Exam 6: Risk, Issue, and Crisis Management.

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Schwan learned from the Minnesota Department of Health that its ice cream was statistically linked with cases of salmonella. Upon learning of the crisis, Schwan immediately shut down production, invited state health officials to inspect its plants, communicated with internal and external constituents, and recalled its products from stores. It also began settling cases with stricken customers as quickly as possible. Schwan placed its customers and their safety first on its priority list, did everything it could to insure their health, and effectively communicated its concern.

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There are many ways to analyze issues, but the two most critical dimensions of issues are likelihood of occurrence and impact on the organization. Two essential questions are (1) How likely is the issue to affect the organization? and (2) How much impact will the issue have? Once these questions have been answered, it is necessary to rank issues in some form of a hierarchy of importance or relevance to the organization. Those at the top priority will receive the most attention and resources, while those at the bottom may even be removed from consideration due to their low likelihood or potential impact. The prioritization stage may involve a simple grouping of issues into categories ranging from the most urgent to the least important. Alternatively, a more elaborate or sophisticated scoring system may be employed.i Other techniques that have been used in issues identification, analysis, and prioritization include polls/surveys, expert panels, content analysis, the Delphi technique, trend extrapolation, scenario building, and the use of precursor events or bellwethers.ii Teams of company experts are also used.