this crisis effectively.

Venner Coaches runs 40 coaches between cities. It has a written plan, practised every year, for a coach breaking down on a motorway. Last month a passenger filmed one of its drivers using his phone while driving, and the video spread online within hours. Explain one difference between crisis management and contingency planning for Venner Coaches.

Corran Dairy delivers milk to 5,000 homes each morning. At 7 a.m. on Wednesday it finds that one tanker of milk, already bottled and out on the delivery vans, was not properly cooled. Explain why speed is important for Corran Dairy in managing this crisis.

Otterby Hotels runs 12 hotels. Its managers have written and practised plans for a fire, a flood and a power cut. Last winter an outbreak of a stomach virus made 80 guests ill at one hotel, and the managers had to decide what to do as it happened. Distinguish between crisis management and contingency planning, using Otterby Hotels as an example.

Distinguish between crisis management and contingency planning.

Explain two costs or drawbacks of contingency planning.

What is the difference between contingency planning and crisis management?

What is the main benefit to a business of having a tested contingency plan?

Why can a contingency plan give a business false confidence?

An online retailer depends on one distribution centre. Explain two elements its contingency plan should contain.

Skyhop is a regional airline with eight aircraft. When an aircraft is grounded by a fault, its managers decide what to do on the day, and passengers often wait five or six hours for news. Explain one way in which contingency planning could affect the time Skyhop takes to respond when an aircraft is grounded.

Explain two benefits to a business of contingency planning.

Lena’s Bakery Ltd bakes all its bread at night in one bakehouse on Mill Lane, where a head baker and six bakers work around hot ovens from 2 a.m. with no director on site. Explain one way in which contingency planning could improve safety at the Mill Lane bakehouse.

Quillon Juices makes apple juice sold in 120 supermarkets. On a Friday morning, 14 children at a school fell ill after drinking Quillon juice. Within three hours the managing director had ordered every carton from that week’s batch off the shelves. Quillon’s first statement blamed “a batch of apples from a supplier”. Two days later tests showed that one of Quillon’s own machines had not heated the juice properly, and the company admitted this. The recall notice appeared only on Quillon’s website, and several supermarkets learned about it from the evening news. Over the weekend two different managers gave reporters different numbers of cartons affected. On the Monday the managing director appointed one spokesperson and opened a telephone helpline. All 14 children recovered within a week. Table 1: Quillon Juices before and after the recall | | Week before | Week 1 after | Week 4 after | Week 8 after | |---|---|---|---|---| | Cartons sold a week | 50,000 | 18,000 | 31,000 | 42,000 | | Supermarkets stocking Quillon | 120 | 88 | 94 | 101 | Using Table 1 and other information in the stimulus, discuss how effectively Quillon Juices managed the crisis.