5.7 Crisis Management Quiz

A global financial crisis, economic recession, or a natural disaster in the region are likely to be considered as a crisis for most businesses.

• True

• False

Cost minimization refers to the management action of making the effort to minimize the negative impacts of potential crises.

• True

• False

Crises are not always preventable and are often beyond the control of a business, e.g., severe weather conditions, the outbreak of infectious diseases, or a major economic recession.

• True

• False

Firms with well-considered contingency plans are better prepared to deal with potential setbacks, such as fire evacuations or technological failures.

• True

• False

Safety is a key factor that directly affects the effectiveness of crisis management.

• True

• False

Although some crises are unpredictable, such as a major traffic accident, others can be preventable, such as a fire hazards or product recalls.

• True

• False

Contingency planning describes the development of predetermined strategies to deal with a crisis should it occur.

• True

• False

Quantifiable risks are the risks that are so unlikely that they are hard to justify and prohibitively expensive to investigate and measure.

• True

• False

Crisis management refers to the response of a business in a disaster situation that potentially threatens its survival.

• True

• False

Quantifiable risks are those that are measurable, using techniques such as of past financial records, statistical trends, and market forecasts.

• True

• False