Effects of a crisis
Analogue to the Balance Scorecard the four levels financials, process, staff and customer are affected and are subject to an analysis.
Model of the Balanced Scorecard
- Financial level – Which effects can be expected?
At the financial level crises especially have a short negative impact on planned returns. Furthermore, the liquidity of the company can be significantly reduced because – as the case may be – substantial investments might be necessary for the realisation of the solution. The “non-solution” of a crisis can be the economic ruin of a company.
- Process level – What happens when?
At the process level events and contents interact in a time course during the crises.
- Staff level – Which impact have events, information and actions? Who is informed how and when about what?
At the staff level a loss of confidence is highly critical in a company because with short notice manager and specialists could leave the company (termination). An accordant downsizing would have fatal effects for the existing crisis because an appropriate know-how and do-how could not be substituted in an adequate time and quality.
- Customer level – Which impact can be expected for the customer?
At the customer level loss of quality combined with a deficiency of communication will be answered with the withdrawal of confidence. Early information of the customer presenting the defined measures is necessary and vital.
Summarising the main effects of a crisis can be described as follows:
- Customer detraction (bad service, loss of image)
- Loss of confidence at the staff level
- Negative impact on the company up to insolvency
|Crisis prevention||Crisis processing||Synonym||Result|
|good||Crisis resolved||"Nip the crisis in the bud"|
|good||good||"An avoidable training"|
|bad||good||"be struck by lightning"|
|bad||bad||"It can’t get any worth"|
|bad/good||Krise bleibt aus||"Only a non-appeared crisis is a good crisis"|