MGMT 4305 - Chapter 12

Chapter 12--Crisis Leadership and the Learning Organization Key
 

1. A crisis is a high-probability, low-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.
FALSE

2. Technological advances have diminished organizations' attempts to control crisis communications.
TRUE

3. Crises come in many forms including succession crisis, product failures, human error disasters, and sexual harassment.
TRUE

4. Effective crisis management depends on planning and people.
TRUE

5. A pre-crisis plan is the best way to lessen the negative consequences of any crisis.
TRUE

6. A pre-crisis plan is the first step of any crisis management program.
TRUE

7. Pre-crisis planning entails three components that every organization should address when putting together a comprehensive crisis response plan: (1) appointing a crisis leader, (2) creating a crisis response team, and (3) creating a risk assessment team.
FALSE

8. In pre-crisis planning, it is important that crisis management responsibilities be divided and spread across the organization without a central command to avoid turf wars and conflict.
FALSE

9. One of the primary duties of the crisis leader includes requiring individuals or departments to keep logs of complaints or incidents.
TRUE

10. In most small organizations, the crisis management team is led by a senior-level executive.
FALSE

11. Experience reveals that dividing the duties of crisis management throughout the organization without a central command is often more successful than the team approach.
FALSE

12. Your leader has appointed you to supervise the risk assessment part of precrisis planning, and, therefore, your first step in the five step process is to assess and rank risks.
FALSE

13. Risk assessment is a common tool used in crisis planning.
TRUE

14. Rational analysis and planning is a tool that helps leaders prevent or respond to crises through decision-making skills based on possible outcomes or crises.
FALSE

15. The first step in the risk assessment process is risk reduction.
FALSE

16. SWOT analysis is used in the risk reduction step in the risk assessment process.
TRUE

17. It is generally believed that within an hour of becoming aware that a crisis situation may exist, company officials must be prepared to issue an initial statement to the media and other key stakeholder groups.
TRUE

18. Developing a bunker mentality is a recommended strategy for senior leaders to use when dealing with a crisis.
FALSE

19. It is generally believed that it does make a difference whether the company representative or spokesperson is a senior-level manager or someone at a lower level of responsibility.
TRUE

20. One of the short-term benefits of developing an effective crisis communication system with employees is that the organization will have won over the confidence, loyalty, and commitment of the employees, who appreciate being involved and listened to during a crisis.
FALSE

21. A press release is a printed statement that describes how an organization is responding to a crisis and who is in charge.
TRUE

22. It is critical during a press conference to involve technical specialists to provide more expert and detailed background information.
TRUE

23. In the aftermath of a crisis, it is recommended that top management form a crisis evaluation team to evaluate the organization's effectiveness in managing the crisis.
FALSE

24. A learning organization is more appropriate for a stable environment where change is slow and incremental.
FALSE

25. A learning organization is one that is skilled at creating, acquiring, and transferring knowledge, and at modifying behavior to reflect new knowledge and insights.
TRUE

26. In terms of a learning organization, employees who engage in continuous learning activities are more likely to be a source for their organizational and competitive advantage.
TRUE

27. Explicit knowledge is the instinct and intuition that an experienced practitioner possesses.
FALSE

28. Organizational learning involves external and internal sources.
TRUE

29. Discontinuous change occurs when anticipated or expected changes bear no resemblance to the present or the past.
TRUE

30. The traditional organization is based on the bureaucratic model that emphasizes a command-and-control structure, decentralized decision making, highly formalized systems, specialized tasks, and an adaptive culture.
FALSE

31. The traditional organization fosters competition among individuals.
TRUE

32. The mindset of leaders in a learning organization is that there is a "right way" to do things.
FALSE

33. The learning organization embraces the idea that people will learn if encouraged to face challenges, experiment, fail, and reflect on their experiences.
TRUE

34. As related to organizational culture, researchers are finding that the higher the level of learning and knowledge acquisition, the greater the level of financial performance, but the lower the level of nonfinancial performance.
FALSE

35. Some experts have argued that failed efforts to create a learning organization should be, at least in part, blamed on lack of resources.
FALSE

36. Leaders in learning organizations face a single challenge of creating flexible and adaptive organizations.
FALSE

37. Leaders in learning organizations face the dual challenge of encouraging creativity and flexibility and maintaining organization-wide standards that emphasize efficiency and accountability.
TRUE

38. The purpose of using benchmarking is to imitate competitors' best practices which leads to a competitive advantage for a company.
FALSE

39. Encouraging systems thinking in a learning organization means that boundaries are increased with other companies.
FALSE

40. Benchmarking yields a comparative advantage by allowing a company to imitate the best practices of others.
FALSE

41. Learning is more likely to take place in an organization in which experimentation on a large scale is encouraged and permitted.
FALSE

42. One way to encourage experimentation is to create a sense of urgency in the organization.
TRUE

43. Encouraging systems thinking is a guideline for enhancing organizational learning.
TRUE

44. Creating a culture that rewards those who succeed, as well as occasionally rewarding those who fail, sends a message that the organization encourages risk-taking.
TRUE

45. Which of the following is (are) crises with which organizations may need to respond?
A. natural disasters.
B. terrorist attacks.
C. human error disasters.
D. executive misconduct.
E. all of the above

46. Strategic crisis leadership requires all of the following EXCEPT:
A. integrating crisis management into the strategic management process so it remains a regular part of the overall strategy-evaluation process.
B. using environmental monitoring techniques to identify events that could trigger crises in the future.
C. identifying emerging patterns or trends in the regulatory environment, competitive landscape, and social environment.
D. establishing a culture that embraces crisis awareness and preparation as a way of life.

47. Emerging trends in the current business environment that make crisis management especially important among the skills of leadership include:
A. technological advances.
B. the economic downturn.
C. the overall desirability of learning about risk matrices.
D. all of the answers are correct

48. An effective crisis management plan is one that is:
A. supported by training and periodic drill sessions.
B. coordinated and controlled across levels and units of the organization.
C. upgraded frequently.
D. all of the answers are correct

49. The best way to mitigate the negative consequences of any crisis is by:
A. top management support.
B. a pre-crisis plan.
C. a capable and supportive staff of employees.
D. all of the answers are correct

50. Pre-crisis planning entails all of the following components EXCEPT:
A. appointing a crisis leader.
B. assessing risk.
C. analyzing the environment.
D. creating a crisis response team.

51. Pre-crisis planning
A. allows leaders and followers to develop a mental detachment from the issue.
B. allows leaders and followers to make good decisions under low pressure circumstances.
C. is the best way to eliminate the negative consequences of a crisis.
D. allows leaders and followers to make good decisions under severe pressure in the most difficult circumstances.

52. The primary duties of the crisis leader may include activities such as:
A. coordinating the activities of the crisis management team to ensure that the members work well together.
B. requiring individuals or departments to keep logs of complaints or incidents.
C. monitoring customer and employee complaints and behavior.
D. all of the answers are correct

53. A crisis response team should:
A. draw on critical internal resources rather than external resources.
B. involve a good mix of representatives from all sectors of the organization.
C. not emphasize diversity due to the critical nature of crises and the likelihood of disagreement with diverse individuals.
D. all of the answers are correct

54. Which of the following is NOT one of the steps in the risk assessment process?
A. risk reduction
B. risk identification
C. crisis management
D. risk analysis

55. The crisis leader shares the risk chart created during risk assessment and ranking during the ____ step of the risk assessment process.
A. risk identification
B. risk reduction
C. crisis management
D. crisis prevention

56. The best gauge to determine an organization's readiness to respond to a crisis is how it rates according to which of the following factors?
A. awareness and access to crisis management information
B. readiness for a quick response
C. effective communication plan in place
D. all of the answers are correct

57. A risk assessment process begins with a "what-if" scenario analysis which asks which of the following questions?
A. What could happen?
B. Where are we vulnerable?
C. How much will it cost the company?
D. A and b.
E. None of the above

58. It is generally believed that within ____ of becoming aware that a crisis situation may exist, company officials must be prepared to issue an initial statement to the media and other key stakeholder groups.
A. 24 hours
B. 30 minutes
C. an hour
D. 48 hours

59. Which of the following is NOT one of the key tenets of crisis leadership, according to some experts?
A. work with your crisis management team
B. play not to lose and develop a bunker mentality
C. stay engaged and lead from the front
D. focus on the big picture and communicate the vision.

60. All of the following are questions that often emerge after a crisis EXCEPT:
A. What happened?
B. What are you going to do to ensure it never happens again?
C. When did it happen?
D. How did it happen?

61. A ____ is a printed statement that describes how an organization is responding to a crisis and who is in charge.
A. press release
B. crisis bulletin
C. press kit
D. crisis release

62. The press kit:
A. is a package of information about a company.
B. should include a specific press release related to the current incident.
C. should be distributed to the media when a crisis breaks.
D. all of the answers are correct

63. Effective crisis communication requires:
A. providing some detail regarding how the organization will avoid a repeat in the future.
B. assembling all stakeholders together and presenting the same message.
C. keeping the crisis leader informed about how the organization is handling the crisis.
D. all of the answers are correct

64. In the aftermath of a crisis, top management should launch an evaluation that pertains to:
A. how effectively the crisis team and the crisis management plan performed.
B. what worked least in mitigating the problem.
C. how effectively the organization handled victims and family members.
D. all of the answers are correct

65. In his book, The Fifth Discipline, Peter Senge makes a compelling case that an organization's survival is linked to its:
A. top management.
B. employees' dedication.
C. ability to learn and adapt.
D. all of the answers are correct

66. A ____ organization is one that is skilled at creating, acquiring, and transferring knowledge, and at modifying behavior to reflect new knowledge and insights.
A. traditional
B. learning
C. diverse
D. dynamic

67. Under which of the following conditions is a learning environment most needed?
A. a stable environment where change is slow and incremental.
B. a rapidly changing environment where employee skills and abilities remain unchanged.
C. an environment with increasing pressure for employees to upgrade their skills and where there are no guarantees of job security
D. in a rapidly changing environment with increasing globalization, competition, and technological shifts.

68. Which of the following is (are) internal sources of organizational learning?
A. customers
B. competitors
C. Academic publications
D. employees

69. Organizational knowledge:
A. is developed through training sessions.
B. is both tacit and explicit.
C. cannot exist without the emphatic sponsorship of top management.
D. all of the answers are correct

70. Explicit or tacit knowledge is:
A. highly personal.
B. strongly rooted in action.
C. the instinct and intuition that an experienced practitioner possesses.
D. expressed in a system of rules.

71. Tacit knowledge is acquired from
A. manuals regarding an organization's culture.
B. databases acquired from other sources.
C. intuition based on experience.
D. genetics

72. Which of the following is a characteristic of a traditional organization?
A. flat horizontal structure
B. personal and group networks of free, open exchanges with no filters
C. centralized decision making
D. loose, flexible, and adaptive roles

73. Which of the following is a characteristic of a learning organization?
A. strategy is formulated from the top and passed down
B. formal systems of communication tied to the vertical hierarchy with lots of filters
C. stable environment
D. loose, flexible, and adaptive roles

74. All of the following are characteristics of traditional organizations EXCEPT:
A. adaptive culture that encourages continuous improvement and change.
B. stable environment.
C. vertical structure.
D. rigid culture that is not responsive to change.

75. All of the following are characteristics of learning organizations EXCEPT:
A. flat horizontal structure.
B. centralized decision making.
C. adaptive culture that encourages continuous improvement and change.
D. strategy is a collaborative effort within the organization and with other companies.

76. The traditional organization is based on the bureaucratic model that emphasizes:
A. highly formalized systems.
B. a rigid, closed culture.
C. specialized tasks.
D. all of the answers are correct

77. In learning organizations:
A. the horizontal structure is constituted around functional specialities rather than work flows or processes.
B. few strict rules and procedures prescribe how things are done.
C. rewards are individualized.
D. all of the answers are correct

78. ____ change occurs when anticipated or expected changes bear no resemblance to the present or the past.
A. Acquisitional
B. Radical
C. Organizational
D. Discontinuous

79. Which of the following is NOT one of the guidelines for enhancing organizational learning?
A. broaden employees' scope of reference
B. encourage systems thinking
C. create a shared vision for learning
D. create a climate in which experimentation is encouraged

80. Benchmarking:
A. allows a company to imitate the best practices of others.
B. is a leader strategy.
C. yields a comparative advantage.
D. is not recommended to develop creative thinking skills.

81. The encouragement of systems thinking:
A. is a task of leaders who seek to enhance organizational learning.
B. has the best results in traditional organizations.
C. was a driving force in the 1980s, but has been largely discarded in favor of specialized thinking.
D. increases efficiency, but appears to deter creativity.

82. In creating a learning organization culture, there must be a culture which is conducive to individual and team learning which
A. has team learning.
B. encourages self-initiated activity.
C. does not need support from leaders.
D. uses a taskmaster approach to excel.
E. a and b

83. Which of the following should exist in a learning organization culture?
A. doing things right the first time without mistakes.
B. broadening employees' frames of reference to enhance learning.
C. sharing knowledge to encourage creative ideas.
D. providing employees opportunities to solve problems.
E. a and b

84. In a learning organization, incentives and rewards should be?
A. small to avoid inter-departmental competition.
B. large to encourage innovation and learning.
C. visible to others.
D. invisible, almost, unnoticeable, to avoid morale problems.
E. b and d

85. How is creative thinking and innovation encouraged in a learning organization?
A. encourage employees to consider possibilities that do not exist.
B. encourage employees to research and learn from some of the best in the industry.
C. provide large and visible rewards for successful ideas and innovations.
D. all of the above.

86. Explain why crisis leadership competence is an important consideration when hiring new leaders. 

Crises are inevitable. It is not a question of "if" a crisis will happen, but "when." A crisis can inflict severe damage to an organization if not properly managed. In a crisis, stock prices plummet and operating costs escalate, causing both short- and long-term financial losses. A crisis that is mismanaged can also damage an organization's reputation and diminish consumer confidence in the organization's mission, or in some cases can lead to its demise altogether. As the economy limps on and speculation of it sliding into a recession builds, the real prospect exists that many corporations are going to face a crisis of survival. Rising oil prices, the housing downturn, the subprime crisis, the credit crunch, and talk of possible inflation and recession are all ingredients that could stymie even the best-prepared CEOs.

87. Identify the benefits of pre-crisis planning. 

Pre-crisis planning buys you time. You are ready when a crisis strikes. Many organizations are presented with early warning signals of an impending crisis but fail to recognize and heed them. The problem is detecting the signals that warn of a crisis. It is for this reason that experts recommend pre-crisis planning for any size of business. Pre-crisis planning allows you to create systems and procedures for detecting signals that warn of an impending crisis before it happens. Effective pre-crisis planning leads to effective crisis management during and after a crisis.

88. Identify three key components of the pre-crisis planning phase. 

Three components to pre-crisis planning that every organization (large, small, for-profit, or non-profit) should address are: (1) appointing a crisis leader, (2) creating a crisis response team, and (3) assessing risk.

89. Describe the five-step process for crisis risk assessment. 

The five-step process for risk assessment consists of: (1) risk identification, (2) risk assessment and ranking, (3) risk reduction strategies, (4) crisis prevention simulations, and (5) crisis management. In step one, crisis team members begin by first identifying the worst-case incidents that could have severe consequences on people, the organization's financial position, or its image. This process is described as risk identification and results in the creation of a risk chart. Next, these incidents are analyzed and ranked. During the risk reduction step, the crisis leader shares the risk chart created during risk assessment and ranking with team members or larger audiences, and they begin debating and formulating strategies for countering each crisis or threat. The fourth step in the risk assessment process is crisis prevention. Here, tests and simulations are conducted to test employees under pressure. The fifth step of risk assessment is crisis management. A team is assembled and readied to respond in the event of a real crisis.

90. Describe the role of the CEO and communication in managing a crisis. 

The CEO must be out leading the charge before, during, and after a crisis. The CEO's involvement demonstrates to the public the seriousness with which the incident is viewed. Before a crisis, the CEO should be actively involved in pre-crisis planning. During a crisis, he or she cannot develop a bunker mentality. As mentioned in the chapter, the three key tenets of crisis leadership are (1) stay engaged and lead from the front, (2) focus on the big picture and communicate the vision, and (3) work with your crisis management team. During a crisis, the CEO must have answers to the following questions: What happened? How did it happen? What are you doing to address the crisis? And after the crisis, what are you going to do to ensure that it never happens again? For all of these things to happen, the organization must have in place a well-designed communication system and the leader must be an effective communicator.

91. List five or more attributes that can be used to describe the learning organization. 

·	Learning from mistakes and past experience
·	Learning from others
·	Systematic problem solving
·	Experimentation
·	Sharing knowledge
·	Strong leadership support

92. Distinguish between the traditional organization and the learning organization. 

The traditional, efficiency-driven organization has a bureaucratic structure (a tall pyramid), starting with the CEO at the top and everyone else functionally organized in layers below. Decision making is centralized at the top of the hierarchy, which controls and coordinates all functional units throughout the organization. To ensure reliable and predictable results, tasks are rigidly defined and broken down into specialized jobs. Strict formal rules and procedures for performing each task are enforced. Though repetitive, boring, and unchallenging, it is an efficient way to keeping the production line running smoothly. An elaborate formal system of reporting allows leaders to closely monitor work operations and maintain efficient, steady performance. This formal system is a powerful tool for controlling information and often acts as a filter in determining what information leaders decide to pass down to lower-level employees.

By contrast, in learning organizations the vertical structure is abandoned for a flat, horizontal structure. The horizontal structure is constituted around work flows or processes rather than functional specialties. To encourage innovation and creativity in meeting current challenges, learning organizations are designing tasks that are much looser, free flowing, and adaptive. Few strict rules and procedures prescribe how things should be done. The term organic has been used to describe this type of organization. Responsibility and authority are decentralized to lower-level workers, empowering them to think, experiment, create, learn, and solve problems at their level.

93. Describe the role of leadership in creating a learning organization. 

The learning organization represents a paradigmic shift in the approach organizations take to managing their internal and external relationships. In today's rapidly changing business environment, organizations must transform into active learning organisms or risk becoming extinct. To succeed, organizations must be proactive and anticipatory, which requires continuous improvement. Thus, the traditional organization model that emphasized efficiency and stability is being replaced by a model that is learning-driven and adaptable.

Leaders play a critical role in effecting this transformation. Without effective leadership from the top and throughout the organizational structure, it is hard to imagine how the learning organization can succeed. A shared vision and mission are the basis for the emergence of strategy in a learning organization, and this is the responsibility of leadership. Leaders can play a key role in enhancing organizational learning by encouraging creative thinking, creating a climate in which experimentation and risk taking are encouraged, providing incentives for learning and innovation, building confidence in followers' capacity to learn and adapt, encouraging systems thinking, and creating a culture conducive to individual and team learning.

94. Strategic crisis leadership is about a leader taking action in three key areas. What are these areas? 

Strategic crisis leadership requires a leader to: (1) use environmental monitoring techniques to identify events that could trigger crises in the future, (2) integrate crisis management into the strategic management process so it remains a regular part of the overall strategy-evaluation process, and (3) establish a culture that embraces crisis awareness and preparation as a way of life.

95. How has the Internet affected the way crises are perceived in our society today? 

The Internet allows millions to analyze and critique virtually every aspect of an organization's response to a crisis. Technologies such as e-mail, Web pages, and social networking sites are weapons for affected organizations and the outside world to use during a crisis. A crisis is instantly visible and viral with the potential to inflict terminal damage on the affected organization. In many cases, there is a minute-by-minute real-time analysis of the financial implications of the crisis by investors, customers, and analysts, as the Internet is linked with investment portfolios.

96. What are the main components of a precrisis plan? 

Pre-crisis planning entails three components that every organization (large, small, for profit, or non-profit) should address when putting together a comprehensive crisis response plan: (1) appointing a crisis leader, (2) creating a crisis response team, and (3) assessing risk.

97. The pre-crisis response plan requires the appointment of a crisis leader. Describe the responsibilities of this person. 

The primary duties of the crisis leader may include activities such as the following:

·	Requiring individuals or departments to keep logs of complaints or incidents
·	Monitoring customer and employee complaints and behavior
·	Identifying emerging patterns or trends in the regulatory environment, competitive landscape, and social environment
·	Coordinating the activities of the crisis management team to ensure that the members work well together

98. The best indicator of an organization's readiness to respond to a crisis is how it rates on five factors. What are these five factors? 

The best gauge to determine an organization's readiness to respond to a crisis is how it rates according to the following five factors:

1.	Quality of strategic crisis plan
2.	Awareness and access to crisis management information
3.	Readiness for a quick response
4.	Effective communication plan in place
5.	Effective crisis leadership

99. What is the appropriate role of an organization's top leadership during a crisis? 

The appropriate role for an organization's top leadership during a crisis is to adhere to the following three tenets: (1) stay engaged and lead from the front, (2) focus on the big picture and communicate the vision, and (3) work with your crisis management team.

100. What does it mean to say that organizational learning is a multilevel sharing process? 

Organizational learning is a multilevel process, bringing together individual, group, and organizational levels of analysis. It is dynamic, bridging the levels with specific mechanisms. It involves multiple learning processes (intuition, integrating, interpreting, and institutionalization) that allow learning to feed forward to the organizational level and feed back to the individual. The most successful learning organizations compound their advantage by encouraging employees at all levels to collect and share information across boundaries rather than hoarding it. This is facilitated through communication and information hubs that make knowledge sharing a way of life. In the end, one of the most important qualities for a learning organization to have is a strong culture that supports not just knowledge creation but its transfer across functional or divisional boundaries.

101. What factors account for the fact that the learning organization is described as more creative and innovative than the traditional organization form? 

To encourage innovation and creativity in meeting current challenges, learning organizations are designing tasks that are much looser, free flowing, and adaptive. Few strict rules and procedures prescribe how things should be done. The term organic has been used to describe this type of organization. Responsibility and authority are decentralized to lower-level workers, empowering them to think, experiment, create, learn, and solve problems at their level. Rather than responding to known challenges, employees are encouraged to create the future. People with maverick ideas are out-of-the-ordinary proposals are welcomed and given room to operate in a learning organization.

102. Strategic crisis leadership is about a leader taking action in three key areas. What are these areas? 

Strategic crisis leadership requires a leader to: (1) use environmental monitoring techniques to identify events that could trigger crises in the future, (2) integrate crisis management into the strategic management process so it remains a regular part of the overall strategy-evaluation process, and (3) establish a culture that embraces crisis awareness and preparation as a way of life.

103. How has the Internet affected the way crises are perceived in our society today? 

The Internet allows millions to analyze and critique virtually every aspect of an organization's response to a crisis. Technologies such as e-mail, Web pages, and social networking sites are weapons for affected organizations and the outside world to use during a crisis. A crisis is instantly visible and viral with the potential to inflict terminal damage on the affected organization. In many cases, there is a minute-by-minute real-time analysis of the financial implications of the crisis by investors, customers, and analysts, as the Internet is linked with investment portfolios.

104. Identify the benefits of pre-crisis planning. 

Pre-crisis planning buys you time. You are ready when a crisis strikes. Many organizations are presented with early warning signals of an impending crisis but fail to recognize and heed them. The problem is detecting the signals that warn of a crisis. It is for this reason that experts recommend pre-crisis planning for any size of business. Pre-crisis planning allows you to create systems and procedures for detecting signals that warn of an impending crisis before it happens. Effective pre-crisis planning leads to effective crisis management during and after a crisis.

105. What are the main components of a pre-crisis plan? 

Pre-crisis planning entails three components that every organization (large, small, for-profit, or non-profit) should address when putting together a comprehensive crisis response plan: (1) appointing a crisis leader, (2) creating a crisis response team, and (3) assessing risk.

106. The pre-crisis response plan requires the appointment of a crisis leader. Describe the responsibilities of this person. 

The primary duties of the crisis leader may include activities such as the following:

·	Requiring individuals or departments to keep logs of complaints or incidents
·	Monitoring customer and employee complaints and behavior
·	Identifying emerging patterns or trends in the regulatory environment, competitive landscape, and social environment
·	Coordinating the activities of the crisis management team to ensure that the members work well together

107. Describe the five-step process to crisis risk assessment. 

The five-step process for risk assessment consists of: (1) risk identification, (2) risk assessment and ranking, (3) risk reduction strategies, (4) crisis prevention simulations, and (5) crisis management. In step one, crisis team members begin by first identifying the worst-case incidents that could have severe consequences on people, the organization's financial position, or its image. This process is described as risk identification and results in the creation of a risk chart. Next, these incidents are analyzed and ranked. During the risk reduction step, the crisis leader shares the risk chart created during risk assessment and ranking with team members or larger audiences, and they begin debating and formulating strategies for countering each crisis or threat. The fourth step in the risk assessment process is crisis prevention. Here, tests and simulations are conducted to test employees under pressure. The fifth step of risk assessment is crisis management. A team is assembled and readied to respond in the event of a real crisis.

108. The best indicator of an organization's readiness to respond to a crisis is how it rates on five factors. What are these five factors? 

The best gauge to determine an organization's readiness to respond to a crisis is how it rates according to the following five factors:

1.	Quality of strategic crisis plan
2.	Awareness and access to crisis management information
3.	Readiness for a quick response
4.	Effective communication plan in place
5.	Effective crisis leadership

109. What is the appropriate role of an organization's top leadership during a crisis? 

The appropriate role for an organization's top leadership during a crisis is to adhere to the following three tenets: (1) stay engaged and lead from the front, (2) focus on the big picture and communicate the vision, and (3) work with your crisis management team.

110. What is the difference between a press release and a press kit? 

A press release is a printed statement that describes how an organization is responding to a crisis and who is in charge. A press kit is a package of information about a company, including names and pictures of its executives, a fact sheet, and key milestones in the company's history. In the event of a crisis, the last item included in the press kit is a specific press release related to the current incident.

111. List five or more attributes that can be used to describe the learning organization. 

·	Learning from mistakes and past experience
·	Learning from others
·	Systematic problem solving
·	Experimentation
·	Sharing knowledge
·	Strong leadership support

112. Distinguish between the traditional organization and the learning organization. 

The traditional, efficiency-driven organization has a bureaucratic structure (a tall pyramid), starting with the CEO at the top and everyone else functionally organized in layers below. Decision making is centralized at the top of the hierarchy, which controls and coordinates all functional units throughout the organization. To ensure reliable and predictable results, tasks are rigidly defined and broken down into specialized jobs. Strict formal rules and procedures for performing each task are enforced. Though repetitive, boring, and unchallenging, it is an efficient way to keeping the production line running smoothly. An elaborate formal system of reporting allows leaders to closely monitor work operations and maintain efficient, steady performance. This formal system is a powerful tool for controlling information and often acts as a filter in determining what information leaders decide to pass down to lower-level employees.

By contrast, in learning organizations the vertical structure is abandoned for a flat, horizontal structure. The horizontal structure is constituted around work flows or processes rather than functional specialties. To encourage innovation and creativity in meeting current challenges, learning organizations are designing tasks that are much looser, free flowing, and adaptive. Few strict rules and procedures prescribe how things should be done. The term organic has been used to describe this type of organization. Responsibility and authority are decentralized to lower-level workers, empowering them to think, experiment, create, learn, and solve problems at their level.

113. What does it mean to say that organizational learning is a multilevel sharing process? 

Organizational learning is a multilevel process, bringing together individual, group, and organizational levels of analysis. It is dynamic, bridging the levels with specific mechanisms. It involves multiple learning processes (intuition, integrating, interpreting, and institutionalization) that allow learning to feed forward to the organizational level and feed back to the individual. The most successful learning organizations compound their advantage by encouraging employees at all levels to collect and share information across boundaries rather than hoarding it. This is facilitated through communication and information hubs that make knowledge sharing a way of life. In the end, one of the most important qualities for a learning organization to have is a strong culture that supports not just knowledge creation but its transfer across functional or divisional boundaries.

114. What factors account for the fact that the learning organization is described as more creative and innovative than the traditional organization form? 

To encourage innovation and creativity in meeting current challenges, learning organizations are designing tasks that are much looser, free flowing, and adaptive. Few strict rules and procedures prescribe how things should be done. The term organic has been used to describe this type of organization. Responsibility and authority are decentralized to lower-level workers, empowering them to think, experiment, create, learn, and solve problems at their level. Rather than responding to known challenges, employees are encouraged to create the future. People with maverick ideas are out-of-the-ordinary proposals are welcomed and given room to operate in a learning organization.

115. Describe the role of leadership in creating a learning organization. 

The learning organization represents a paradigmic shift in the approach organizations take to managing their internal and external relationships. In today's rapidly changing business environment, organizations must transform into active learning organisms or risk becoming extinct. To succeed, organizations must be proactive and anticipatory, which requires continuous improvement. Thus, the traditional organization model that emphasized efficiency and stability is being replaced by a model that is learning-driven and adaptable.

Leaders play a critical role in effecting this transformation. Without effective leadership from the top and throughout the organizational structure, it is hard to imagine how the learning organization can succeed. A shared vision and mission are the basis for the emergence of strategy in a learning organization, and this is the responsibility of leadership. Leaders can play a key role in enhancing organizational learning by encouraging creative thinking, creating a climate in which experimentation and risk taking are encouraged, providing incentives for learning and innovation, building confidence in followers' capacity to learn and adapt, encouraging systems thinking, and creating a culture conducive to individual and team learning.

116. After a recent plane crash, the CEO pays for all the family or close friends of the victims to come to a central location and provides them with counseling services, support, and accommodations. Which guideline to effective communications is the CEO adhering?

a.	be present
b.	don't "spin"
c.	communicate plan of action
d.	be sensitive with affected parties
e.	avoid conflicting messages
f.	show a plan for how you will avoid a repeat in the future
g.	don't make excuses for the leader
h.	go the extra mile
i.	take credit without being self-absorbed
j.	be honest and straightforward with the media

D

117. One of the largest airlines in the country is in negotiations with the pilot, flight attendant, and mechanic unions to discuss how a bankruptcy might be adverted. After a day-long conference between the CEO of the airline and the heads of the pilot, flight attendant, and mechanic unions, all four leaders take time to talk to the media together. Which guideline of effective communications are these leaders concerned with?

a.	be present
b.	don't "spin"
c.	communicate plan of action
d.	be sensitive with affected parties
e.	avoid conflicting messages
f.	show a plan for how you will avoid a repeat in the future
g.	don't make excuses for the leader
h.	go the extra mile
i.	take credit without being self-absorbed
j.	be honest and straightforward with the media

E

118. A CEO is taking the day off to spend with his family; however, his secretary calls his cell phone to tell him that there is a major crisis at work and no one knows what to do. The CEO decides to go to the office to see for himself. Which guideline to effective communications is the CEO adhering?

a.	be present
b.	don't "spin"
c.	communicate plan of action
d.	be sensitive with affected parties
e.	avoid conflicting messages
f.	show a plan for how you will avoid a repeat in the future
g.	don't make excuses for the leader
h.	go the extra mile
i.	take credit without being self-absorbed
j.	be honest and straightforward with the media

A

119. Jane works at a company in which employees who make mistakes are given verbal and written reprimands. The jobs are also clearly defined and employees are not allowed to deviate from the standard operating procedures. Which of the following types of organizations does Jane work at?

a.	traditional
b.	learning

A

120. Jim works in an organization where management lets the employees handle routine decisions. His managers are always helpful and offer encouragement and ways to improve when needed. Jim works in which of the following types of organizations?

a.	traditional
b.	learning

B

121. Find out if your college or university has a pre-crisis plan. If you find one, read and critique it for its effectiveness and present your findings to your classmates. If there is none, present an argument for having one. 

Students' answers will vary.

122. Identify someone who has been or is part of a crisis prevention and management team, preferably someone on your campus's crisis prevention and management team. Ask him or her to describe the makeup and functioning of this team. 

Students' answers will vary.

123. Using your college or university as a reference, identify five risk areas that could result in crisis if nothing is done now. Recommend a risk reduction plan or strategy that can help your school avert or deal with a crisis for one of these risk areas. 

Students' answers will vary.

124. Think of a leader whom you have observed in a crisis situation, either in person or on TV. Critique the leader's handling of the crisis using the text discussion as your guide. 

Students' answers will vary.

125. Looking at Exhibit 12.3 from your book, explain whether where you work or have worked is more of a traditional organization or a learning organization. 

Students' answers will vary.

126. Describe why a senior leader's physical presence is critical during a crisis. 

An organization's degree of preparedness for a potential crisis depends upon senior leaders and other responsible personnel. When there is a crisis, employees will seek guidance from company senior leaders as to how business operations will continue and ways to cope with the situation.

127. What are the purpose and benefits of creating a comprehensive crisis response plan before a crisis happens? 

A comprehensive crisis response plan based on risk analysis indicates who is in charge of making key decisions, who is on the team and what their roles and responsibilities are, who is to respond to media inquiries, how the plan will be executed, and what other employees are required or not required to do or say. This plan can mean the difference between survival and the total demise of an organization. The benefits of a pre-crisis response plan are obvious¾faster response time, better judgments, ready and available resources, fewer costly mistakes, less panic, and quicker resolution of the crisis.

128. What advice would you give to a leader who wants to improve his or her organization's communications function so that it is more effective during a crisis? 

Students' answers will vary.

129. How important to an organization is internal (employee) communication during a crisis? 

Investing time and other resources in developing an effective crisis communication system with employees has significant short- and long-term benefits. In the short term, well-informed employees will assist the organization in presenting the facts to the outside world. Also, employees, even those of the lower levels of the organization, may have excellent insight on the incident and valuable suggestions on solution alternatives. Their immediate input may provide the pathway to a quick recovery.

In the long term, the organization will have won over the confidence, loyalty, and commitment of the employees, who appreciate being involved and listened to during the crisis. Employees' sense of belonging and self-worth is enhanced, and a culture of teamwork and cohesion is created.

130. What message does it send when the organizational culture encourages employees to view mistakes/problems as opportunities for improvement rather than reasons to blame or punish those involved? 

Creating a culture that rewards those who succeed, as well as occasionally rewarding those who fail, sends a message that the organization encourages risk-taking. If employees realize that mistakes or problems are viewed by leaders as a symptom of poor performance, they tend to avoid or hide problems. This is often the wrong approach, because more learning takes place from things that go wrong than from things that go right.