Crisis management requires agility in decision making and creativity

Alireza Mokhber Dezfuli, Deputy CEO of Khuzestan Steel Company in Employee Health Affairs: The acceleration of global economic developments and the multiplicity of parameters affecting the activity and development of organizations have led to risk assessment and crisis management become an integral and natural part of an organization’s plans. Today, crises are no longer considered an unusual, accidental, and rare occurrence, but have penetrated the taropod of societies. Iran’s steel industry, despite the broad outlook, today faces serious challenges such as sales restrictions, supply of raw materials, logistics infrastructure, etc., which ignoring any of these challenges will put the steel industry on the verge of entering a difficult crisis. .

A crisis is an event or set of events that has a negative and catastrophic impact on the natural functioning of the organization, leaving vital access and consequently its survival and imposing legal, financial, political and governmental consequences on the organization. With this brief definition, crisis management in an organization has several stages:

Prevention: This stage includes a set of measures that aim to prevent the occurrence of accidents or reduce their harmful effects, assesses the level of risk of the company and with the necessary studies and measures, reduces its level to an acceptable level.

Preparedness: A set of actions that increase a company’s ability to go through various stages of crisis management. This phase includes gathering information, planning, organizing, creating management structures, training, providing resources and facilities, training and maneuvering.

Countering: Immediate measures and services are provided following a crisis, which is done with the aim of saving human lives and property, providing relative welfare for them and preventing the spread of damage.

Reconstruction and Rehabilitation: Reconstruction includes all necessary post-crisis measures to restore normalcy to damaged organizational complexes, taking into account the characteristics of sustainable development, safety standards, public participation and cultural, historical and social issues of the region. Rehabilitation also includes a set of measures taken to restore employees’ physical, mental and social condition to normal.

In a crisis, it should be noted that a lack of accurate and prompt response usually has very undesirable consequences; So both time and accuracy in decisions are important. In times of crisis, there is a need to make new and creative decisions, and one must also be wary of the factors that exacerbate the crisis. With this framework and without regard to priority, the following factors cause crisis management in an organization and their absence causes the crisis to spread:

Recognize the signs of crisis

Existence of an effective risk and crisis assessment system

Existence of conscious, learnable and consultable management

Existence of participatory management

Organizational affiliation

Healthy and effective communication between management and employees

· Having an executive plan and appointing executives and continuous monitoring of effectiveness

Review programs according to new dimensions of the crisis

· Agility in decision making

Employee awareness

Convincing and gaining employees’ trust in the effectiveness of the measures considered and accompanying them

According to the definition provided in the field of crisis management and in the same framework, Khuzestan Steel Company, as a company that is proud to receive the golden statue and the highest level of organizational excellence in Iran, in the form of its strategic plan, considering threats and opportunities and monitoring the situation. Economic, political, social and security, including the cruel and inhumane sanctions of the domination system and in coordination with the higher authorities, in the form of the Crisis Management Committee and in part of its passive defense, has tried to assess the current situation, predict future conditions and forward scenarios. Take the necessary measures, collective wisdom and participatory management to overcome global and regional crises safely. Perhaps the most tangible crisis today for organizations and businesses is this disease. Khuzestan Steel Company from the beginning of the invasion of the virus to the world and the country, by forming a committee to deal with Corona at the highest level, with the grace of God and the support of senior company management, steps to prevent, prepare and deal with crisis management with timely and agile decisions. Daqiq has successfully passed and during this difficult period, has managed to achieve numerous records in production. At the same time, it has not neglected to fulfill its social responsibilities in this area and has been praised as one of the top organizations in supporting countermeasures in Khuzestan province.

The challenge of selling and the corona are the main causes of the crisis

Like any other business, the country’s steel industry faces critical and risky risks in the field of domestic sales and exports. The oppressive US sanctions against our country have limited the target export markets and customers, and by creating challenges in domestic transportation and severe restrictions on mooring ships from different shipping lines in the country’s ports, have increased the cost of transporting export goods and reduced export profits. Is. On the other hand, the uncertainty and constant changes in business practices and laws and regulations of the country and the issuance of directives and regulations also destroy the predictability. Government policies to regulate the market also increase or decrease steel exports according to domestic demand, which in turn damages the credibility of exporters in international markets and, as a result, the loss of part of the target export markets. On the other hand, Corona virus is another critical risk that has affected the economy in all international societies and has had a great impact on the performance of various industries, including the steel industry, and therefore, the need for coherent risk management in all sectors of the industry. It feels.

In this regard, Khuzestan Steel Company in order to reduce risks related to sales, has put the following measures on the agenda:

Balancing domestic sales and exports based on market elasticity

· Development of export target markets and increase of export capacity

Presence in markets that are less sensitive to sanctions

Diversification by sales methods

Sale of steel products in exchange for receivables

· Increase export capacity

Limitations on the realization of visions

According to the vision of 1404 and the production plan of 55 million tons of steel in the country, the supply of raw materials, including iron ore, is one of the critical risks for steel companies; Because the country’s domestic mines have begun to move towards completing their downstream value chain, the risk of access to raw materials for steel companies and Khuzestan Steel Company, which produces intermediate steel products and needs a large volume of iron ore in its future development plan, has doubled. have made. On the other hand, the country’s transportation infrastructure, assuming the required iron ore is provided for its transportation, is weak. In this regard, Khuzestan Steel Company, in accordance with its set strategic goals to supply the required iron ore, has moved to complete its value chain upstream. In this regard, we can focus on the field of exploration of new areas as well as the acquisition of shares in the mines.

Also, the challenges in the field of transportation and logistics cannot be ignored. Shipping companies are less inclined to ship steel products from Iran due to the intensification of US sanctions and the increased risk of trade with Iran, which leads to the loss of export customers and increased shipping costs. Also, wear and tear and lower capacity of transportation network and fleet development projects, especially rail transportation, is one of the critical factors in the steel industry that increases transportation costs and reduces the production of steel companies. In the field of technical knowledge, technology and machinery, we can point to the obsolescence of production equipment technology and lack of access to new technologies due to sanctions, which cause serious crises in all areas of industry, and these cases in the steel industry cause inability to produce valuable products. Increased and consequently reduced customer satisfaction with the variety of products produced by steel companies. Low efficiency of maintenance and repair of equipment and machinery, shortage and low quality of spare parts, price fluctuations of main items and international sanctions are some of the factors that have caused the crisis in the field of machinery; These factors increase emergency equipment shutdowns in steel companies. The monopoly of some knowledge and information, the lack of technical and engineering knowledge in production methods and the shortage of technology suppliers in the country are also among the crises of technical knowledge and technology that prolong the supply of parts and equipment as well as services in steel companies.

In the end, I consider it necessary to sincerely appreciate the wise efforts of the colleagues of the Journal of Metal News in promoting knowledge and exchanging successful experiences in the important field of the country’s industry, and I wish you, God Almighty, good health and stability.

Public Relations of Khuzestan Steel Company