ABSTRACT

This chapter outlines techniques for corporates and governments to respond to unexpectedly elevated risks, or crises. It starts by defining a corporate crisis and then discusses the experience of corporate crises in Australia. There have been six types of corporate crises in Australia: product defect or contamination; operational failure, mostly fires and explosions; financial, including trading losses and unwanted takeovers; organizational, including labour disputes and whistle blowing; regulatory and legal, including action by government authorities; threat and extortion, including blockades. Crises are no respecters of geography, and the internationalization of companies brings crises offshore following political turmoil, environmental incidents and illegal activities. The most interesting industry-wide series of crises in the Australian region occurred during 1998 with disastrous failures at three utilities: bacterial contamination of Sydney's water supply; an explosion at Esso's Longford plant which cut natural gas supplies to Melbourne; and failure of Mercury Energy's electricity network to Auckland.