Crisis planning in the nonprofit sector: Should we plan for something bad if it may not occur?

Southern Business Review, Spring 2002 by Spillan, John E, Crandall, William

An interesting question emerges during the discussion of crisis management. Why is the concern for crisis events in some organizations higher than in others? Is the crisis event the catalyst for concern, or is it merely a consequence of having a management team that considers planning for crisis events to be an integral part of business strategy? An assortment of management literature indicates that organizations are just naturally reactive concerning potential future crises (Mitroff et al., 1989; Pearson & Mitroff, 1993; Penrose, 2000; Shrivastava, 1993). The crisis event may be the only incentive for a business to initiate the planning process to prevent another occurrence of the same or similar events.

Even though no organization is exempt from being threatened by some form of major crisis, organizations showing heightened awareness and concern for crisis events may establish crisis management teams. Leading to this concern and team formation could be a catastrophic event that may be the stimulus necessary to force organizations to prepare for potential future crisis events (Crandall, McCartney, & Ziemnowicz, 1999).

This thinking leads to an important question about management's concern for a crisis event. Is it the formation of the crisis management team or the occurrence of the event that causes managers to be concerned? A crisis management plan does not need to precede an event. It can be created without an event occurring. A crisis event could occur and the organization may still not establish a team. This study suggests that it is the independent crisis events) that generates) the concern among managers, not the formation of the crisis team. The rationale for the development of a crisis team can be very simple and may be explained in two ways: a) the crisis may cause the organization to react to the events) and implement damage control and corrective action. The events) will create a process of organizational learning causing management to develop contingency plans that set forth actions that can either prevent or respond to a future crisis event or, b) an organizational development process that focuses on continual improvement can recognize the organizational vulnerability and begin cultivating a culture that focuses on crisis planning, which leads to the establishment of a crisis management team.

Thus, the extant research has shaped the research question asked and the two hypotheses proposed in this study. Research Question: What prompts managers of NPOs to plan for crisis events? Hypothesis I-Members of NPOs with crisis management teams will show a higher concern for crisis events than will members of organizations without such teams.

Hypothesis 2-Members of NPOs who have experienced a particular crisis in their organization will show a higher degree of concern for that crisis than organizational members who have not experienced that crisis. Methodology

Survey Instrument

A survey instrument was adapted from one used by Crandall, McCartney, and Ziemnowicz in an earlier study (1999). The instrument is based on the crisis events listed in Figure 2. Respondents were asked to rate their degree of concern for each crisis event using a scale with one indicating a low degree of concern and five indicating a high degree of concern. In addition, the survey asked if the crisis in question had actually occurred at the respondent's organization within the past three years. Respondents were also asked if their organizations had a crisis management team.