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EMMANUEL TETE DARKO

ID#: 18963BMA26807

Change And Crisis Management:

(How can crisis initiatives be implemented?)

ATLANTIC INTERNATIONAL UNIVERSITY HONOLULU, HAWAII

December, 2012

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Table of Contents Page

Abstract………………………………………………………………………………………..3

Chapter 1: Introduction……………………………………………………………………....4

Chapter 2: Concept Review………………………………………………………….……..5

2.0: Introduction………………………………………………………………….5 2.1: Study Descriptions/Structure …………….…………………………….....5 2.2: Objectives………………………………………………………………..….5 2.3: Developments From The Paper…………………………………………5-6 2.4: Methods…………………………………………………………………….6 2.5: Results …………………………………………………………………….7 2.6: Conclusion and Recommendation…………………………………….7-8 2.7: To what Extent was The Objectives Achieved? …….……………….8-9. 2.8: Market/Industry…………………………………………………………..9 2.9: Merits ……………………………………………………………………..9 2.10: Demerits…………………………………………………………………9-10 2.11: Theoretical Limitation……………………………………………………10

Chapter 3: Study Methodology……………………………………………………………10

Chapter 4: Findings And Discussions……………………………………………..........11

4.1: Meaning And Driving Factors of Crisis…………………………………11-14

4.2: Negative Impact of Crisis…………………………………………….11-16

4.2.1: Positive Impact of Crisis…………………………………………….16

4.3: Crisis Management Initiative Implementation……………………….16-17

4.4: Constraints in Managing Crisis…………………………………………17

4.5: Relationships Connecting Previous And Extant Study….................17-18

4.6: Limitations of The Study…………………………………………………18

Chapter 5: Conclusion……………………….………………………………………….18-19

5.1: Recommendation………………………………………………………19-21

Reference…………………………………………………………………………………..22-23

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Abstract When cuffed by a crisis, businesses that have built distress absorbers have the capacity to shield its stakeholders, infrastructure and repute. Integrating crisis management in the marketer’s actions contributes to reducing the possibility of receiving the full adverse impact of a crisis. In contemporary and turbulent business environment, appropriate crisis management is critical to the triumph of commerce. The study investigates how crisis initiatives can be implemented and the inability of preceding studies to highlight the driving factors of crisis, the positive and negative impact of crisis, and the need for managing crisis in business; and offer recommendations to marketers on how to manage businesses in event of crisis provide a justification for this study. This provides a gap and this paper is determined to partially fill this gap. Review of previous concepts, reading, watching and listening to audio-visual materials, interactions with professionals and practitioners, academia and stakeholders were employed to validate the findings of the study. Information gathered were not altered and that guarantee the study’s reliability and validity.

The study found that Product defects, industrial accident, technological failure, poor communication, imitation, illicit activities, speculations, labor unrest, management abduction, weak monetary and fiscal policies, and globalization are causes of business crisis; crisis creates business opportunity for marketers’; crisis could erode stakeholders confidence, increases cost of doing business, leads to product recall, damages marketers image, calls regulators to audit business operations, creates political and economic instability; same crisis solution cannot be applied to all crisis situations; and non existence of widely agreeable laid down measures to combat crisis effectively and efficiently is a challenge in managing business crisis. These results are critical to the survival of businesses and it behooves on marketers to craft decisive modalities to meet business crisis to become competitive and survive at the marketplace.

The paper recommends the need for marketers to apologize in event of crisis and have a crisis team, systemic process to respond to crisis, recall defects product, and remind stakeholders of positivity of the business in the past as way of healing the injured image.

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Chapter 1: Introduction

Hypothetically an executive of a firm is told by his physician that he has an incurable cancer, the executive is most likely to go through some stages upon being told he has terminal disease. First there will be denial, followed by resentment if the first proves ineffective, later depression is probable to emerge and the last stage for the executive is to embrace the situation and make significant positive ineradicable mark before whatever will happen happens. These stages are applicable to businesses as well in event of crisis. Entrepreneurs have concentrated mostly on financial and growth performance variables and paid miniature attention to management of business crisis with its effects considered as a inconsequential externalities of business. The consequences for many businesses have been contiguous to insolvency. Business crisis is a tragedy impetuous by stakeholders, business structures, economics and technological variables that have the prospect to cause widespread harm to humanity and ecology. Business crises are phenomenon with potential threat to the survival of business and its reputation, and this possess the potential of affecting the interactive nature of businesses and their stakeholders. It is an unpredicted and unanticipated incident that terrorizes marketers’ interventions and endangers the financial and reputational positions of business which has the potential to injure the business stakeholders, infrastructure, liquidity position and corporate image. For example, Jane Jordan-Meier (2011, pp. 5), “crisis occurs when an issue has been brewing for some time which is bad and has been concealed for long and a dissatisfied staff reveals the issue and becomes the front page news in the media”. In view of this there is the need for businesses to strategically manage crisis. Crisis management is the ability to make decisions to combat the adverse effects of business crisis often whilst it is telling; meaning deciding under stress on the future of the business with less relevant and detailed information. Crisis management is defined by Alvintzi, Patrick, Eder, Hannes, (2010, pp. 2) “as the intervention by persons or teams before, during, or after an event to resolve the crisis, minimize losses or otherwise protect the business”. The study investigates how can crisis initiatives be implemented? Although many writers have written on crisis management, little or no emphasis has been offered to subject, especially when some businesses could not recovered from crisis situations. To investigate this hypothesis, two preceding studies were reviewed to generate the research gap. The overarching objective of this study is to partially fill the gaps in the previous concepts by highlighting: the driving factors of crisis, the impact of crisis, the need for managing crisis in business. It is also intended to offer recommendations to marketers on how to manage businesses in event of crisis as well as providing useful ideas to businesses to identify identical crisis situations and manage them effectively.

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Chapter 2: Concepts Review

2.0: Introduction

The concept review segment of the study is to provide summaries and important appraisal of prior literatures relative to the current study, remarkably: The effects of Economic Crises above Management Marketing Strategies of Romanian Business to Business (B2B) Companies by S. C. Căescu and I. Dumitru (2011); and Reshaping Crisis: The Challenge For Organizational Design, by Tony Jaques, (2010). This segment of the extant study aims to situate the extant study into suitable outlook to be evocative, hunt and clarify parallel perspectives of the issues, establish the gap of prior studies to validate the current study and drive the current study. As a result, the extant study concentrated on how change initiatives can be implemented. The outline for the concept review will be the description, objectives, the core issues, methodology, results, conclusion; recommendations; the extent to which the objectives of prior studies were attained, the industry under discussion, pros and cons of prior the studies as well as theoretical limitations. The similarity in all these studies included the impact of crisis on marketing actions 2.1: Study Descriptions/Structure The first previous literature had an abstract, introduction previous study review, methods employed in reaching the findings, conclusion and implications. Sources of information gathered for the study were acknowledged. The second previous study also had an abstract, introduction, main ideas and recommendations. 2.2: Objectives The first previous literature aim was in two fold, first to identify changes in the competitive environment in business-to-business as well as their effects on marketing management of B2B in Romania. And second to identify the extent to which marketing activities have been integrated in businesses and how this integration have been affected by the financial crisis. Whereas the second prior study aims to outline the traditional event approach to managing crisis and discusses the new process approach. 2.3: Developments From The Paper The article of the first concept review, raised issues affecting B2B marketers after the global economic crunch in Romania and how the affected marketers managed the ramifications of the crisis. S. C. Căescu and I. Dumitru (2011, pp. 2082) asserts the ramifications of the global financial crunch which punch most banks and later diffused via the entire masses of Romania in 2008 after United State and western Europe had experienced it a year earlier on resulted in a fall in the country’s Gross Domestic Product (GDP) and economic growth of 7.3% and 1.3% in 2009 and 2010 correspondingly. The crisis hardly hit the expatriate banks and this created dislocation in foreign direct credit lines into the economy, owing to the parent banks considering survival first, thus justifying their inability to fund subsidiaries. The Romanian Government was equally not spared by the crisis, thus contracting 19.5 billion Euros

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from the international bodies, this however, did not contract the threats the crisis posed, rather aggravating the issues since fiscal measures such as escalating the tax rate by 5% and slashing wage bills by 25%. Not only this, most marketers had to wind up their businesses due to insolvency. Coupled with this was high demand contraction for marketers’ value proposition mostly being exports. These affected marketers and had in the past couple of years experienced exponential growth after the country had joined EU and experienced soaring foreign direct investments. This unfortunate impact of the global financial crunch has injected some dynamism and is re-shaping the critical strategic thinking and execution of most B2B marketers in Romania and there is therefore a change in management as a result of the crisis. Issues emerging from the second prior study included referring to business crisis as impact. Tony Jaques, (2010, pp. 10) posits event approach towards crisis management is logically conceptualized and leads to event response; i.e. actions and arrangements to take in event of crisis and considered this as imperative in crisis response and recovery in business. He further contends process approach towards crisis management is disappearing beyond the event approach response and this demands a fresh business design of proactive measures to deal with crisis, thus crisis management is a process continuum and indicates business crisis are not spontaneous, rather crisis signals precede crisis events, marketers have systems to pick these signals and avoid their occurrences and buttress his assertion by quoting Shrivastava, an American intellectual who contends crisis are time and location extensions of processes, instead of seeing it as event. The study opines leveraging on the event and process approaches creates synergy in dealing with business crisis. He postulates a non linear form which sets crisis management as cyclical construct in page 11 of the article and asserts further that, the model elements need to be considered as collection of interconnected and integrative measures likely to overlap or occur concurrently. The cyclical nature of the model according to Tony Jaques, (2010, pp. 12) demonstrates that crisis are unusually traditionally resolved and that systems ought to be placed to contain the effects in the long run with learning response to be applied by marketers in future if there is recurrence. The model had two critical components notably: pre-crisis phase and crisis management phase. The former had two tiers crisis preparedness and crisis prevention. Crisis preparedness has the potential of making the marketer ready to respond to upcoming crisis, but has little prospect in crisis prevention and this could injure the corporate image. The latter has post crisis management and crisis event management. The post crisis offers marketers the platform to avert the causatives of the crisis and need the marketers’ intent and structure in doing so. 2.4: Methods Concerning the first previous study, four previous studies were reviewed by the authors and a qualitative marketing research with an in-depth structured interview applied using senior management of 27 businesses in Romanian business to business field. Sampling was based on ownership, turnover and numerical strength of staff. Concerning the second prior study, discussions and building on previous model in exploring crisis management were the methodologies in developing the paper.

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2.5: Results The first previous study found that about 63% of marketers in B2B environment in Romania have budget to incorporate marketing interventions in business departments whiles 27% of marketers have special department for marketing. The study also found that this allocated budget for marketing activities was reduced by 30% owing to the global financial crisis and was expressed as a proportion of revenue generated previously and staff strength and this was corroborated by about 52% of the respondents of the study. It was also revealed by the study that businesses goals were either deferred for at least a year or re-configured from upwards market power in turnover and net worth toward more stableness plus sustainability as cost is driven away due to reduced budgetary allocation. This necessitated the building of strategic partnership with customers and deferred investment execution plan to suit the market preference. The second study found in page13, that there exist a barrier to businesses learning from crisis situations and that impinge on business improvement after being hit by crisis. This clearly according to the study shows marketers are not openly evaluating crisis situation. In spite of this, the proposed model in the study support how cyclical the process approach is and that feed into the planning/preparedness component. Further, it posits that post business crisis offers a valuable opportunity to amend the driving factors of crisis, but was quick to add that such amendment could be elusive unless there is business intent and structures to support that. More significantly, the study contends deterrent actions are not conventionally considered as part of crisis management. 2.6: Conclusion And Recommendation Regarding the first previous article, it concluded businesses performed situational analysis of market segments portfolio and targeted the perceived ones to be lucrative and ignored those with less scale. The financial crunch made marketers concentrated on conventional segment of profitable loyal consumers to the detriment of penetrating new grounds. Aside this , the study concluded about 55% of businesses had changed their product mix by injecting new ones and also disposing off some old unprofitable ones.B2B marketers in Romania have adopted criteria mix in determining prices, notably: cost, competition and demand. A price list is established by considering the producer cost, competitor’s price and the price at which consumers are willing and able to purchase affect marketers profitability and this represent an economic advance to pricing policy instead of a market advance towards pricing. Another concluding remark was some businesses had increase price in their value proposition as a result of their inability to manage the overheads and not an increase in demand of their offerings. The study insightfully contends orders made by prospective customers, payment modalities of products to be bought, complicated nature of value proposition, quality of rapport between the producer and the customer, competitor’s price, value proposition delivery, conditions, and the kind of market, all affect the price to be charged by the marketer.

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On place, it was clear most businesses had not witness much difference regarding relationship with distributors; however, the financial crunch had made adjustment probable and that included frantic efforts by businesses to retail themselves, thus a decrease in the use of channel members due to profitability concerns. Supplier-buyer relationships had also been affected by this new arrangement and discount was offered for products delivered with flexible installment payment systems introduced as well as product compensation. Due to the credit crunch policy concerning promotion changed and marketers’ participation in trade fairs and exhibitions dwindled owing to their cost implications. Instead, communication materials such as flyers, brochures, and catalog among others were extensively employed at the expense of trade fairs and direct consumer contact and this met the need to down size labor. More so, online ads was in the forefront The first previous study recommended the findings of the study for academic, business purposes since it offers practical tool in understanding the impact of global economic crunch on tools in managing marketing and adapting to varied market conditions in event of change or crisis. The second previous study accentuate thwarting business crisis is a key component on crisis management and that precautionary actions are traditionally overlooked as part of managing crisis, and this has to be in the care of top management and not middle management. Tony Jaques, (2010, pp13-15), recommended: businesses need to lessen or avoid risk from occurring with the view too protecting corporate image and build value. And in so doing there is the need to have crisis outlook and attitude. The need for marketers to incorporate issues and crisis management into strategic plans in an attempt to avoid missed opportunities and be in a position not to be shocked by unpleasant business news were recommended; setting up of robust systems to identify and react to perceived crisis; marketers need to identify stakeholders and understand their viewpoints and integrate them into business strategic plans implementation; every encounter with stakeholders need to be considered as a learning opportunity with the view of reducing crisis situations and benchmarking crisis management systems against competition. 2.7: To what extent was the objectives achieved? The aim to identify changes in the competitive environment in business-to-business including their impact on the strategic marketing management of B2B in Romania. And second to identify the extent to which marketing activities have been integrated in businesses and how this integration have been affected by the financial crisis. Finding that, there is the incorporation of marketing activities in commercial sections of businesses with some creating unique marketing departments in Romania attest to the actualization of the goals of the first previous study. More imperatively, the 30% slashed of marketing budgetary support as a result of the effects of the financial crisis indicate the magnitude of the contracting effects of the crisis on marketing actions. The slashing of budgetary support for marketers reflected in postponement of some marketing goals.

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Product augmentation and disposal by Romania businesses are all testimony to the attainment of the study objectives. The new product development as a result of the crisis clearly shows the positive impact of the global economic crisis powering marketers to think innovatively. The integration of differing price mechanisms in setting up prices, and soaring prices not as a result of soaring demand but inability of Romania businesses to cover operational cost due to the impact of the economic crisis globally. These are upshot of the economic crisis testify the realization of the objectives of the first previous study. The second prior study aims to outline the traditional event approach to managing crisis and discusses the new process approach. However, the study failed to highlight in the traditional event approach what need to be done in event of crisis and how to prepare for it in case it happens. Notwithstanding this, it shown that business crisis does not happen without any prior signals forewarning marketers and fully discussed the integrated model in approaching the new process approach in page 12, where crisis preparedness and prevention variables were extensively outlined. It can therefore be said that the objectives of the study was partially fulfilled. 2.8: Market/Industry Considered The concentration of the study was on marketers in B2B market after the global financial crunch whiles the second previous study considered economic crisis affecting businesses. 2.9: Merits One striking feature of the first previous study followed a logical study format, with an abstract, introduction, with clear goals and systematic presentation of ideas, previous work, methods, findings and conclusions, as well as implications. Works of others cited were duly acknowledged in the reference column and is a big plus for the first previous study and this demonstrated in the reference section. There was a prove of the originality of the study in page 2085 and that was key. Data collection and sampling procedures were succinct and that provided a strong case for issues raised in the study. In-text referencing was duly acknowledged in the reference section of the study and that gives credence to the quality of the study. For instance, in page 10 of the paper, the author quoted and credited the works of Denis Smith to buttress the definition of crisis. Regarding the second preceding study, the introduction, main ideas and recommendations were presented coherently and the use of chart in page 12, to illustrate the interconnectedness of crisis management was wow and offered more clarification to cyclical nature of crisis resolution. The new process approach towards combating crisis was thoroughly discussed and that was remarkable. 2.10: Demerits

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The first previous study’s inability to show graphics in making submission is unfortunate to say the least since this lessens the quality of the study. The study did not show its strengths and weaknesses and the inability of the study to recommend future study in the area to either validate or not were sour. Due to the small sample size of the study, generalizing the results will be difficult and there were no in-text referencing which is critical and threatens the ethical the standards of the study. The structure of the second previous study was woeful since there was no review of any previous concepts; the abstract was not colorful and appealing to capture the attention of readers since the objectives and methods employed in arriving the findings were not vague in the abstract and there was no clear conclusion unlike the first previous study. The pros and cons of the study were missing and that not good enough. 2.11: Theoretical Limitation It is significant to assert that the first previous study did not show why there is the need to manage business crisis, how to lead businesses and change initiatives and their implementations in event of business crisis offered a study gap to validate the current study. Although the second previous study unlock some crisis management initiatives and their implementation, the impact of crisis on businesses was missing and the methodological approach in doing so does not inspire confidence in the results and that demands a parallel study with differing approach to either validate or reject the outcome.

Chapter 3: Methodology

Extensive existing materials were read, the researcher watched, and listened to audio-visual materials on crisis management, comprehensive review of preceding concepts were made to establish the gap of the study. In addition to the above inspiring contacts were made with entrepreneurs, stakeholders, academia, and statutory bodies primarily in Ghana to gather relevant information in building the paper and that validates the results of the study. Information gathered was not twisted and this offered the study the needed reliability and validity. Information gathered from the above were scanned, clarified analyzed and interpreted to make the study meaningful, and reached significant findings, conclusions and uphold its ethical standard. All materials sourced were acknowledged.

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Chapter 4: Findings And Discussions

4.1: Meaning And Driving Factors of Crisis

The study found business crisis to be an occurrence that threatens the prospect of a business if not addressed. And this was corroborated by Harvard Business School Press, (2008, pp. 4), “Crisis is a change that results in an urgent problem that must be addressed immediately”. Imperatively, it was also found that the driving factors of crisis included the following:

Product defects could possess the potency to cause corporate crisis, for instance inability of a product to function as promised by the marketer could create pandemonium at the marketplace, since customers could reject non performing solutions to their needs. This only implies that the profit making ability will be affected and could ruin the prospect of the business. For example, there have instances where automobile firms had to recall their product from the market on the bases of defects. And Eric Dezenhall and John Weber, (2011, pp. 14), assert Johnson and Johnson recalled and destroyed 31 million capsules amounting to $100million due to defects

Industrial accident could make businesses pay dearly for that in terms of fines and expense. Oil companies that flesh out oil to pollute the biodiversity via accident are not spared. Such fines could contract their liquidity position. Anthonissen, Peter Frans, (2008, pp. 22), illustrated that the Maltese oil tanker Erika contaminated the water bodies by spilling oil and that endangered the biodiversity which infuriated the French People. Communication service providers who in an attempt to improve the efficiency level of their operations by erecting mast and efficiency improvement equipments by accident inconvenience their clients and regulators have to impose fines on them. A case in point is telecom firms in Ghana have been fined for poor customer service delivery and Mr. Haruna Iddrisu, the minister for communication in Ghana has urged the regulator of the industry to be sturdy on telecom firms since it is inexcusable for telecom firms to offer investment in service efficiency infrastructure as an excuse for poor service delivery. He posits that when telecommunication operators are investing to deploy their infrastructure, it behooves on them to ensure that it is reliable and dependable. http://business.myjoyonline.com/pages/news/201206/88125.php Technological failure could infuriate customers since it is inexplicable to offer poor customer service due to technological failure. This has become the order of the day in Ghanaian banking sector where bank executives are least perturbed about it and blame technology for not serving customer early. With this, customer would only switch to more efficient bankers who care for their needs. Thus creating crisis situation.

Poor corporate communication could lead to poor customer service delivery with the marketer paying dearly for it, since bad word mouthing could be the results. And with bad word mouthing, prospective customers who otherwise would have patronized will look elsewhere unless the marketer enjoys monopolistic position. Profitability therefore will be hard hit and investment could zip. Further poor communication could lead to non performance on employees’ part. When communication is ambiguous, it only affects

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business performance and profit. It is against this backdrop that Regester, Michael, Larkin, Judy, (2008, pp. 2), contend effective communication on risk perception is most likely to reduce conflict and gain support and trust, which critical attributes in attracting and building custom and stakeholders loyalty. Imitation of marketer’s value proposition could possess the prospect to reduce demand for the product; it can also lead to weak consumer perception of the brand if the imitated product is inferior in performance and eventually result in unfortunate bad word mouthing which has the potential to collapse a business. For example the flooding of Ghanaian market by Chinese textiles with Ghanaian textile designs has completely collapsed the textile industry. With the law enforcement agencies were helpless for bizarre reasons.

Illicit activities of marketers and or their competitors could divert regulators attention to the market and apply the rules stringently or facilitate a legislation that will pose as a threat to the marketers’ actions and stifle existing opportunities existing.

Speculations on marketers’ inputs such as product, price distribution and promotion could all change business dynamics. It is insightful to assert that speculation on exogenous factors could as well affect marketers’ intervention at the marketplace and the bottom line could be affected. It is in view of this that Doyran, and Mine Aysen, (2011, pp. 3), asserts the high-tech bubble Enron bankruptcy was systematically driven by high speculation in high-tech stocks derivatives trading”

Labor unrest could equally halt business operations where production could remain still, till labor concerns are addressed and customers’ are most likely to switch if the business operates in a perfect market. Again if the issue is about wage increment this could weaken the financial footing of the business and renders it incapable to meet its overheads, thus leading to contraction in all spheres of the business. According to Helmo Preuss, (2012), “Capital Economics economist Shilan Shah estimates labor unrest has the potential to knock about 1.5 percentage points off GDP growth in 2012. And indications are blurring regarding an end to the strikes in South Africa, company reports propose the unrest has affected around 40% of gold production. http://www.bdlive.co.za/economy/2012/10/04/labour-unrest-may-knock-1.5-percentage-points-off-gdp-growth-says-economist

Management abduction could destabilize business operations. Consider a situation where a top executive is kidnapped by miscreants and assume that sensitive decisions have to go through him/her. This has the potential to draw the business back and make external and internal customers apprehensive. A shining example is the kidnapping of the Chief Executive officer (CEO) of Europapee Company Limited over allegations of fraud by three suspected persons in Ghana. http://news.peacefmonline.com/social/201108/63258.php.

Global rise in oil prices has the potential to create crisis in business environment. This surge in price dislocates the finances of businesses and results in astronomical increase in production cost and could render businesses less competitive if they are not financially robust. And where the price elasticity of demand of the business’s value proposition is greater than one consumer’s are most likely to switch to alternatives and

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the marketer whose price has gone up due to the price increase could be in danger. For instance, high oil prices affect marketers in several ways: low sales because consumers spend more on basic necessities. Low sales could result in lay-offs. And where marketer use oil directly in their value proposition, like the airlines, a rise in oil price could ability to make profit. http://oilprice.com/Energy/Gas-Prices/The-World-is-Suffering-from-High-Priced-Fuel-Syndrome.html.

Chia, Wai Mun, Sng, Hui Ying (2011, pp. 8 ) opine “The Organization of Petroleum Exporting Countries (OPEC) increased price of petroleum gas fourfold, and numerous economies found it hard to adjust to this”.

Legislation to repatriate illegal settlers could also creates business crisis since demand for marketers’ offering is most likely to drop and that will have contract sales, and affect profitability negatively of the affected market. “A study findings by College of the Northern Border, reveals that more Mexicans who had migrated to the United States were deported”. http://www.google.com/hostednews/afp/article/ALeqM5iftocd8riabYOSjZpPvbbGfp1uIA?docId=CNG.83c643213cdd0e3a73df3d7b6f5f349e.161.

Globalization has the prospect of overproducing, and this leads to lower prices and/or unsold goods along with the possibility of unemployment, which could cause deflation. That is unrelenting fall in the overall level of prices.

Crisis could be driven by failure of monetary and fiscal policies of statutory bodies charged with managing economies and actions of entrepreneurs. The poor management of fiscal instruments could result in: debt overhang that is high debt levels beyond servicing; plummeting interest rate to intolerable levels. This generates easy credit for businesses than the open market will create, with the upshots being easy cash not supported by real savings for mal-investment especially on long term investment horizon, leading to low consumption and economic recession. The Bank of Ghana Monetary Policy Committee, (2012, pp. 1) asserts the Eurozone challenges continue to threaten global economic prospect, and the strictness measures implemented in segments of the zone has resulted in huge downside risks to growth and have contributed to political and social upheavals; thus generating uncertainties in financial markets globally. http://www.bog.gov.gh/privatecontent/MPC%20Press%20Release%20-%20June%202012.pdf Weak monetary arrangement with the intent to increase the money supply if not managed effectively has the potential of crippling markets. Entrepreneurs in an attempt to build shareholder value might misjudge their actions of the degree of uncertainties inherent in market opportunities, thus contributing to business crisis at the marketplace. A case in point is “transferring assets from financial books of banking institutions to markets, creating complex and unclear assets, and inability to effectively evaluating the risks associated with such assets by ratings authorities, and the application of fair value accounting, negligence on the part of trade regulators and supervisors in indentifying and rectifying the rising vulnerabilities”. http://en.wikipedia.org/wiki/Causes_of_the_late-

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2000s_recession. Another example is financial institutions increasing money supply and loans; this is most likely to reduce the interest rate in the money market. Firms will respond to the synthetically low interest rate and expand their investment in production goods relative to consumer goods and create crisis. 4.2: Negative Impact of Crisis The study found crisis in business to be volatile, most important menace with the ability to impact negatively on marketers’ actions, customers and the industry if not effectively dealt with. For example if two-thirds of senior managers of a business resign from their position a crisis situation would have occasioned. This is because they go with all the rich experience gathered on the job and will cost the business substantial amount in replacing them. This has the potential to erode customer confidence which eventually affect patronage of marketer’s offerings.

In event of crisis, cost of doing business is mostly likely to exacerbate and this has the potential of increasing price of the marketer’s value proposition and if the marketer operates in a perfect market and the elasticity of demand facing the marketer’s value proposition is price elastic then there will be critical contraction in sales and profitability and investment will be negatively affected. It is in view of this that Zoellick posits “uncertainties in markets increase costs for developing economies” http://economictimes.indiatimes.com/news/international-business/europe-doing-too-little-too-late-in-crisis-robert-zoellick-world-bank-chief/articleshow/14210621.cms.

Business crisis as a result of consumer complaints lead to recall of products and marketers’ image in event of crisis should be ancillary since the stakeholders’ protection from havoc is key. For instance consumers need to be aware immediately that marketers’ product has been contaminated to protect their health and this enables them to contain the psychological trauma of the crisis. For example if consumers lament over a stench or unusual taste in consumable products, the marketer as a matter of urgency need to recall the product from the market to save consumer’s health. “Toyota willingly recalled over seven million vehicles globally, including some Yaris, Corolla and Camry models, over faulty window switches even though there had not been any reports of accidents, injuries or deaths as a result of the window trouble”. http://www.bbc.co.uk/news/business-19899971.

Crisis if not dealt with decisively, has the potential of damaging the marketers’ hard won image because stakeholders become offended and might want to see the firm suffer severely; it offers people cause to think ill of the business and bad word mouth the brand. Marketer’s image is a valuable intangible asset that captures customers’ attention, attracts talented skills, results in excellent customer care, improves sales, augments investment, leads to competitive advantage, and enhance business bottom line. Thus if a marketer allows customers to bad word mouth the brand due to its inability to decisively deal with business crisis, the repercussion could be potentially dangerous perhaps more than the negative impact of business. If crisis injure marketers’ image, it has unspecified consequences on the interactions between the

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brand and its stakeholders. Worse change in marketers’ reputation could have repercussion in consumer behavior. Consumers can cease patronizing brands or the public might cease offering support to the business. As posits by Gilpin, Dawn R., Murphy, Priscilla J. (2008, pp. 4) “crisis redefines the repute of firms in ways with longer years to reverse—if indeed they could be improved at all”. Employees’ morale could equally be dampened if crisis are not properly handled by businesses. Meaning that valued customers cannot be served excellently by depressed employees, which has the potential to result in high customer attrition rate and eventually affecting profitability due to low patronage. And more critically there is the possibility of huge job loss in event of crisis, particularly when the liquidity positions of businesses are very much affected and operations need to be scaled down. A case in point is the “Swiss bank UBS which announced job cut because it is slimming down its investment actions.” http://business.myjoyonline.com/pages/news/201210/96348.php Crisis could generate robust auditing and scrutiny from industry regulators which could endanger the very survival of businesses since stakeholders’ confidence level in the business could dwindle as a result of regulators intervention. “ The Bank of Ghana on 23rd July, 2012 banned Access Bank Ghana Limited from engaging in foreign exchange business due to violations of the Foreign Exchange Act 2006, (Act 723).” And this could reduce the account base of the bank thereafter since some customers cannot guarantee the reliability and the ethical levels of the bank. http://www.bog.gov.gh/privatecontent/Press%20Release%20-%20BoG%20Lifts%20Sanctions%20Imposed%20on%20Access%20Bank.pdf

“And Barclays Bank in UK posits it is the subject of two new regulatory probes, just after a series of scandals that have dented its reputation. Regulatory authorities are considering whether business won by the bank complies with the Foreign Corrupt Practices Act.” http://www.bbc.co.uk/news/business-20150754

Crisis has the ability to produce political instability which further destabilizes investors’ confidence in an economy, with existing multi-national businesses either shutting down or relocating to a more comfortable environment. Business environment vulnerabilities could lead to instabilities particularly in emerging economies. A shinning case is “the nationwide protest underscoring unemployment and moribund spending power during crisis against Nicolas Sarkozy's economic policies.” http://www.nytimes.com/2009/01/29/world/europe/29iht-france.4.19789187.html?_r=0 . “And in Iceland's the government collapsed due to direct consequence of the global economic chaos.” http://www.washingtonpost.com/wp-dyn/content/article/2009/01/26/AR2009012600531.html.

Business crisis if not checked eventually results in recession and that could constrict customer demand. Customers with debt begin to deleverage and consider only income from economic activity to finance their procurement, thus rising consumer spending will be inhibited. Where consumers spend, there is the possibility that they will be cautious

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and avoid impulse buying, and brand loyalty is most likely not to influence purchases than price. This further deepens the already existing crisis for businesses. There is therefore the need for growth in customer demand to trigger higher production and improve business profitability with all other factors remaining constant. From Sharma, Ashok, Kohli, Harinder (2010, pp. 28), postulate “high levels of unemployment, less credit to households contract consumption”. 4.2.1: Positive aspects of crisis It was evident from the study that crisis could be a good omen on businesses, since business changes could be fast track and hidden challenges faced head on with business revolutionalized for the betterment of stakeholders. Crisis creates multiple learning opportunities for marketers at the marketplace. This implies that business opportunity exist even in damaging events and crisis offer marketers to act which ordinarily they would not have acted. It is in this regard that Andrew Hiles, (, pp. 4), posits crisis offers opportunities for value creation and attainment of business goals. And as Robert R. Ulmer and Timothy L. Shellow (2010, pp. xiii), put it, “businesses take opportunity to learn from crisis situation and build up prospective vision for the business in moving forward” 4.3: Crisis Management Initiative Implementation The extant study found that same crisis response for differing crisis situations is most likely not to be prudent crisis management. In view of this, appreciating the nitty-gritty of business crisis situation will equip the marketer to establish the response measures to optimize the reputational protection. This implies evaluating the business crisis to identify the degree of reputational threat to the brand and dealing with it. In event of crisis, marketers need to address whether crisis exist and whether there is the need to respond and when to response? And who should be on board? Crisis management is considered as a strategic challenge and its solutions demands the process of setting goals, scanning the environment, formulating and evaluating strategy, executing strategy. Notwithstanding this, it was evident from the extant study that crisis management need instantaneous measures and makes it extremely difficult for marketers to stick to the process. For example when the shopping hall that Melcom Ghana Limited was operating from collapsed, the management of company quickly assured the general public that compensation packages will be offered to the bereaved families and also for the survivors of the disaster. The Chief Operating Officer of Melcom, Mr Arvinder Singh, opinesMelcom was in talks with structural engineers to certify the state of buildings housing shops that were not built by them. http://www.gbcghana.com/index.php?id=1.1140330. Insightfully, the extant study posits, using ample time to response to a crisis exacerbate the potential damage not only to the marketers’ bottom line and image but also to regional trade block. For instance, the Euro Zone leaders did not respond swiftly to the Euro Zone crisis and that has endangered the stability of the Union. According to the World Bank Chief, Robert Zoellick, “European leaders managing the sovereign debt

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crisis have done too little, too late, forewarning Europe risks losing influence”. http://economictimes.indiatimes.com/news/international-business/europe-doing-too-little-too-late-in-crisis-robert-zoellick-world-bank-chief/articleshow/14210621.cms With fast moving technology the implication will be that, stakeholders have multiple channels of crisis knowledge, thus inability and, or failure on the part of marketers to decisively confronts the issues in a timely fashion will only grow exponentially the perceptions of stakeholders and has the potential to endanger the trust they repose in the marketer. The findings indicates less ambiguity in communication is critical in influencing stakeholders perceptions in event of crisis, and these shape the assessment of the marketers’ image, stakeholders affective response and future dealings with the firm. This means presenting inspiring communication about the business has the potential to amend the misconceptions stakeholders might hold about the firm in event of crisis. 4.4: Constraints in Managing Crisis The extant study asserts with non existence of widely agreeable laid down measures to combat crisis effectively and efficiently; what might exist could be unfastened package of guiding principle including steps to reduce the bad effects of it. Thus strengthening the position that same methods cannot be applied to different crisis situation and it behooves on marketers to constantly re-engineer the modalities of attaining results to quickly identify danger signals and attached as and when they emerge. Uncertainties, poor handling of market intelligence, ambiguous communication, shifting of corporate goals, businesses caught up in party politics, poor planning among others have contributed to the difficulties in handling crisis effectively. Accessing relevant information in a timely fashion to resolve crisis could be problematic; where marketers can do things right by applying all accessible relevant information and the best promising judgment, the decisions could jeopardize the situation. 4.5: Relationships Connecting Previous Studies and Extant Study

The two previous studies review and the current study all had varied goals in their presentations. The first previous study also found that financial crisis did not only affect marketing budget and contracted marketing interventions in an attempt to build value for stakeholders and the business but also affected marketing goals as well; and the second previous study posits marketers refuse to review openly crisis scenario These, unfortunately, the current study could not corroborate. The second preceding paper opines post business crisis offers a valuable opportunity to amend the driving factors of crisis and this was corroborated by the extant study when it asserts that crisis has some positive impact by allowing marketers to have myriad learning opportunities at the marketplace.

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It is significant to opine that the extant study has some theoretical implications, that is, it has expanded the existing body of knowledge on crisis management in business globally. 4.6: Limitations of The Study

If the different research design had been adopted the findings could probably have been different. For instance, if survey with questionnaire was employed to collect information, it is most likely the findings could have been different. This however was impossible as a result of scarce marketable resource like time and cash. The study areas covered, people and places contacted, examples used, and secondary materials read were inadequate. As a result of the above limitations, oversimplifying the results is most likely to be challenging and that could serve as a guideline to future study in the area. New concepts could be studied to corroborate or contrast the extant study’s findings.

Chapter 5: Conclusion

The study aimed to underline the causes of crisis, the pros and cons of crisis, and the need for managing crisis effectively in an attempt to fractionally plug the cracks in the preceding studies. In this regard, it is noticed that like competition, crisis is an occurrence that marketers’ can anticipate and strategically offer responses to reduce its unwanted effects. the study found among other factors that corporate crisis are driven by low quality products and services delivered to customers as against what the business has promise and this could significantly affect the mission of the business. Industrial misfortune, weak business communication, labor strikes global marketplace variables, macro economic variables and technological breakdown could all be contributory factors in creating business crisis. Business crisis if not managed effectively has the capability to make business unattractive to stakeholders since cost is most likely to increase exponentially, and this could let the business lose its strong customer base to competition. There could be cases where crisis would make the marketer recall for product on the market and this invariably will affect the profit ability of the business. Thus injuring the corporate reputation and this requires colossal sum of investment to repair the damage made to image. Employees will equally not be enthused when crises are not managed effectively and with low employee morale, delivery of excellent customer care will be affected and eventually resulting bad word mouthing of the brand. Statutory bodies charged with regulating the business at the marketplace might direct attention to the marketer’s operations if concerns are raised beyond certain point and revoking business license could be imminent. Crisis could create political and economic instability in an economy and the general public will not be spared with the recession. Notwithstanding the negative effects of business crisis, there is a potential merit in crisis, that covert bottlenecks are unlock and lead to strong brainstorming on the part of

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the marketer to reverse the situation thus creating fantastic learning opportunities to businesses. It is imperative to assert that there is the need for differing crisis response to differing crisis situations, since same methodology is most likely to be ineffective if applied to differing crisis causes. And the response has to be in a timely fashion to avoid exacerbating to issue. This has proved to be a major bane of managing crisis. Combating business crisis must be incessant efforts and once strategy to deal with crisis is accommodative, expense for the marketer will be high. Crises symbolize distinctive source of image threat, and crisis nature, account and previous affiliation reputation permit marketers in anticipating stakeholders’ perception and reactions to crisis and appreciating the full facts of crisis offers marketers the opportunity to predict the degree of reputational threat crises pose. It is imperative to underscore the point that no single individual can neither prevent business crisis from occurring, nor predict correctly at all times how, when, and where they will happen, businesses can espouse a system for effectively managing them. Anything short of this implies guaranteeing that the business is ill-prepared to manage and recuperate efficiently from that. It behooves on marketers to ask great questions like what can/cannot be avoided and be in readiness. And more imperatively, marketers need to be equipped with crisis causative variables and how that could directly and indirectly impact on their marketing objectives and their mission and understand differing strategies that could be applied in differing scenarios to manage crisis which is extremely difficult to establish what, when, where, how, crisis could happen. The ability to manage crisis effectively will determine your business sustainability. Further investigations could be conducted process of managing business crisis, crisis and its impact on change management to either corroborate, contrast or unlock new ideas in the area of crisis management in business. 5.1: Recommendation

This study recommends variables of cushioning businesses into robust position to respond to, and recover from crisis. Firstly there is the need to create crisis team ready to walk the business through crisis time and it behooves on top management to institute mechanisms to pull together a crisis team. In view of this, identifying key members on a emergency management team on the bases of their skills, readiness in serving, including personalities with someone in charge to convene the team in event of crisis. This team needs to reach each other all day round. The emergency response team needs to be in charge for re-establishing authority, power and communications during a crisis while gathering much intelligence as probable. Additionally, businesses need to have systemic process to guarantee staff and mechanisms respond appropriately to emergency as and when it happens. The greater standardized modalities that are in place to orientate staff, the less likely the business confront confusion and chaotic scenarios in crisis time. A strategic crisis management road map needs to be incorporated into broad strategic corporate business plan by marketers. There is the need to recall product from the

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market in event where consumables are contaminated to protect consumers’ health and this should be followed by a public statement to reassure stakeholders that measures are being rolled out to ensure high quality standards of products. Recalled contaminated products from the market, need to be destroyed openly, with the view to avoiding their entry into the market again. Stakeholders’ protection from impairment, physical and psychological needs have to be prioritized and this demands not only, are they informed in a timely fashion on what to do in event of a crisis, but also they need to be reassured of remedial actions taken to guarantee their safety. Crisis managers thereafter need to address marketers’ image. Reminding stakeholders of historical fantastic actions of the firm will be crucial in offsetting the ill-conceived image stakeholders have about the marketer, and there is the need to re-strategize to generate good will. There is the need for preserving and protecting business image to sustain its market position. This requires for the identification of threats and dealing with them when they emerge in a timely fashion. Thus it is recommended crafting and executing crisis response map, comprehensive quality assurance mechanisms, fantastic communication processes among others. Materials, apologies and, or symbolic forms of relieve to the affected stakeholders for example will not be bad and praising them for their patience throughout the crisis time with the view to improving relationships and drawing compassion from being victims of the crisis. At certain times denying that crisis exist reduce negativity, if people admit nonexistence of crisis. Regulating communication and re-strategizing could prove effective in reducing the negatives. And expressing concern has the potential to reduce negativities. Furthermore, a forceful marketing campaign needs to be launch to recuperate customer confidence and market power. Vehement response to crisis situation by the marketer creates impressions in stakeholders mind that crisis impact perhaps is worse than thought, thus crisis response need to be diplomatic. Marketers’ information gathering systems need to be crisis responsive for instance auditing marketing functions, offerings, stakeholders to identify potential business threats. This has the potential of making the marketer responsive to the business environment, and be more critique and demonstrate probing questions. Marketers need to gain control over microenvironment in particular to pick and check crisis signal in time before issues are out of control. In a technological world, it is crucial to exploit communication and media landscape, response moment is decisive in curtailing image damage and brand. Usually the appropriate channel in addressing vulnerabilities ensuing responses is the business permanence road map. Eventuality planning is critical to eventual accomplishment in managing opportunities and threats of businesses and since market variations exist in differing market globally, it is imperative, response plans are fashioned out for geographical marketplace and recognizing local inputs. Couple with this marketer needs to delegate response responsibilities to people with the requisite expertise with the view of reducing risk and damage.

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Strategic monetary and fiscal plans such as reducing public debt, providing liquidity and capital to banks need to be fashioned out to support distressed businesses and avoid funding constraints that contracts the expansion of businesses. Managers of economies (Governments) need not progress quickly move with aggression to contract expense since that has the capability to endanger recovery plans and worsen the business environment for entrepreneurs.

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