Crisis Management

Abstract

When times are uncertain, whether because of human actions or natural catastrophes, executives face challenges that can be managed best by advance planning and preparation. While September 11 was catastrophic, many other events have significant effects on businesses. The Northridge earthquake in Southern California in 1994 resulted in total business and residential insurance claims of $12.5 billion and an estimated total cost of almost twice that. Hurricane Andrew's insurance claims totaled $15.5 billion. And even a significant economic downturn causes sustained, if not direct physical, damage to businesses. Companies that prepare for uncertain times fare significantly better than those that do not.