MGMT629 Crisis Management Assignment No. 01 Solution Fall 2014 Last Date 3rd Dec 2014

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MGMT629 Crisis Management Assignment No. 01 Solution Ideas Fall 2014 & Discussion Due Date: December 03, 2014



Chemica Ltd. was started in 1990 and gained the position of public limited company in 1995.
The CEO, Mr. Raza, brought the company from good to great within two decade. The company
takes pride in having plants in all major industrial hubs of Pakistan, producing chemicals like
caustic soda, soda ash, carbon black, phenol, acetic acid, methanol and azo dyes for both
domestic usage and export purposes. The petrochemical intermediate products are also major
products of the company by which the maximum revenue is generated in domestic as well as
international market.
There are around 260 employee including engineers, sub engineers and workers. Chemica has
been maintaining and ensuring the highest safety standards at work place and also provide safety
trainings to their employees along with a bonus scheme which further helps to embed a safety
culture in the organization. Excluding engineers and sub engineers, all workers and slum
population are resided around plants in particular industrial areas. There was only one water
filtration plant around chemical production sites.
One fine day as the work started at the Plant A, an explosion occurred on the main machine that
was producing more than 50 percent of all production and was handled by 10 experienced
supervisors and 50 workers who also suffered severe injuries from this catastrophe. The
engineers rushed to the site of explosion and tried to resolve the problem. Despite all efforts the
plant exploded, resulting in severe injuries to the engineers and other workers. The explosion
resulted in massive gas and chemical leakage leading to air contamination and low oxygen level
and polluting the water course in which recycled water was drawn out. This calamity aagonized the company CEO Mr. Raza as this incident led to loss in production
and injuries to workers operating the machine. The news spread like wild-fire and all external
stakeholders and media exaggerated the news from all angles. Within two hours, the share prices
of Chemica declined from Rs. 164 to Rs. 143.
REQUIREMENT:
Keeping in view the above scenario you are required to answer the following questions:
1. Which type of crisis is suffered by Chemia Ltd? (2 marks)
2. As a head of risk management wing, how would you explain the reasons of this crisis
despite taking all preemptive measures? (4 marks)
3. What measure you should take to prevent such crisis in future. (4 marks)
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