Understanding crisis and the dimensions of crisis

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1. Introduction and Related review of Literature

1.1 Understanding Crisis and the dimensions of Crisis

Webster's Dictionary (1990, pg. 307) defines a crises as, "An unstable or crucial time or state of affairs in which a decisive change is impending; especially one with the distinct possibility of a highly undesirable outcome." A shorter definition is, "A turning point for better or worse" (Fink, 1986, p. 15). A longer example is, "A major unpredictable event that has potentially negative results. The event and its aftermath may significantly damage an organization and its employees, products, services, financial conditions, and reputations. A more esoteric definition is provided by Pauchant and Mitroff, "A company's corporate image- describing how favorable and accurate public perceptions are about an organization-reflects its reputation but does not represent its essence. A crisis delves into the soul of an organization and dissects its core identity" (1992, p. 117). Finally, Seeger, Sellnow and Ulmer offer the following definition, " A specific, unexpected, and non-routine event or series of events that create high levels of uncertainty and threaten or are perceived to threaten an organization's high priority goals" (p. 233).

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Credible communication is the key to overcome organizational crisis that can be sorted into various categories: downsizing/layoffs, accident/violence, takeover/sale of the company, misconduct, strike, process failure etc. (Adams, 1995). These situations, though different in causes and consequences, have some features in common. In all cases, there is a chance of the situation getting escalated, normal operations of business getting hampered or the good public image enjoyed by a company and its employees getting damaged. Pearson and Clair (1998) define an organizational crisis as a “low-probability, high 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. According to Kuklan (1986), “a crisis is an out-of-the-ordinary situation requiring new rules. Short term actions are needed to put out the fires and long term actions may be needed to remove the source of the problem. Gand & et.al. (2005) define crisis as a collapse of existing frames of collective action. According to Lida (2008), crisis communication is generally considered a sub-specialty of the public relations profession that is designed to protect and defend an individual, company, or organization facing a public challenge to its reputation. These challenges may come in the form of an investigation from a government agency, a criminal allegation, a media enquiry, a shareholder lawsuit, a violation of environmental regulations, or any of a number of other scenarios involving the legal, ethical, or financial standing of the entity. A crisis is a sudden and unexpected event that threatens to disrupt an organization's operations and poses both a financial and a reputational threat.

Lukaszewski (1999) points out that true crisis have several critical dimensions that can be broadly identified into seven dimensions like operations, victims; trust \ credibility; behavior; professional expectations; ethics; and lessons learned that any one of which , if handled poorly , can disrupt or perhaps result in a series of negative outcomes. Crises can harm stakeholders physically, emotionally and/or financially. A wide array of stakeholders is adversely affected by a crisis including community members, employees, customers, suppliers and stockholders. (Coombs, 2007)

A corporate crisis can be defined as a situation that causes, or can result in, negative or undesirable outcomes for an organization (Coombs, 1999). A crisis is an “untimely but predictably unpredictable” event (Heath & Millar, 2004, p 19). For this reason, crisis management, which has emerged as a means to reduce the losses of corporations, has attracted considerable interest from public relations scholars, practitioners, and people in related fields. Much research on crisis management has centered on crisis response strategies (Allen & Caillouet, 1994; Benoit, 1995; Coombs, 1995, 1999; Coombs & Holladay, 2004; Hearit, 1996). Crisis response strategies represent “what the organization says and does after a crisis” (Coombs, 1999, p 121). A number of crisis management experts have explored how an organization's crisis response strategies should be selected to minimize its losses.

In contrast to the casebook approach, Lerbinger's The Crisis Manager: Facing Risk and Responsibility emphasizes a more corporate perspective on crisis management and communication. Looking at both reputation and bottom-line consequences, he defines a crisis as “an event that brings, or has the potential for bringing, an organization into disrepute and imperils its future profitability, growth, and, possibly, it's very survival” (p. 4). Although he devotes half of the book's 14 chapters to categorizing types of crises (and cases for each), Lerbinger makes his greatest contribution in his unwavering commitment to pre-crisis planning and effective communication in all stages of crisis management.

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For example, in the chapter on risk management and communication, Lerbinger integrates well the topic of risk analysis, a growing but complex discipline, with crisis management. He discusses research and includes helpful tables on risk perception factors and risk acceptability along with clear cost-benefit risk calculations and explanations, but he does not stop there. He further underscores the data's usefulness in providing insights into risk communication principles. He boldly advocates two-way symmetrical communication here: “Organizations should provide sufficient information and background knowledge to members of the public affected by a risk situation to enable them to engage in a dialogue, and, indirectly, to share risk decision making with them” (p. 282).

1.2 Role of communication during crisis situations

In any organizational endeavor, the role of communication is of central importance. The entire coordination, functioning, Employeesing, control of organizational activities is executed through organizational communication. Effective communication takes on added importance especially, when employees are experiencing the upheaval and dislocation that accompanies organizational change and renewal. Additional communication is called for at such a time because one role of a leader in an organization is to provide a vision of a credible and attractive future for the organization. The degree of effectiveness of the change is positively correlated with the degree of effectiveness of the communication strategy. In fact the managers who direct a strong communication programme will find the introduction of change to be much easier and resistance to be minimal. Poor Communication results in lack of coordination in an organisation which may result in the collapse of the organization. (Argentice ,1998;Reddy & Gayatri, 2005; Huseman et al, 1986; Withers, 1990; Corrodo, 1994; Oldcorn, 1989).

Responding effectively and appropriately when a crisis strikes isn't necessarily something that comes naturally, even within a well-run organization. It requires a carefully considered, ready-to-implement plan, built on a framework of responsible, ethical industry best practices.

After a crisis, organizations need to convey messages to stakeholders. These messages begin by telling stakeholders what to do to protect themselves from the crisis (instructing information) and to help them cope psychologically with the crisis (adjusting information). The next step is to address the reputational threat posed by the crisis (Sturges, 1994). Reputations are valuable resources that are threatened during a crisis ([Alsop, 2004] and [Davies et al., 2003]; [Dowling, 2002] and [Fombrun and van Riel, 2003]). Most post-crisis communication research has utilized case study methods. While providing useful descriptive data, case studies offer little insight into how stakeholders actually respond to crisis response strategies. Moreover, the case studies often provide minimal theoretical insight into crisis communication (Dawar & Pillutla, 2000; Dean, 2004).

Research has shown that crisis response strategies - what an organization says and does after a crisis - serve to protect a reputation after a crisis (e.g., Coombs & Holladay, 1996). Researchers have over-emphasized the use of apology/mortification as the “best” crisis response (e.g., Benoit, 1995; Benoit & Drew, 1997) and have used widely varying definitions of apology (Patel & Reinsch, 2003). At its core, an apology is marked by the organization accepting responsibility for the crisis and asking for forgiveness (Benoit & Drew, 1997; Fuchs-Burnett, 2002). A variety of additional components can be added to this definition including expression of remorse/sympathy, expression of regret, preventative measures, and reparation (Benoit & Drew, 1997; [Cohen, 1999] and [Fuchs-Burnett, 2002]; Patel & Reinsch, 2003).

Sellnow (2009) and Vidolof (2009) talks about 11 best practices which are designed to assist organizations and agencies in developing crisis communication plans and for responding to recalls and similar crisis situations pertaining to food and health industries bur considers their applicability in all sectors.

Effective communication acquires additional importance especially, when employees are experiencing the upheaval and dislocation that accompanies organizational change and renewal. Elvining (2005) and Smith (2006) examined the important role of communication during periods of change. According to Elvining (2005), communication is vital to the effective implementation of organizational change. Poorly managed change communication results in rumors and resistance to change, exaggerating the negative aspect of change.A study by Massey (2001) revealed that organizations that produce consistent crisis responses across stakeholders will enhance their legitimacy, while organizations that produce inconsistent crisis response will reduce theirs.

In a similar vein, Coombs (1998) also held that the characteristics of each crisis situation would call for the use of certain form(s) of crisis communication and the avoidance of others, because it is imperative to take into account the stakeholders' perceived crisis responsibility as attributed to the accused corporations. For strategically analyzing a crisis situation or boundary span (Meyer, 1982), Coombs (1998) further identified the following four elements affecting such perceptions, which further affect the methods of responding to crises: crisis attributions, the history of organizational performance, severity of the crisis, and the evidence of causing or being involved in the crisis event. In summary, strategic orientation that involves all sorts of situation analysis will affect an organization's choice of forms of crisis response.

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Existing crisis literature has shown the importance of positive forms of crisis response such as responding consistently, actively, and in a timely manner (Allen & Caillouet, 1994; Marconi, 1992; Strong, Ringer, & Taylor, 2001). Organizational executives, however, may find it difficult to communicate messages effectively when they are faced with a crisis event, which is often accompanied by urgency, threats, or surprises ([Fink, 1986], [Hermann, 1963], [Seeger, 1986] and [Sellnow, 1993]; Sellnow & Ulmer, 1995; Weick, 1988). Thus, the factors that contribute to an organization's manner of responding to a crisis consistently, timely, and actively become the key to successful crisis communication, and are worthy of exploration.

A variety of theoretical approaches have been fruitful in investigating the determinants of corporate crisis response. For example, an emerging theme in crisis management research is that an organization's response reflects its strategic management of crisis situations (e.g., Bradford & Garrett, 1995; [Coombs, 1998] and [Hearit, 2006]). On the one hand, Bronn and Olson (1999) suggest, “through their [public relations] involvement in activities that reflect strategic thinking, public relations managers can help their organizations in dealing with threats and grasping opportunities in the signal detecting stage” (p. 359). On the other hand, however, Fitzpatrick and Rubin (1995) hold that legal force could help minimize the risk of legal liability. Last, one other stream of research reflects an organizational viewpoint, suggesting that factors such as a corporation's size, ranking, and type of ownership and operations also have their specific influences on corporate responses to crisis events ([Bromley, 1993] and [Fomburn, 1996]).

Adams (1995) addressed the problem of effective communication with internal audiences in organizations involved in crises. A clear pattern of employee preferences for communication emerged from the data. Subjects expressed a strong preference for receiving timely information from their direct supervisors, but reported they frequently received first and ongoing information about an organizational crisis from some other source. This suggests that organizational crisis communication plans should be expanded to include appropriate attention to communication methods and messages for internal stakeholders.

Monippally (2003), in his research paper, recommends organizations to adopt a macro communication strategy (consisting of mutually reinforcing verbal and non-verbal components of communication) in preference to micro communication strategy (that depends largely on the verbal component of communicating process) in the event of downsizing as it helps in softening the blow. Papadakis (2005) investigated what actually influenced a merger and acquisitions (M&As) successful implementation. It explored the influence of a range of factors including external corporate environment, company characteristics, communication program and the characteristics of the M&A itself. Findings indicated that the existence of a communication program was among the most influential factors in the successful implementation of M&A. Results showed that the appropriate communication strategy was the area that could significantly improve the odds of success in post-merger integration.

Smiths et al (2001) showed that employee communication augmented external prestige and helped to explain organizational identification in a study of three different organizations, which had recently undergone merger. Jeong (2008) explains how the public's responses to a corporation involved in an accident are formed based on their attributions about the accident and how those attributions can be altered based on communication messages. Consistent with SCCT, high distinctiveness information lead to lower internal attribution about a corporation, and this in turn, resulted in lower public support for punitive actions toward the corporation. Crisis managers benefit from understanding how crisis communication can be used to protect reputational assets during a crisis (Coombs, 2007)

Also relevant is the public relations crisis: a situation in which an organization suddenly must engage in communication to offset a surge in negative publicity. Five practical guidelines have been proposed to guide public relations strategies to minimize the risk of negative press: (1) prompt response, (2) truth/avoidance of absolutes, (3) constant flow of information, (4) concern for victims and their families, and (5) choice of appropriate spokesperson(s) (Martin & Boynton, 2005). These guidelines advise organizations in dealing with the press rather than communicating directly with the public, but a recent trend is to use the Internet for unmediated and interactive communication with the public, although this is an extra component of a traditional media-centered strategy, not a dominating piece (Taylor & Perry, 2005). Public relations exercises in crises also operate at a national level, perhaps in a similar way, with governments competing with each other to make a favorable impression through their reaction to a crisis (Zhang, 2005) or seeking to persuade the public to accept a given course of action (Hiebert, 2003).

While many companies still lack an effective crisis communications plan, others have recognized the potential threat to their survival and have taken steps to address these shortcomings. In fact, the terrorist attacks of September 11, 2001 and the series of natural disasters that affected the coastal regions of the United States in the years that followed appear to have been a wake-up call for many enterprises. Indeed, following the terrorist attacks of September 11, 2001, a survey of national public relations professionals determined that many companies are assigning higher priority to updating their crisis communications plans and attempting to identify faster approaches to communicate with all employees during such emergency situations (Duhe, 2005).

According to this author, "The survey of 150 companies found that 46 percent of companies have increased their focus upon crisis communications planning in the wake of 9/11. Companies re-evaluated their crisis communication plans and determined that the top priority is to communicate quickly and effectively with all employees" (Duhe, 2005, p. 7).Thus, internal communication, when implemented effectively, can be crucial in a time of crisis, providing employees with not only a strategy to handle a crisis, butthe facts surrounding such an event by maintaining open lines of communication between management and employees, effective internal communications can enhance stronger relationships throughout all levels of the organization and promote a positive and inclusive work environment.

Organizations often give full attention to crises communications after the fact, or once a crisis is publicly revealed. An important part of crises communications is the communications that take place in an organization before a crisis strikes. Effective crises management through the establishment of stakeholder relationships is an important pre-crises strategy for success (Ulmer, 2001).During a crisis numerous response strategies have emerged. Attribution theory provides a useful framework for the conceptualization of crisis communications management (Wilson, Cruz, & Rao, 1993)

Forms of crisis response

The literature suggests that the favorable ways in which messages are communicated or responses are formed for crisis events can be categorized by three of the major themes associated with them: activeness, consistency, and timeliness.

A timely response consists of disseminating information at appropriate times. Stakeholders, in particular, demand information and answers during a crisis ([Augustine, 1995], [Coombs, 1999b], [Darling, 1994], [Fearn-Banks, 1996], [Hearit, 1994] and [Maynard, 1993]). The urgency, threats, surprises, and public doubts regarding a corporation's loss of control that often accompany a crisis can be eased by a timely response (Coombs, 1999b). Timely messages and statements were found to be key factors in fostering stakeholder satisfaction (Strong et al., 2001) and trust (Augustine, 1995). However, when a company fails to communicate during a crisis, the relationship with its stakeholders can sour (Martinelli & Briggs, 1998). A consistent response demands the communication of uniform messages to establish legitimacy. This consistent and non-contradictory communication enhances accountability and credibility, as well as organizational legitimacy (Barton, 1993; Carney & Jorden, 1993). During a crisis, however, an organization's messages about objectives, locus, and facts are not always consistent, thereby disrupting harmony ([Garvin, 1996] and [Seeger, 1986]; Ulmer & Sellnow, 2000). If these messages are presented in a complete and objective way, crisis communication can be considered ethically sound. The opposite is also true in that inconsistent or contradictory messages can damage an organization's credibility ([Sillince, 2002] and [Swann, 1987]). An active response involves taking the initiative in a crisis in order to actively issue responses, a behavior that communicates that a company is forthright and honest. A lack of communication, or even passivity, can make it look like an organization is unresponsive, or worse, trying to conceal information (Grunig, 1992). Moreover, with respect to relationship management, a vital element in building a positive relationship between an organization and its public is an active response (Lerbinger, 1997).

2 The objectives of the study are:

During the current economic meltdown, IT and ITES were the most affected sector. There was large scale panic and uncertainty amongst the lower and middle management with respect to the organizations future, their job security and the effectiveness of performance and incentive management systems. This study aims at providing the higher management with sufficient insights into the perceived effectiveness of the communication pertaining to the above concerns by the middle and lower management.

3 Research Methodology

The present study aims at examining and providing an insight into the perceived effectiveness of internal crisis communication in the Indian IT and ITes sector during the current economic meltdown from the perspective of the employees at the lower management level as they are the most hit or affected sections of the organizations.

3.1 Research Design: Survey research design was used to undertake the study. The data was collected by using a questionnaire on the effectiveness of the communication by the higher management during the economic meltdown.

3.2Sample selection

Organizations were selected which met the following criteria:

- The IT industry since this industry was most affected.

- The large and medium scale IT Firms

- the number of employees should be 500 or more and the product should be IT services as there was need to have similarity in the business operation

- Had more than three distinct management levels which could be classified as top, middle and lower management levels.

- Where the researcher had access to be able to get the necessary data.

3.2.1How management Levels will be selected

The management levels were classified in different sets based on the following criteria: Top management level comprised persons involved in policy planning and decision making including heads of department and above. Middle management usually consists of assistant managers and above. Lower management comprised engineers, assistant engineers and junior engineers. A random sample of about 10 personnel working at lower management level was selected from each of the twelve firms. They were all men and women falling in the age group of 23-30.

4. Limitations of the Study

The limitation of the study was that the sample for the study was limited to only junior management levels in IT and ITes sector of India. This is because of the accessibility of authors to get a relevant data from these employees across organizations. Since the employees at the junior management level were the most affected one (because of the kind of exposure and visibility to real time decision making services industry in India provide to junior level employees), but the middle as well as the top management too could not escape totally the heat of retrenchment.

5. Tools Used

Economic downturns mean uncertainty - and uncertainty is bad for business. Few people thrive when they are feeling nervous and insecure. Most of us work best when we have a clear picture of where our organization is heading and what we need to do to contribute. Regular, clear, engaging internal communications play a big part in reducing uncertainty. During a downturn it is more important than ever to give Employees a clear picture of the future, share information as soon as it comes to hand and answer Employees's questions and concerns quickly and honestly. The investment is small compared with the value to your organization of meeting these challenges:

  • Maintaining productivity
  • Staying profitable and competitive
  • Retaining your best Employees
  • Protecting your culture, internal and external brands

An organization can face crisis from various quarters and the crisis can have varied dimensions like financial scandals, media gaffe, gender exploitations, downsizing, union problems etc. as discussed earlier in the introduction part. However, in the present study, the authors have used the term crisis as the impact of the recent liquidity crunch and economic slowdown on the Employeesing policy of the IT and ITes sector. As the study involved examining the perceived effectiveness of crisis communication during the recent economic meltdown, a crisis communication scale was created and checked for their relevance and conformity to the concept of Crisis Communication effectiveness and also to see whether the items measured adequately the dimensions they represented. For example, to ascertain the level of internal communications, questions like “In your company, the internal communication precedes external communication during any crisis situation”were asked to the respondents. They were also checked appropriateness of wording, grammatical corrections, formatting of sentences in the scale. The items were found to true to what they represented. Thus the scale was considered to be validated. Refer to Annexure II.

6. Collection of the Data

The data was personally collected from the twelve firms (12) selected for the study. Scale on Crisis Communication (Annexure-II) was administered to the employees from the lower management level. Before administration of the scales, the purpose and importance of the study were explained to the employees and they were requested to cooperate by providing their free and frank opinions through the given scales.

7. Key Observations from the Survey

The survey was administered to employees of 12 different well-known companies. 102 of these employees responded by filling up the questionnaire administered. The questions asked were pertaining to the effectiveness of communications from the higher echelons of the organizations to the junior employees in companies affected by the current economic meltdown. Some key observations from the survey are as under:

  1. Most of the communication in the companies is through e-mail. Face-to-face meetings are very few most of them are either for technological knowledge transfer or for performance appraisal, although such meetings could be the most efficient manner for exchanging information in times of crisis. The use of e-mails is perhaps more so because the companies surveyed were all in the IT sector, where due to the distances in the client and organizations location, being majorly in different geographies, written communication precedes all other forms of communication.
  2. The respondents were mostly below 28 years of age and a majority of them have not spent beyond 4 years in their present company. Also, most of the respondents had spent around 2 -3 years in the IT industry, which showed that for most of the respondents the kind of experience this financial crisis has been is something for which no one can be prepared, financially or mentally in such an early phase of the career.
  3. While a majority (80%) of the junior employees said that their companies had communicated the issue of pay-cuts to their junior employees, there were others (20% of the respondents) who had shared no such information with the juniors. These were primarily organizations, relatively smaller in the size.
  4. Regarding the stoppage of incentives and bonuses, about 65% of the respondents claimed that they had not been informed prior to taking the decision by the senior management on this aspect. Only after decision is taken by the management, they were informed.
  5. Again, over 50% of the respondents said that information was shared through the communications which HR personnel or centralized communication departments of their respective companies and that information sharing was not done through their Team leads or managers.
  6. There were an appreciable proportion of youngsters in the companies surveyed (70%) who admitted that their job commitment has reduced because of lack of honest sharing of information regarding the crisis by the seniors.
  7. Around a third of the respondents felt that they were not informed about job-security issues adequately. Similarly about a quarter of the respondents said that they were not informed about their company's poor performance during this crisis situation.
  8. While inadequate communications regarding the economic crisis was found in appreciable number of companies (sl.nos 3, 4 & 5 above), around 70% of the respondents agreed that, whenever the company's interest was concerned, their companies took steps to improve employee productivity.
  9. Similar to the previous point, about three quarters of the respondents agreed that their companies, even during the crisis, takes steps to retain top performers.
  10. While almost 50% of the respondents felt that the companies were taking steps to reduce employee anxiety levels, more than two third of the respondents agree that there has been a change in job attitude due to lack of communication during crisis.
  11. More than two third of the respondents informed that whenever there was a layoff, the employees were not told about the reasons for the layoff.

8. Results and Findings

The importance of communication grows in crisis situations. US, being the epicenter of the financial meltdown, accounts for almost 50% of IT sector revenues. Almost 78% of the total client base of Indian IT firms lies in the regions of US and Europe. Given the global economic meltdown, organizations that are linked directly for business to countries that have been affected badly by the downturn, also find themselves in a crisis situation. It was therefore felt that an opinion survey on various aspects of organizational communication channels, its extent, frequency, effectiveness etc should be conducted among employees of such companies. The key observations from this survey were based on basic frequency distribution of response categories that varied from strong agreement to strong disagreement on the aspect in question. A neutral response was also kept as an opinion choice, so as to ascertain how many of the respondents are either not engaged in the process by the organization or are simply indifferent to it. In either case, a neutral response would indicate the company's failure to involve and engage employees in the communication process. Key suggestions which were given by various learned individuals during earlier global economic slowdowns, like the one happened in early 2000, the dot com burst, are compiled below. In accordance with the kind of responses we got for the survey, these seem to be true even today for Indian IT firms. Some of these are listed below:-

  • Don't cut employee communications- When budgets are tight and the future looks uncertain, the knee-jerk reaction is often to pull back to ‘basics'. In some organizations, this means cutting costs in areas like employee communications. This can backfire: effective employee communications are more important than ever in a downturn.
  • Be visible, honest and open - No news is good news? For your employees, it's rarely the case - and certainly not in an economic downturn. In fact, recent research shows that 71% of people felt that their organization should be communicating more about the current economic downturn than they are (Weber Shandwick, October 2008). If you haven't already, talk to your Employees now. Explain how the downturn is affecting your organization and what you are doing to counter it. You may not have all the answers - and that doesn't matter. What does matter is that you take the lead: just because you're not talking about the downturn with your Employees doesn't mean they're not talking about it. They almost certainly are, and, unless you're giving them accurate, balanced and (where appropriate) positive information, they're probably painting a far worse picture of the situation than they should be. So tell Employees what you know, what you don't know, and when you will give them more information. Explain the steps your organization is taking to identify issues and resolve problems. Don't make promises you may not be able to keep. Be as open as you can with information about your organization's performance. Even if the news is not good, Employees will appreciate your candor. It will help gain their support for actions that may follow.
  • Be timely - Put new information out quickly. Coordinate your internal and external messages. Employees should hear company news from the company first: nothing is worse for morale than learning about changes to their organization from the media or family and friends before they hear about them from their employer. Sometimes, however much you would like to, you cannot brief Employees before you release information publicly (e.g. to the stock exchange). In these cases, organize a Employees briefing to coincide with your public announcement. Keep track of when Employees last heard from you and schedule in regular updates, even if you do not expect to have anything ‘new' to report.
  • Manage rumors - Manage rumors. Rumors thrive on uncertainty and, if this is the only ‘information' Employees receive, they may accept them as the truth. (“If the rumors weren't true they would have said so.”)To manage the rumor mill, put new information out as soon as you can. Let Employees know you'll be updating them regularly, to encourage them to look out for your updates. Keep your ears open for rumors doing the rounds and correct or confirm them quickly.
  • Involve junior managers - Employees would rather communicate with their immediate manager or supervisor than any other level of management, especially during uncertain times. These people best understand their personal circumstances and roles and can tailor information to suit. They are also the people Employees feel most comfortable approaching with questions and feedback. So use your management team. Make sure they know how and what to communicate - and those they do it.
  • Provide two way communications channels - Encourage two-way communication. Invite employees' questions, concerns, feedback and suggestions. Welcome all kinds of feedback including negative comments. Sometimes people simply need to vent their frustrations during difficult times before they move on emotionally. Acknowledge Employees emotions and probe to understand the real issues behind them. Use face-to-face meetings for sensitive issues and allow plenty of time for managers to hear feedback and answer questions. Employees may think of more questions after the meeting, so make sure you have other channels in place (e.g. Employees suggestion boxes) to address them at a later time. Employee's opinion polls may be useful too, to gauge how they are feeling about the downturn and the steps your organization is taking to manage through it.
  • Focus on results and drive performance - Focus on the things that matter most: your organization's goals, progress and performance. While economic downturns almost inevitably force organizations to cut costs and review productivity, make sure you balance these messages out with more positive messages too. Highlight genuine good news stories and focus on future opportunities as well as the current plan. Play to your strengths. Reinforce the values and ways of working that make your organization successful. Talk about how they will help the organization manage its way through the downturn and thrive in the future. Keep the focus on meeting your performance targets. Don't let negative views of the economy be an excuse for failing to perform.
  • Involve Employees to reduce inefficiencies - Involve Employees by asking them to suggest ways to reduce costs and work more efficiently. Enlisting their help sends the message that ‘we're all in this together' and their suggestions can dramatically improve the business. Share the good ideas and success stories. Printed or online Employees magazines and newsletters are an engaging way to do this. Use them to tell stories: what are departments or individual Employees doing to reduce costs or work more efficiently? Offer rewards or a personal ‘thank you' for good ideas.

9. The observations above help us in coming to some pertinent conclusions.

  1. The first conclusion is that even among the well-known IT companies in India including some global giants, the junior employees are frequently kept out of the vital communication loop in the company and decision making is still not open enough, particularly when the communication is crisis-related.
  2. Top performers, which are generally 10% of the total employee base, are the best lot when it comes to surviving the crisis because of the inclination of senior management to retain them. One can also conclude from here that no substantial efforts are made to bring in an increasing number of currently mediocre performers into this exclusive band of top performers or to retain them.
  3. Communication regarding crises, wherever done, is mostly through e-mails rather than through face-to-face interaction, perhaps to avoid further questions in the matter.
  4. There are an appreciable number of cases where compensation reduction is not discussed or informed but implemented. This led to more disconnect between the employees and senior management, and the level of trust decreased.
  5. All the above factors have contributed to reduced employee commitment level in many cases. The companies, although trying to increase their productivity to please the clients who is hell bent on cost counting, ignored this issue. As a result of this lots of effort and resources were wasted, only because of the disconnect between the lower and higher management.
  6. While there is awareness about reducing employee anxiety levels, transparency in communications does not seem to be a priority measure to tackle this anxiety. In other words, communications at all levels to diffuse and reduce speculation and apprehension about the future of junior employees, about the reductions in compensations, about layoffs, that should form an integral part of the crisis management system, is lacking in many companies. This only promotes an environment of mistrust. The role of transparent and regular communication is therefore yet to be appreciated and operationalised in many of the crisis-affected companies. The most affected section of employees are the juniors who have little experience and maturity to manage the situation on their own.

10. Directions for Future Research

This study can be further extended to other IT and ITes firms in India and more in depth analysis using various statistical tools can be done on the data. This study can also be done on other industries, like financial and housing sectors which were at the center of the meltdown