IB Business Management HL 5.7.2 Hl Effective Crisis Management Factors Questions

Analyse why crisis responses fail by mapping causes, then weigh internal and external communication against quality, structure, culture and response speed.

Syllabus
First assessment 2024
Course
Business management HL
Level
HL

Exam points

  • Build and explain a cause-and-effect fishbone diagram for a delayed crisis response, using case evidence in each branch and developing at least two causes.
  • Examine internal and external communication in a crisis while weighing response speed against quality control, organisational structure and corporate culture.

IB Business Management HL 5.7.2 Hl Effective Crisis Management Factors Questions question 1

[Maximum number: 12]

Crisis management and Mapa

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The Portuguese company Mapa manufactures a handheld global positioning system (GPS)* device. In the winter of 2012, Mapa received reports that its GPS devices often failed in extremely cold weather. According to the media, the problem first appeared in 2011, when mountain climbers with the Mapa GPS devices discovered inaccuracies in the coordinates the devices provided. Rumours of the GPS failure began to circulate in the climbing community. Then, after several accidents in the mountains, including fatalities, television news programmes began to report the problem. Only then did Mapa begin to take action.

Engineers concluded that the problem resulted from where and when the quality testing was being performed. The production of a component part outsourced to a company in Iceland was being quality tested in Portugal in the summer. There was also poor communication between the producer of the component part and Mapa because of differences in language and culture.

Mapa's tall organizational structure, bureaucracy (and bureaucratic corporate culture) and centralized decision making meant that no manager acted until the Chief Executive Officer (CEO) formally apologized. As a result, Mapa had taken too long to admit that there was a problem and so consumer confidence fell and Mapa's reputation suffered.

The production process of the GPS device is shown in the table below:

Table for Question IB Business Management HL 5.7.2 Hl Effective Crisis Management Factors Questions question 1 — IB Business Management HL

\footnotetext{
* global positioning system (GPS): provides location, including geographic coordinates and time information to users anywhere on earth as long as their receivers (commonly a handheld device such as a smartphone with a GPS application) have unobstructed lines of wireless transmission to various GPS satellites
}

Question (a)

(a)

Using a (cause-and-effect) fishbone diagram, explain why Mapa was slow to respond to the problem with its GPS devices.

[ 6 ]

Question (b)

(b)

Examine the importance of communication for Mapa in its management of the crisis.

[ 6 ]
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