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Spring Journal

Volume 32, Issue 1

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In the wake of tragic events of New York City’s World Trade Center terrorist attacks, city officials were faced with the daunting task of not only responding to the most horrific event in US history, but also to simultaneously manage these response efforts and guide New York to a quick recovery.

Information Methods Incorporated (IMI) was chosen by New York City to facilitate these efforts, under the Mayor’s Office of Emergency Management’s (OEM) leadership, across numerous agencies, vendors, and contractors. As CEO and chairman of IMI, I immediately reached out to a network of vendors to develop and implement an action plan within the next 36 hours. Each participating vendor and contractor would have a specific role or service that would be necessary for a successful delivery and recovery. Our company would provide the leadership and direction required to meet the city’s demanding timetable.

This article aims to underline the need for crisis management planning in companies involved in crisis prone business activities like coastal shipping. For this reason it uses the case of the Express Samina Shipwreck, which was the most serious nautical accident that Greece had experienced over the last 35 years. After a brief literature review of organizational crises, the article presents and analyzes the crisis preconditions, the triggering event, the company’s response and the stakeholders’ reactions.

The mistakes that were committed are pointed out in order to draw some useful conclusions regarding crisis management and identify several managerial implications.

A virus has damaged the network irreversibly. Weather conditions force an area evacuation. The building has caught fire. No matter what the crisis, preparing paychecks and handling payables is one of the last things organizations should worry about in a disaster situation. Amid the paper tsunami of invoices and statements, payroll and accounts payables, such processes take a toll on many businesses in even normal circumstances. To ensure no disruptions of payroll and payables, many companies large and small are turning to Web-enabled outsourcing services to send payment files electronically for secure printing, processing and mailing.

Although essential to keeping a company up and running, printing and distributing payroll and payables are cumbersome tasks, and what’s more, they are not a core competency for most organizations.

How much does your organization invest in check and envelope stock for payroll, statements, invoices and other financial documents? What are the costs and time spent on stuffing items into envelopes? What do you spend on equipment maintenance and printing? How much do you spend on postage and other related mailing costs for these advices?

The disastrous events of Sept. 11, 2001 were a tragic and devastating national calamity. Those deliberate acts of terrorism were horrifying to everyone and affected all of us. Those of us in the disaster recovery field shared many of the reactions and emotions of the public, and in some cases had close personal and professional connections to those directly involved in these acts of terrorism.

However, those of us in the disaster recovery field also had a unique and practical perspective on the tragedies. Due to our unique occupational psychosis, we tend to think about the methods and practices of disaster recovery preparation, emergency operations, business continuity systems, and implementation of recovery plans. In particular, disaster recovery readiness in both public and private sectors is directly connected to local and national response to such horrible disasters. The thinking of disaster recovery experts is particularly insightful, helpful to other disaster recovery planners, and important for the general level of preparedness across the nation.

The risk assessment is done, the crisis management team is in place, plans have been developed for both continuity and recovery and all the business units have exercised their plans to perfection. Now the business continuity planner can sit back and relax with nothing to worry about. It’s all covered . . . or is it?

On Aug. 2, 2001, approximately half the banks in Norway had a digital disaster, losing card services, ATMs, Internet banking and automatic phone banking for three days.

The cause wasn’t torrential rain or widespread flooding. It had nothing to do with a power failure or a rampant computer virus. So how could something so widespread occur in the absence of a natural disaster in an industry where regulations demand exceptional disaster/continuity planning?

Give up? All were customers of the same vendor, who provided the banks with various computer services, including data storage. The vendor, implementing a project to install 288 new disks in its storage system, erroneously initialized 288 existing disks, crashing the entire system.

With every passing year, businesses become more connected, more intertwined – and more dependent on vendors to provide the highest quality products and services at exactly the right time. Anything less may substantially and adversely impact the bottom line of a business, exactly what business continuity planners spend entire careers trying to prevent. So what is the solution?