Effective Management of Crisis Communications

Abstract

In a view of the fact that in modern realities of post-industrial information society, the share of intangible assets in the companies' value has significantly increased. The monetized value of an organization's reputation is a part of such assets which is mainly determined by external communications had arised an issue of ensuring reputation security that has become especially relevant. One of justifications for need to apply crisis communication management is also changed direction of modern business. The reason for the change in modern concepts of effective business management was the new criteria for the service sector efficiency, which is a consequence of intense competition inherent in this highly profitable field of activity, which increases the importance of reputation issues. In turn, the abstract concept of a company's reputation is formed by specific parameters that are important for target audiences and are expressed in the numerical characteristics of the value of intangible assets. Considering the fact that intangible assets often make up a significant part of the companies' value and determine their financial performance, the issues of managing the value of these assets represent one of the most responsible tasks of modern management. There is a definition of the concepts of crisis, crisis communication and communication management as an integral component of crisis management of an organization is given in the terminology of leading Russian and foreign academics. The paper shows the successful result which is critically dependent on communication management effectiveness. Thus, the subject of the study is crisis communication management; the goal is to build a model for analyzing the effectiveness of managing crisis communications. The achieving method of that is to use a mathematical apparatus similar to the apparatus of multi-discriminant analysis (MDA) of Professor Edward Altman. The scientific novelty consists in the application of numerical methods for analyzing the effectiveness of crisis communications, and the result is in describing a model for analyzing the effectiveness of managing crisis communications. The use of the model for analyzing effectiveness of crisis communication management would provide an organization with the opportunity not to lose the achieved level of capitalization, provided that the reputation/communication component is effectively used in its crisis management.