Managing Risk Reflection on Crisis Management

Description

Phase 1 (crisis preparedness): Submit your decision during

The responses submitted by the class during the lecture will be used to ‘push’ the simulation to the next phase. The Phase 2 information will be released to the class immediately following the lecture (around 1-2 pages of reading).

If you are unable to log in to the lecture in Week 12, that’s ok, you can catch up that evening to review the simulation briefing and submit your decision.

Phase 2 (crisis response): Submit your decision by

Please note your decision for Phase 2 is submitted via a multi choice question on Blackboard, after you have read through the Phase 2 information provided via emailed announcement.

The Phase 3 information (1-2 pages) will be released early on Thursday Week 12.

Phase 3 (crisis recovery): Submit your decision by

Please note your decision for Phase 3 is submitted via a multi-choice question, after you have read through the Phase 3 information provided.

Phase 4 (post-event learning): Submit your video reflection by

The outcome of the crisis will be released on Friday afternoon (Week 12) to provide feedback for the implications of your decision making. This feedback provides a stimulus to commence your reflections for Phase 4

Explanation & Answer length: 4 Phrases 2 Pages Each Phrase

1 Reflection on Crisis Management Student Name Institutional Affiliation Instructor Name Course Title Due Date 2 Introduction Risk Assessment is a managerial discipline that requires understanding the scope of risks or events causing risks to prevent, mitigate, or control its occurrence. Risks are particularly harmful to a business as they may lead to financial losses and closure of the company. Major organizations such as Airline entities are constantly facing risks due to their nature of operations. Of more immediate concern for Australian Airlines is the effect of the Covid-19 pandemic. T

he pandemic has reduced the number of people traveling both domestically and abroad to curb its spread. Thus, the airline’s finances have been hit hard. For instance, BAC is operating below capacity, and revenues are low. Australia is undergoing a tumultuous period with intense geopolitical tension in the Asian Pacific region and cyberattack on major infrastructure to compound the situation. These events weaken the ability to attract additional financing. Therefore, to cushion the management and ensure they make appropriate decisions, major organisations have a Risk Assessment Procedure and Crisis Management Plan that guides dealing with risks and crises (Herbane, Elliott & Schwartz, 2004). The Risk Assessment Team and Crisis Management Team offer a hands-on approach to decision-making during an emergency.

Crisis Management Model The reflection paper will be based on Mitroff’s Five-Stage Crisis Management Model and Portfolio Model. This model divides crisis into five stages of signal detection, probing, and prevention, containment, recovery, and learning (Marker, 2020). The stages can be regrouped into four distinct phases of pre-event (threat detection), response (probing, prevention, and containment), recovery, and reflection (learning). This model applies to the crisis simulation at BAC. 3 Fig 1: Crisis Management Cycle Activation Embedding Normal Operations Phase 1: Pre-Event BAC has just undergone a crisis that involved a system failure on one of the airplane 737. The aircraft is braced for a crash landing on the major runway at Brisbane Airport. The Crisis Management Team is out for training and will only be available after 30 minutes.

However, a crisis like this requires timely decisions to align with the Crisis Management Plans. Thus, the Risk Assessment Team is called upon to stand in for the Crisis Management Team and assist the CEO in managing the crisis. The Risk Management Team is thrown into the deep end and has to endure murky waters to give the best possible choices for management to act. This is not their daily playing tuff, but they are braced for it. The result from CASA indicated that the Risk Assessment Team acted appropriately by activating the Crisis Management Plan. The Crisis Management Team also applauded the Risk Assessment Team for standing in guard, although they pointed out that some decisions would have been made differently. Phase One Decision and Justification 4 The Risk Management Team employed a Proactive Crisis Management Model while modeling decisions for the CEO. The idea is to be decisive while undertaking initiatives to control how the events unfold (Sarker, Engwall, Trucco & Feldmann, 2016).

As the Risk Assessment Team leader, I believe every action we took stemmed from the Crisis Management Plan; in light of the situation and the limited experience in crisis management, the team acted practically to manage the crisis. If not properly managed, a crisis like this may lead to disaster. The crisis was compounded by the fact that many souls were involved in a heavily regulated sector and scrutinized. Thus, every decision that is made is scrutinized based on the results. The concept of Preoccupation with Failure drove the team. Knowing that failure will attract scrutiny as to the team’s ability to steer the organization in an emergency, we strived to follow the crisis management principles. Thus, the situation prioritized saving the 180 souls on board. Therefore, the decisions were straightforward to activate the Crisis Management Plan, contact Queensland Emergency Services, shut the airport immediately, and contact the airline to copy the flight manifest.

Hence, the result for the Phase one simulation was based on saving lives above any other decision. Phase 2: Response The plane has landed, but the fire has broken out and must be contained due to the crash landing. The situation required a closely monitored operation where all stakeholders are brought on board to manage the situation. It is a highly complex situation that requires dynamic task allocation to achieve results (Slagmulder & Devoldere, 2018). While Mai () is at the crash site relaying and coordinating management functions, the CEO and the Risk Assessment Team are locked in the situation room simulating scenarios to develop the best course of action. Phase 2 Decisions and Justification 5 It is still a frantic moment as the crew tries to contain the fire and save lives. Thus, the decisions are to call the State Fire services team to assist with the crisis on the runway, divert all flights away from Brisbane Airport, use Risk Assessment Team as stand-in Crisis Management Team to make further decisions, let the Airport Fire Response Team make decisions for managing crisis until the Crisis Management Team arrives and use Risk Assessment Team to continue brainstorming and supporting the CEO in decision making until Crisis Management Team arrives.

While the decision was not unanimous, the first two decisions were vital in saving lives on board the aircraft. Managing members of the Risk Assessment Team was essential to ensure that they understand the urgency of the situation and each contribution count. It was also crucial for the management to understand the deference level of expertise, and task distribution was based on skill and expertise. The crew was also made aware of the decision command and that while the crew proposes solutions, the final onus rested on the CEO to implement those solutions. When faced with uncertainty, the rule is to use the simple principles of Crisis Management that seek to slow the spread of risk, contain the damage, finding the source, mapping connections, and prioritizing the choke points. The idea is to search for causes while treating symptoms (Weick & Roberts, 1993). Emergencies are high octane situations that are highly stressful. Thus, as a team leader, I endeavor to use stress to spur me to arrive at decisions. During the crisis, paying attention to the team’s inputs while prioritizing decisions with the game plan in mind will ensure that the team does not deviate from the plan.

Phase 3 Recovery The decisions in Phase 1 and Phase 2 bore fruits as all the lives on board have been saved bar injuries. Thus, the critical issue in the recovery phase is to return the airport to operability. The wreckage of Flight 737 is still on the major runway, and the non-operability of the airport is sinking BAC into significant revenue losses of $150,000 for every hour. 6 Phase 3 Decisions and Justification After saving lives, the next decision is to return the airport to its operating status. The Risk Assessment Team is faced with the moral justification of coercing CASA to expedite the investigation. The wreckage of the aircraft cannot be lifted from the runway until CASA assesses the situation. Further, the airport does not have a heavy-lift crane to remove the plane from the runaway; hence BAC has to lease them. Which decision would come first in light of the situation? I prioritized requesting CASA to expedite their investigation over hiring heavy-lift cranes to move the plane out of the runway in my simulation. My decision was premised that even if the crane arrived on time, it will have to wait until CASA gives clearance to remove the plane from the runway.

Thus, every hour the crane waits for CASA to finish the investigation increases the hire cost. The Risk Management Team was split on this decision based on how CASA will respond to our request and the cost implication. However, prioritizing hiring heavy-lift cranes over requests to CASA paid off. Therefore, I would change my decision to reflect this. CASA obliged our request to expedite the investigation and was done within 4 hours. Thus, allowing the heavy-lift crane to reach the airport in time to lift the plane out of the runway. While CASA complained of interference in handling the investigation, it was ethically necessary to return the airport to operation and avoid further revenue loss due to flight diversion. Recommendation 7 While the crisis management was a success, few issues arose post-recovery. Both CASA and Crisis Response Team lauded Risk Assessment Team for commendable interventions. Though, the Crisis Response Team believed there were some decisions that they would have made differently.

Since they majorly deal with risks of financial nature, the Risk Assessment Team could be forgiven since they do not have the expertise of the Crisis Management Team. Thus I recommend: 1. Enterprise Risk Management (ERM) – BAC should have an ERM that is multidisciplinary. The ERM should have a holistic view of the organization. It should be composed of Risk Management Plan, Crisis Management Plan, adequate and welltrained personnel, and Contingent Plan. The Contingent Plan should contain clauses such as who takes command of managing various risks and crises (Herbane et al., 2004). The insurance provider refused to pay insurance because there were no clauses in the Crisis Management Plan that accord crisis management to any other BAC personnel or department in the absence of the Crisis Management Team. Thus, the liability was out of the scope of the insurer. 2. Proper Training of Personnel – Risks are uncertain and can harm an organization. Thus, adequate personnel training is a requirement to plan, monitor, control, and mitigate risks.

The training imparts skill and expertise to forecast risks and plan ahead of their occurrence (Marker, 2020). If BAC had adequately trained Crisis Management Team, several mishaps could have been avoided.

Allowing the whole Crisis Management Team to go on training without leaving a stand by the crew was short-sighted. Thus, the management should plan for training in phases and should involve key personnel from every department. References 8 Andy Marker, 2020 Models, and Theories to Improve Crisis Management. Retrieved from https://www.smartsheet.com/content/crisis-management-model-theories Herbane, B., Elliott, D., & Schwartz, E. M. (2004). Business Continuity Management: Time for a strategic role? Long Range Planning, 37(5), 435-457. Sarker, S, Engwall, M, Trucco, P., & Feldmann, A. (2016). Internal visibiilty of external supplier risks and the dynamics of risk management silos. IEEE Transactions on Engineering Management 63(4), 451-461. Slagmulder, R., & Devoldere, B. (2018). Transforming under deep uncertainty: A strategic perspective on risk management. Business Horizons, 61(5), 733-743. Weick, K. E., & Roberts, K. H. (1993). Collective mind in organizations: Heedful interrelating on flight decks. Administrative Science Quarterly, 38(3), 357-382.

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