Three Most Common Types of Business Crisis

A business crisis happens when an unforeseen circumstance takes a toll on the operations and objectives of a company or organization. These situations can either arise from within the business or brought by external factors. When left unresolved,a crisis can cause serious damage not only to the reputation of the enterprise,but also to its bottom line.

Crises come in different shapes and sizes. It is important to detect them on the onset to prevent serious damages and losses. Here are some of the most common types of business crises and a few examples.

Financial Crisis

A financial crisis happens when a company is hit by major losses or bankruptcy. It can be triggered by a major decrease in the demand of its goods or service due to sudden market trend changes or inflation. When not handled correctly,this can lead to a permanent shut down of the enterprise. One way to prevent such problem is by setting aside some funds to be used in this kind of challenging situation.

Technological Crisis

This crisis occurs when a technological appliance used in the organization crashes. This can be caused by a machine breakdown or a malfunctioning software. A simple example is when a coffee machine suddenly breaks down,forcing a small coffee shop to stop its operation for the day. This type of crisis could mean serious losses,not just in terms of money but also in reputation. Imagine a multinational corporation experiencing server malfunction across branches. In these instances,early intervention from IT service providers is very crucial.

Natural Crisis

Natural crisis takes place when a natural phenomenon like typhoon,floods,earthquake,or any act of nature affects business operations. These calamities are beyond the control of any human so it is important to plan beforehand. To avoid damages due to such crisis,a business should look into some preventive measures. It could be building a quake-resistant store,training employees for emergency response,preparing evacuation plan,etc.

There are many other types of crisis that pose a threat to the stability of a business,be it big or small. Consult with a crisis management agency in Hong Kong to learn how to be prepared in such trying times.

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