Crises are detrimental because they can have extremely negative consequences for a business’s reputation. The immediate results can be the erosion of trust from both potential clients and partners. Often, the situation has either spiraled entirely out of control or is at risk of doing so at any moment.

Most international companies have specific guidelines for responding to particular crisis situations. Generally, in crisis situations, they follow the main principle of “taking actions that will cause the least damage.” We will share with you the purpose of crisis communications in business conflicts.

Why are crisis communications needed in business conflicts?

Problems arising in business are exacerbated by the fact that, in the era of digital technology, it only takes a couple of hours for them to escalate into a loud scandal. Such scandals not only undermine the reputation of those involved in the conflict but also jeopardize their ability to conduct business in the future.

It takes 20 years to build a reputation and five minutes to destroy it. Warren Buffett’s accurate phrase, spoken many years ago, is more relevant today than ever.

An appropriate example is the YARO brand, which produces healthy food products. Its owner posted a humorous photo online depicting the central square of the capital city of an aggressor country. This action provoked a wave of indignation. Even the apologies, which were belated, did not remedy the situation. In the end, many well-known retail networks refused to sell YARO products.

Features of crisis communications

What to do during the first days of a crisis and how to act to prevent potential negative consequences:

• Always be prepared

Most global companies can boast pre-prepared instructions that outline the order of actions in case of unforeseen crisis situations. These instructions are called crisis roadmaps.

These guidelines describe hundreds of possible problematic situations and options for public communication regarding each of them. Moreover, these manuals should be regularly updated to fully correspond to new realities. Ideally, they should be updated every six months. Additionally, many companies have recommendations for employees on how exactly they should communicate on social networks, what topics to raise, and how to respond to potential provocations. The primary goal of this is to prevent the business from being at the center of a scandal.

Nevertheless, even such detailed and carefully prescribed instructions cannot foresee absolutely everything. Therefore, even with these guidelines in place, businesses sometimes find themselves involved in scandals.

Let’s recall the Swedish company engaged in clothing retail that used a boy with a dark skin tone in its advertising campaign. The boy wore a sweatshirt with the inscription “Coolest monkey in the jungle.” Accusations of racism did not take long to surface, and the indignation from opinion leaders only fueled the situation.

And even though the changes were made on time, all the relevant photos were removed, and the responsible individuals were punished, the company’s shares still fell by a third within a year, and some of the brand’s stores were even closed in South Africa. Of course, time passed, and the scandal was forgotten. Today, the brand continues to grow and explore new promising markets.

How to properly resolve emerging crises? It is essential to create a cross-functional team in advance, consisting of PR specialists and experts who will work on the incident. If the team members are familiar with their action algorithm and act quickly and efficiently, even unpleasant situations will not gain publicity.

• Preparing a position paper

A crisis always implies that specific and clear communications must take place. It is important to understand why something happened and gather as much information as possible about the incident. All of this will then be used to prepare statements. These are short messages that describe the company’s official position.

Characteristics of these statements:

Only provide verified information, preferably pre-approved by lawyers.

Messages should explain what happened and answer the question of what the company plans to do about it in the future.

It is important to talk about the importance of life, health, human rights, and the environment.

Use factual language, avoid emotions, and sarcasm.

If the company accepts responsibility, it must apologize and inform about the measures it will take to change the situation.

The message can be small and consist of just a few paragraphs. If necessary, you can always publish updates and add new points. Statements are published on the company’s official public platforms.

• Round-the-clock monitoring and working with media services

First, you need to identify the source where the problematic information first appeared. If you cannot do this independently, use the services of one of the monitoring agencies.

If the mass media is the source, contact them and ask to update the information with an addition about the position your company holds regarding the incident. Mention that there should be a balance between assertions and opinions. If someone’s post on social media is the source, be sure to comment on it as an official representative of your company.

If television channels approach you, before giving comments, ask the journalists for a list of questions and allocate time to prepare your answers. Keep in mind that not everything you say will be broadcasted. Most likely, it will be cut into pieces, and not in the best way.

Here are some more recommendations on how to save face during a scandal:

Don’t remain silent. There are situations when there is simply nothing to say. But even in such cases, you should communicate and say that you are actively working to clarify the circumstances and resolve the arising issues.

Don’t waste time. Every minute is crucial in a crisis situation. Work actively and act promptly. You can rest later.

Be honest with people. If you conceal or distort information, it will definitely not work in your favor.

Don’t be swayed by emotions. Remain calm and composed under any circumstances.

Stick to the facts. If you are using any information, you must be absolutely sure of its truthfulness. Otherwise, you risk not only your reputation but also your relationship with the law.

Remember that any conflict can be taken to the legal realm. So, don’t forget about the need for a prepared evidence base. Save all correspondence, take necessary screenshots. The date and time must be visible on the screenshots.

Keep your team informed. All your employees should not only be well informed about what is happening but also know the official company position.

Hire experienced experts who will help you deal with the problem.

• Further development of events

Only a very small percentage of crisis situations can be stabilized within the first day. More often, the situation becomes more acute and worsens with each passing hour. This is especially true if the company remains silent or distorts the actual facts.

So remember, the most important thing is to have a calm and competent reaction within the first day of the problem arising. If everything is done correctly, the company’s losses will ultimately be minimal.

Conclusions

During a crisis, building normal communication is difficult. This is mainly because the situation often changes and starts to require new, often either strict or creative crisis management measures. If these measures are not successful, it can lead to a real catastrophe and even the end of the company’s operation. Therefore, turn to experienced specialists for crisis management measures. For example, to the specialists at S&P Investment Risk Management Agency.

The choice of the organizational and legal form of the business entity impacts not only the initial stage of registration, but also the establishment of the business structure, the type of taxation, the regulation of conflicting financial situations with partners, the extent of managerial responsibility, liquidation procedure, etc.

If you are thinking about how to start your business in Ukraine from scratch and correctly, regardless of whether it is a medium-sized firm or a large company, S&P Investment Risk Management Agency will help you.

How to open a business in Ukraine

In order to start a business, as an entrepreneur you have to register with state bodies. First of all, determine in what organizational and legal format you want to work as a natural or legal person, as there are certain differences.

FLP is an individual working as an entrepreneur. This type of activity is usually chosen by those who provide services to the public or to other companies. At the same time, the planned income cannot exceed 5 million hryvnia per year.

LLC is a legal entity, an organization having one or more founders. LLC or Limited Liability Company choose entrepreneurs who plan to do business with large companies, work in foreign markets and attract investment.

No matter what form of activity you choose, you can register a business without the participation of the State Registrar. To do this, you need to apply online through the portal Dia, using a qualified electronic signature (CEP). You can also register FLP and LLC offline through government agencies. S&P Investment Risk Management Agency will help you to register the business with highly qualified lawyers.

What are the features of the Ukrainian market

The lack of domestic capital and the need to restructure enterprises, on the one hand, and the need to reduce the technological gap, on the other, are actualizing the question of attracting foreign investment for Ukraine.

Attracting long-term foreign investments, as well as intensifying activities to promote them throughout almost all the years of Ukraine’s independence, was one of the priorities of its economic policy, which was determined by a number of official documents. Unfortunately, however, the results are disappointing today, and large Western investors are wary of doing business in Ukraine.

It is undeniable that in Ukraine there are a number of investment attractive factors that contribute to the expansion of its investment ties: a large and virtually competitively unlimited domestic market with a lot of commodity positions; geographical location at the intersection of the main transport routes between Europe and Asia; relatively cheap and skilled labor; scientific potential; developed infrastructure (ports, bridges, airfields, warehouses, communication systems, water supply) and others.

However, according to one of the indicators reflecting the degree of integration of the country into the world economy, the development of its external economic relations and the desire to create an open, export-oriented model of economy – the accumulated volumes of foreign investment, Ukraine is far behind the vast majority of countries with transformative economies.

The global financial and economic crisis in 2008-2009 and the military aggression of the Russian Federation against Ukraine in 2014 significantly worsened investors’ expectations regarding further investment prospects and security of assets in the country and made their adjustments, resulting in a decrease in income inflow and even capital outflow in certain periods. Therefore, the emerging task is not only to actively attract new capital, but also maintain existing foreign investors in Ukraine.

What are the main risks for business?

1. Talents. The company must take care of the health and safety of those employees whose lives have been directly affected by the hostilities. However, there are additional effects that affect well-being. For example, employees’ family or friends may be at risk. This may lead to reduced productivity and reduced access to IT talents located in war-affected regions of the country.
2. Cybersecurity. The conflict caused an increase in the total number of cyberattacks, therefore, it is desirable to carry out corresponding checks more often. In addition, it is important tokeep under constant review the protocols of protection against attackers. For example, Gartner Research recently identified updated models of how ransomware began to operate, which itself called into question the effectiveness of previous cyber-defense strategies. In the case of ERM leaders, the issue of determining the value of their own assets and developing a response manual is of particular importance to them. If you do this in advance, you don’t have to repeat the same process in a hurry once the cyber-attack already started.
3. Finances. As a result of the war, the prices of basic commodities will rise, thus fueling inflation. It is important for ERM managers during this period to coordinate with their colleagues all further actions related to the analysis of financial risks, as well as to prepare strategies that will help them to reduce the negative consequences of emerging threats.
4. Supply chain. It is essential to ensure that the plan of action for suppliers is laid out and thought through in case of the emergence of an unpredictable situation. It is important to review and rethink all relevant supply risks. If there are dependencies on some suppliers, they need to be loosened. In the future, there is a risk of facing a shortage of important materials and increased costs, so it is better to think of alternative logistics options in advance.

Turnkey registration service (LLC) in Ukraine – fast, convenient, with a guarantee

Any kind of business, be it a company, LLC, FLP or PIF must be registered in the tax authority in Kyiv. There are so many existing tax schemes that anyone can get entangled in them. For example, if you want to open a PIF, you will be presented with several varieties depending on such factors as:

• Type of activity;
• Future financial turnover;
• Possible profitability;
• Number of employees hired;
• Nuances of work.

All documents required for registration must be filed within a certain time frame and in accordance with the procedure prescribed in the legislation. If there are inaccuracies or errors in the documents, you can get a refusal of registration. Therefore, it is better to contact our company for preparation of documents and other assistance in registration.

The success of a company is largely determined by its business reputation. And, unfortunately, it is often under threat. For example, if rumors begin to spread about a company in the media that are not true. How to proceed in such a case? Listen to advice from S&P Investment Risk Management Agency.

What is goodwill?

There is such a thing as goodwill. It means not intangible assets, the assets of a certain enterprise that were acquired and accumulated by it in the course of its vigorous activity. Such assets include its name, reputation, professional connections, trademarks.

Goodwin has its value. As a rule, it is calculated by subtracting their book value from the market price of the assets of the relevant company. Many Ukrainian enterprises avoid mentioning the buzzer in their accounting documents. However, if a merger of two companies is planned, or a takeover of one company by another, then goodwill is suddenly remembered. After all, if you correctly justify the market value of a particular business, you can get a better price for it or demand more favorable terms of cooperation from potential partners.

In other words, the better the business reputation, the more capital it can be transformed one day.

Business reputation is protected by law, and therefore no one has the right to harm it. However, this happens quite often. And here comes another complication — how to determine the amount of damage that was caused to business reputation? After all, it is an intangible asset. The only solution — initiation by the injured party of various examinations. It is easier to prove the loss of goodwill than the extent of the decrease in that intangible asset. But on the basis of the size of this decrease the court recognizes the degree of harm caused to the company.

What has a negative impact on reputation?

There are many ways to damage a reputation. For example:

1) placing negative reviews on the Internet;

2) publishing information that is false and untrue.

Attention is paid to the smallest details. A few bad reviews may not necessarily affect the attitude towards the company. But if opinion leaders spread false information, then this can create big problems. And sometimes a real PR campaign can be deployed against a certain enterprise, which includes articles in the press, reviews, comments, and more.

In the digital age, any information is distributed instantly. The image of a particular brand can be ruined in a matter of minutes. As a result, the demand for the company’s products will fall, investors will disappear, funding will disappear.

But there is also negative information about the company, which is not aimed at harming its reputation. This information includes:

• Expressing an evaluative opinion about the company’s activities.
• Filing a complaint with the relevant authorities regarding violations committed by the company and requesting an audit of its activities.

Consequences of damaged reputation

What is goodwill? This is:

1. the ability to distinguish your business from competitors;
2. A direct consequence of your positive qualities as a leader, the use of the best technologies, the right selection of personnel and not only;
3. Determinant of a company’s value

If the reputation has been damaged, it will lead to the disappearance of existing customers.

At the same time, new clients will also not appear. Profits will disappear, the business will become unprofitable, its value will fall. How to prevent all this from happening? You must promptly perform the following actions:

1) find competent PR people who will start raising your reputation;

2) find good lawyers who will help you file your claim.

How can you protect your reputation?

First you need to file a claim with the court, and then check the following points:

1. losses must be compensated;
2. The media that wrote false information refute it;
3. Any information that discredits the company is removed from the network, and a ban is imposed on its re-distribution.

Unfortunately, it is possible to achieve compensation for damages or other impact on the defendant only if the right strategy was built and the interests of the injured party were represented in court by experienced lawyers. Just to prove the fact that false information was spread about the company is not enough.

As a rule, in court they seek to prove all the factors listed below in their totality:

1. The resulting company could boast of a high reputation. The proof of this is the high turnover, well-known partners and clients in their circles, positive reviews on independent resources.
2. The reason for the deterioration of the reputation was not a decrease in the quality of products or services provided, but the actions of other people specifically aimed at this.
3. All the negative information spread about the company is not true.
4. The result of the publication of false information was that the trust of partners and customers was lost, sales fell and more.

All cases involving intangible assets require experience and relevant knowledge. Therefore, as a rule, they cannot do without the support of a good lawyer.

Who can help with this issue?

It is best to contact lawyers with relevant specializations. In most cases, they can take part in court proceedings while being geographically in another city. Remote participation does not diminish their participation in any way and does not affect the result. If you need really competent specialists, then you will find them at S&P Investment Risk Management Agency.

Conclusions

The key to the development of any business is its business reputation. But she is extremely sensitive to any impact, and therefore harm can easily be done to her. In order to minimize its impact, it is important to respond in a timely and urgent manner. After all, this is the only way you can be sure that you will receive the satisfaction.

Business is impossible without competition. That is why the reputation of a company is so important. Since it can either attract new customers even in difficult times, or finally put an end to this brand. How to track reputational risks correctly? And, most importantly, how to minimize them if necessary? S&P Investment Risk Management Agency experts will tell you about it.

In an era of such a strong development of digital technologies and the enormous popularity of social networks, reputation has become more vulnerable than ever. Any information scatters instantly, it is difficult to control the content, and therefore any, even a slight impact, can affect the reputation.

If the reputation of one or another company is shaken, then this will instantly lead to a decrease in income levels, the main goals of the business will not be fulfilled, share prices will fall, and all this will make the risk of bankruptcy more than real.

What are reputational risks

Reputational risk – it is a danger that hangs over the good name or reputation of a business or organization. Reputational risk can arise in the following ways:

• Directly as a result of the actions of the company itself
• Indirectly, as a result of the actions of an employee or employees
• Regarding other peripheral parties such as joint venture partners or suppliers

Main types of reputational risks

There are two such varieties:

1. External. They are outside the company itself

Such risks include black PR from competitors, illegal actions of partners, indecent behavior may be actions on the part of partners that caused dissatisfaction with the audience, black PR from competitors, and even the behavior of influencers and more. That is, everything that the company is not able to control.

2. Internal. It is about the actions of the company’s employees

What can lead to internal risks?

1. Managers and employees

If people with a negative reputation are at the head of the company, then one way or another it will spread to the entire company. The reputation of an enterprise and its management are inseparable. The consequences of this — loss of income, customers and investors.

45% of people perceive the image of top managers and the image of the company as one

25% of the company’s value is the result of reputation alone

The problem is that even if the scandalous leader retires, it will not be so easy to fix the situation. All the same, public explanations and apologies will be needed. And even if the company begins to actively work to restore its former reputation, it may take many years in the end.

But not only the management of the company can influence the reputation of the brand, but in fact each of the employees. It is enough just to write unverified or thoughtless information on social networks. It only takes one phrase, which can be misinterpreted, to start this whole process.

2. Negative content

On the web, content may appear that will show the company in a negative light. It can be articles in the media, customer testimonials and more. If there is a lot of such material, then the level of trust in the company will noticeably decrease.

If a company is involved in some events that cast a shadow on its reputation, then this will attract maximum interest from the press. And in this situation it is necessary to act immediately. Otherwise, new facts will be constantly added to the available information, which in most cases will not even correspond to reality. That is why it is so important to start as soon as possible to apologize, refute unconfirmed data and order positive texts in special reputational agencies .

3. Social networks

Now the main struggle of the company for customers and for a positive image takes place in social networks. Any interesting brand has thousands of followers. People follow all the news related to him. Therefore, any negative moments spread in an instant.

Suffice it to recall the Nestle company, which in 2010 was simply attacked by angry Facebook users. Every day they posted a video on the wall of Nestle, which described the harm from using palm oil. All their actions had corresponding consequences for the company.

4. Loss of personal data

A good security system should be installed on the website of every self-respecting company. Moreover, it must be updated regularly. Otherwise, the simplest hacker attack will lead to the loss of trust of partners and customers.

An example of this — Accelion, a software development company. Its website was hacked, due to which some information owned by the company was made public. It was an extremely embarrassing moment.

5. Cost and quality of services

Sometimes employees, after their dismissal, in retaliation, disclose information about the company that relates to the financial aspects of its activities. Often this information can have an extremely negative impact on the company’s reputation. For example, if in recent years her business has not been very successful, then this fact is unlikely to help attract new investors.

6. External Business Change

Any changes of an external nature may adversely affect the company’s activities. For example, a change in administration has a direct impact on the success of doing business.

If the reputation of the brand has been damaged, then this is fraught with many negative consequences — income is declining, it is becoming more and more difficult to hire valuable personnel. Therefore, no matter how difficult it is to minimize reputational risks, it is even more difficult to work on restoring a damaged image.

Peculiarities of reputational risk management

• It is important to know exactly what your stakeholders expect from you

If you know exactly what your customers want, it will be much easier for you to give them what they want. But do not rush to promise them what you are not able to give.

After all, this will only bring you harm. Never underestimate a dissatisfied user.

• Brand reputation needs to be measured

To date, various reputation metrics have been created. With their help, you can determine the level of user confidence in your company, as well as how recognizable it is in the media space.

• Stay positive communication

Reputation should be carefully worked on. After all, absolutely everything that enters the information environment has a direct impact on the reputation. It doesn’t matter if it’s positive or negative. And since there is no way to completely protect yourself from the negative, you need to actively work on building up the positive.

If positive changes are taking place in your company, immediately let all your employees, partners and customers know about it. Whatever incident occurs within the company or in its close environment, be sure to show your reaction to what happened. If you’ve done something wrong, admit it. Respond readily to both positive and negative comments.

• Be aware of rehearsal risks when developing your strategy

Analyze all the weak points of your company. Determine what exactly in its activities can be considered a weak point. Come up with the most likely scenarios where the public perception of your brand could deteriorate.

Think over the main markers that would signal the need for certain measures. For example, if customers complain about the cleanliness in boiler rooms, then this means that you need to seriously improve the quality of service.

• Consider how you will respond

If things go according to a negative and undesirable scenario, you need to respond quickly, promptly and, most importantly, thoughtfully. Therefore, it is important to plan in advance how you will act in various crisis situations.

A good reputation is the key to success!

It is a fairly well-known fact that a positive image of a company leads to an improvement in the demand for its products or services. And the decline in business reputation, on the contrary, slowly but surely leads the company to collapse and bankruptcy.

Conclusions

The profit of your company directly depends on reputational risks. The reason for such risks may be dissatisfied customers, dishonest competitors and even employees. Therefore, you should always be on the alert and monitor the information field in order to identify the threat in time.

It is important to assess possible reputational risks in time. And after that, it is already possible to approach the preparation of a strategy aimed at eliminating them. This may be a rebuttal in the press, work with dissatisfied customers and much more. The strategy you have worked out should be flexible so that it can be changed and adapted to this or that situation.

Well, if you want to have a guaranteed strong reputation, you better use the services of a reputation agency. Its experts will analyze your rehearsal background and give you the necessary recommendations to strengthen your brand image.

Various conflicts often develop into litigation. The conflicting parties do not want to solve the problem through negotiations. And the reason is that each of them believes that she is right. In such cases, it is optimal to “resolve” mediation will help. What is this new phenomenon? When exactly is it applied? What are the main features of mediation? All these questions are answered in the proposed article.

Mediation – This is a way to resolve a dispute with the participation of an intermediary (mediator) through negotiations. Mediation – the best way to resolve many conflicts, especially those in which it is necessary to maintain a good reputation and previous relationships.

Plectrum – who is he?

Plectrum – an unbiased and independent specialist whose task – to help the conflicting (disputing) parties in resolving the conflict (dispute). It is he who organizes the mediation and conducts it. An important feature of mediation is that:

• decisions made by the parties mutually and independently are aimed at satisfying their own interests and needs;
• The mediator does not make decisions instead of the participants in the conflict (dispute) and does not offer options.

The tasks of the mediator

– control the negotiation algorithm;

– analyze the conflict, identify the interests and needs of its parties;

– work with the emotions of customers, establish constructive feedback;

– explore new facets of relationships and conflict resolution options;

– check the feasibility of the requirements and the ability to fulfill the agreements;

– help the parties to the conflict (dispute) take responsibility for the solution.

Plectrum function

The mediator, as mentioned above, – unbiased and independent third party. His goal – contribute to conflict resolution. In this regard, the mediator helps to analyze the situation, identify conflicting positions in the views of the parties, at the same time find common interests and understand what details are important for each of the parties. As a result of the work, identify common ground on which a mutually beneficial solution can be formed. The mediator focuses not on the legal nuances of resolving the dispute, but on the interests of the parties and ways to satisfy them.

Once again, we focus on the fact that the functions of the mediator do not include the formation or proposal to the parties of the solution itself (methods for resolving the dispute). Its function is to establish a communication process, to inspire mutual trust, that is, to create a trusting and creative atmosphere for the parties.

After the parties have worked out a preliminary solution themselves, the mediator should help them determine the criteria according to which they will evaluate different options in order to form an already optimal solution. And after the parties to the conflict settle on a mutually satisfying solution, the mediator helps them make sure that the chosen solution is realistic. That is, it conducts a so-called crash test and says what further steps the parties will take.

The mediator pays special attention to working with the emotional component of the conflict (dispute). This side is usually not taken into account by judges or arbitrators. They believe that emotions are irrelevant and cannot affect its outcome. But we are sure that broken relationships and unexpressed emotions – it is something that often results from conflict and, once started, feeds it. Lawyers are faced with the practice when the parties, under the influence of negative emotions, try to destroy each other with legal wars during the conflict. And it arose only because they misunderstood each other. This is a state called “together into the abyss”, the name of which speaks eloquently for itself. The mediator helps the parties to restore their previous relationship and establish normal communication between them. This serves as the basis on which it is possible to form realistically achievable interests and work out solutions. If there is no such soil, it will not be possible to erect a solid building of relations. The mediator is sure that if the parties have biased relations, the work with interests will be ineffective, and the – incapable of implementation.

Plectrum value

In Ukraine, the status of a mediator has not yet been clearly defined in any legal act. However, it should be noted that a similar situation exists in some other countries – for example, in the Netherlands. Despite the fact that mediation is a fairly demanded service there, it is not legally defined. However, the legislation of Ukraine contains norms that are a good basis for the use of mediation in legal proceedings practice.

One of the priorities of the Council of Europe and the European Union as a whole is to help their states in quick and fair justice, as well as in the development of alternative ways to resolve conflicts and disputes. This assistance is based primarily on the formation of standards, according to which EU members must adapt their own legislation to their legal obligations.

In the Strategy for reforming the judiciary, legal proceedings and related legal institutions for 2015 – 2020, which was approved by the Decree of the President of Ukraine No. 276/2015 dated May 20, 2015, the clause is spelled out: “… expanding the methods of alternative (out-of-court) settlement of disputes, in particular by expanding the list of categories of cases that can be resolved by arbitrators or considered by the courts in summary proceedings; the introduction of effective procedural mechanisms to prevent the consideration of cases in the absence of a dispute between the parties; study of the expediency of introducing magistrates».

The first mention of mediation in the current legislation is contained in Articles 2 and 7 of the Law of Ukraine “On Free Legal Aid”; No. 3460-VI of 06/02/2011. There she is included in the list of legal services.

The Rules of Advocate Ethics of Ukraine also mention mediation. The document states: the actions of a lawyer acting as a mediator must comply with internationally recognized ethical standards of mediation.

The conditions, volumes, content and procedure for the provision of the social service of mediation (which includes mediation) are also prescribed in the order of the Ministry of Social Policy “On approval of the State Standard for the social service of mediation (mediation)” No. 892 dated August 17, 2016.

Mediation as a new phenomenon in legal practice has contributed to the emergence of a new profession – mediator. For example, a specialist in mediation and conflict resolution in the socio-political sphere has appeared in the Classifier of Professions. We are sure that it would be more expedient at the legislative level to more clearly define the problems of the legal status of mediators. Also, prescribe the legal (professional) grounds for activity, age restrictions (the presence or absence of such). We believe that a mediator can be a person of any profession, but versed in alternative ways of resolving disputes (conflicts). By the way, the presence of professional skills of a psychologist or a lawyer, expert competence in a certain area sometimes even more harm than contribute to mediation. Such professional skills push the mediator to be too active, which makes it difficult for the parties to find a way out on their own. The mediator should work with interests, and not advise using professional experience of the past.

Responsibility of the mediator

The Draft Law “On Mediation” is under development, in this regard, the issue of legal liability remains open.

While there is uncertainty in the legislative field, it is necessary to establish what methods should be used and what should be taken into account in order to develop an effective concept.

First of all, it is necessary to distinguish between different cases of liability: 1) as a measure of influence (influence) on the violator of rules and norms; 2) as a mediation environment, for which the mediator is responsible in the process of preparing and conducting mediation.

We will focus on responsibility as a measure of impact (influence).

We are convinced that the degree of responsibility of the mediator should come from his powers and role in the mediation process. As already mentioned, one of the main factors in the generally accepted facilitative mediation model, now most practiced in Ukraine, is that the mediator does not make or offer solutions, and does not even advise the parties on solutions. However, he must contribute to its effectiveness: is the optimal structure of the process, ensuring its efficiency, maintained; whether work has been done with the emotional environment of the parties; whether progress is taking place at a pace that is comfortable for all participants in the dispute, etc. The result of mediation depends on the quality of these components. In our opinion, the issue of the responsibility of the mediator should be taken precisely in the plane of ensuring the process and observing the main principles of mediation, especially those related to confidentiality.

Conclusions

Every person (or legal entity) has the right to choose which method of protection of his own interests is most convenient for him . One of these is mediation. This is an alternative tool to other methods of conflict resolution, which is worth studying and at least once trying to apply in your life or professional activity, if it is related to conflicts and disputes between. And even if there is a conflict between enterprises, you need to know that behind the interests of any company are the interests of individuals – leaders, leaders, managers, owners. By the way, mediation is also gaining popularity in the socio-political environment. For example, in resolving misunderstandings and conflicts between authorities and communities, as well as in protecting consumer rights. Man – man, man – enterprise, enterprise – enterprise, community – power, power – power, which can be represented by some political force. And this is not a complete list of relationships in which conflicts of interest may arise and where mediation can be effectively used.

Any company sooner or later goes through a painful period – a crisis. And reputation, the most valuable asset, is the first to suffer. It cannot be quickly restored or recreated: such factors take years, if not decades, to shape.

An example would be the authority of Nike. According to Forbes, the company’s brand «fell out» from the best in the ranking only because during the basketball game, one of the players injured his leg due to a broken shoe.

And at the end of the match, Nike’s shares lost 1% and its reputation fell to 15th position.

No one is immune from the crisis, especially a sudden one. These include, for example, the COVID-19 pandemic, which has made its adjustments in all areas of life. And how an enterprise responds to such a challenge determines its credibility and relations with consumers, partners and customers in the future.

Stages of crisis.

Pre-crisis Period. Usually, a crisis is preceded by a pre-crisis period. There are suspicions that something is wrong, but it’s just not clear what it is. This time segment consists of three distinct stages.

The first stage is simple – negligence. Certain groups in the company or its individual employee did not do the job. And this happens periodically. Failure to meet sales plans, production, quality loss, failure to meet production schedules… As a result, the market is lost, and then there is an excessive loss of valuable personnel. All these are examples of negligence. Senior management did not notice appropriate threats to business at this stage.

When the problem is finally addressed, it is the second stage: during which its management denies the existence of the problem. The management hopes that it will «resolve by itself».

When problems do not disappear, but only accumulate, the company moves into the third and final stage of the pre-crisis period.

Let’s take an example. The brewery Schlitz changed its recipe and therefore began to lose part of the market (the problem was not noticed in time due to the strike at the facility of industry leader Anheuser-Busch). The whole pre-crisis period was a typical sequence of periodic failures: unsatisfactory product promotion, frequent changes of management, mutual accusations, and general dissatisfaction at all levels of the enterprise. Even before the situation stabilized, the company was absorbed by a smaller competitor.

The pre-crisis period is only the beginning of the crisis, so it is usually not visible to others. And if top managers or executives are able to acknowledge the danger, they can still prevent a crisis from occurring.

The early detection of systematic non-performance is in fact one of the main factors of senior management responsibility. But in order to do so, managers must be aware of the quality of all operations at all levels.

Crisis Period. At this time, managers cannot hide problems either from themselves or from employees of the enterprise. The next stage of the uncontrolled crisis is indeed a period of crisis.

All crises harm business, and this damage can be expressed in a ruined career or a mental breakdown of the employee, in lost means.

When a crisis begins, there is no time for blame or reproach. All leadership can do is respond adequately to the challenges and try to minimize the consequences.

Post-crisis Period. The final phase of an unmanageable crisis is characterized by uncertainty and upheaval. Hopes for the company’s past success are lost. Banks are trying to recover at least part of their investment.

The last phase of an ungovernable crisis is going to foresee dramatic changes. If the company is lucky, another investor will take it under his «wing». But most often there is a restructuring of the company under the law on bankruptcy or financial insolvency. If one of these outputs is not used, the enterprise may be liquidated or absorbed by another company.

When a crisis is managed, the sequence of its periods is predictable.

In the post-crisis phase, radical changes are taking place in business, which entails a shift of control to new people. Therefore, the primary goal of crisis management is to change the sequence of events. The ways in which the sequence of events can be changed, and the program of successful crisis management will be described below. The right preparation for management usually prevents some crises or minimizes the impact of those that cannot be avoided.

How to stimulate sales to overcome the crisis?

There are many ways to encourage sales. The choice of the most optimal one depends on the type of activity of the enterprise.

So, if the trading companies need to increase sales, then selling-off shares is quite suitable.

If you need to improve the sales efficiency of the manufacturer, the following will do: discount cards; sending commercial proposals to potential customers (one needs to have such a base); comprehensive solutions for customer service; use crm-systems to process client requests.

How to analyze company objectives during crisis?

First of all, we need to start with a diagnostic. It will create an objective picture of the company’s activities. Upon completion of the diagnosis, it is necessary to draw up a report in which to present the main facts, conditions, and trends necessary for setting goals. On the basis of this, develop a strategy for the exit of enterprise from the crisis and operational solutions for management.

The quality of the outcome will depend on the clarity, relevance, and timeliness of the objectives. It is important to remember that the goals must be realistic and achievable.

The main characteristic of anti-crisis business planning is its short-term nature. This is not to suggest that anti-crisis business planning is by no means long-term, but it will have to be revised and adjusted more frequently.

Therefore, the business plan should be drawn up for the minimum possible period, with monthly analysis of the achieved goals and adjustment of further tasks according to the results and the state of the market. It is important to note that although the implementation of the overall strategy is divided into several stages, it remains the same, and only the intermediate goals and plans are adjusted.

Business planning is often discussed in the management environment in the context of an unstable Ukrainian economy and a rapidly changing social and market environment. But it is at such times you need to be able to plan your business correctly in accordance with the economic realities.

Adjust strategy to keep the company afloat during the crisis

The fundamental advantage of crisis planning is that it is possible to regulate and adjust the actions to keep the company on a given strategic course of activity.

If we compare actual and planned indicators, we will identify the factors of deviation. They will help diagnose problems now.

Once the strategic and operational objectives have been defined and the problem points have been identified, an anti-crisis business plan can be drawn up.

Personnel management during business crises and conflicts

By «personnel management» in a company one should understand both the actions of the personnel service and the system of work with employees as a whole, that is designed to ensure their compliance to their roles (functions) in business processes. First of all, these are the actions of the line managers.

Management of an enterprise means control over all factors of production and all types of resources used. But, of course, the first priority is personnel management.

Each crisis is a unique phenomenon, so effective management requires considering the ongoing processes inside and outside the company. There are also a number of crisis management techniques: they are applicable in general but can be used in each particular case. Such methods include the following:

1. Everyone should understand that the leader really controls the situation. This is the main thing for the manager when managing staff in a situation of a crisis.
2. Select a professional team to work in a crisis situation, optimally assigning roles, tasks, and responsibilities. Each staff member must be given an assignment.
3. Do not panic and lose your cool, do not react too violently or hysterically to the situation, as subordinates will do the same.
4. Deliberately act in a slow motion so that subordinates think everything is under the control of the supervisor and goes according to the plan.

Personnel policy is also an important component of personnel management. The aim of this policy is to ensure an optimal balance between the preservation and renewal of personnel in accordance with the needs of the enterprise and the state of the labor market. In the event of a crisis, the company applies four types of personnel policies.

1. Passive personnel policy. The management of the company does not have a well-defined algorithm of actions in relation to personnel. Therefore, in a crisis in the company, human resources activities are reduced at best to eliminate negative consequences of work.
2. Reactive personnel policy. The company’s management monitors the staff for the symptoms of the crisis (lack of adequate motivation for high-productivity work, as well as a sufficiently skilled workforce to solve the problems, the emergence of conflict situations) and, by necessity, takes measures to address the crisis.
3. Preventive personnel policy. The management of the company has a reasonable vision of the development of the situation, but it does not have the means or management tools to change it.
4. Active (rational) personnel policy. The management of the company has objective data and a reasonable vision of the development of the situation, as well as the means and management tools to change it.