Management. Crisis and Change Relationship

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Introduction

There are a number of different ways for a crisis and change to interrelate. In some situations, a crisis occurs prior to change. In others, it takes place in the aftermath of the latter. It is also possible for a crisis to develop alongside the actual process of organizational change being implemented, which in turn may result in setting the mentioned process off its proper course. The danger of these scenarios is quite apparent, as each of them may lead to the shutting down of an organization.

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The Reason for the Connection between Business and Change

The above-stated suggests that the main reason why there is indeed a discursive link between the notions of crisis and change, is that both notions are strongly associated with the notion of uncertainty – something that explains the existence of insurance companies. Apparently, there is nothing too odd about the situation in question – the factor of uncertainty has been long ago defined as the main building block of the universe. The very fundamental laws of nature presuppose that there a number of alternative ways for a particular event to develop, and that it is impossible to predict which of these scenarios will be actualized. Partially, this provides us with the insight into why managers consider the task of reducing the factor of uncertainty/risk, within the context of how they go about addressing their professional responsibilities, as being a particularly challenging one. Nevertheless, it represents the matter of a crucial importance to be able to cope with this task successfully on a daily basis, as the mean of preventing the affiliated organizations from becoming much too vulnerable to crises. The reason for this is apparent – crisis-prone organizations cannot be considered competitive.

The Impact of the Crisis on the Organization

There are many accounts of how organizations were able to manage being affected by a crisis. As these accounts indicate, a crisis is indeed capable of triggering the process of change. This situation, however, does not make much of a sense, as there are a number of strongly negative connotations to the very notion of crisis. This is why, as practice shows, there are both: negative and positive aspects to just about any process of organizational change. In its turn, this helps to explain why managers are being usually required to consider both: long-term and short-term effects of just about any change, embarked upon at the time of crisis.

In this respect, one of the main dangers, can be deemed the loss of a strategic perspective. As a result, an organization may end up having its structural integrity severely undermined (Pauchant & Mitroff, 1988). Even though the outbreak of a crisis can hardly be seen in any positive light, there have been instances of organizations growing progressively strengthened, as a result of having been exposed to the crisis-related tribulations. This, of course, calls for the thoroughly objective assessment of what accounts for the relationship between a crisis and change.

The most obvious effects of a crisis on the proper functioning of an organization are as follows:

  1. the amplification of the existing dysfunctions within,
  2. the deterioration of the sense of a corporate solidary in employees,
  3. the weakening of this organization’s systemic integrity. At the same time, however, it needs to be mentioned that a crisis can be used to induce many positive changes in organizations.
  4. This is especially being the case when the removal of the seemingly ‘impossible’ obstacles on the way of the proper functioning of a particular organization is at stake (Tsoukas & Chia, 2002).

In order to increase the likelihood for an organization to be able to benefit from a crisis, managers must identify the possible causes that have triggered it, in the first place. Then, the exposed deficiencies of how this organization used to tackle the reoccurring operational challenges in the past, should be addressed by the mean of organizational change. In this respect, any prolonged delay will prove inexcusable, as it would contribute towards making the ongoing crisis even more severe (Wilkinson & Mellahi, 2005).

It appears that it is specifically the structurally/operationally flexible organizations that are more likely than the rest to come out of crises largely unaffected. The validity of this suggestion can be illustrated, in regards to the fact that, contrary to what it should have been the case, during the course of the recent financial crisis; many companies were nevertheless able to increase their rate of profitability.

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There are a number of formally successful organizations. This, however, does not automatically mean that these organizations are less vulnerable to crises than the not so successful ones. In most successful organizations, the process of change management never stops, while remaining the essential part of the deployed business strategy (Wilkinson & Mellahi, 2005). This is why the outbreak of a crisis can barely affect these organizations to the extent of bringing them to the point of bankruptcy/closure. Organizational leaders ought to agree on a common strategic framework that can viably tackle an impending crisis. This calls for teamwork. Crisis management in the corporate sector cannot be done by a single individual. Unless collective effort is put in place, even minor crises can overwhelm an organization and its employees.

As it was mentioned, change can simultaneously be both: the crisis’s actual agent and its inhibitor. In order to lessen the likelihood for the undertaken change to end up triggering a crisis, one of its main objectives must be concerned with establishing the objective preconditions for the would-be-affected people’s well-being not to suffer any negative effects. This, of course, implies that the maximization of profit can no longer be considered the only legitimate purpose of just about any commercial organization’s existence – especially at the time of crisis (Kilduff & Dougherty, 2000). Apparently, while addressing a crisis, managers must act in the intellectually flexible manner.

What has been mentioned earlier, suggests that organizations should tackle the outbreak of a crisis in the way, consistent with what happened to be the affiliated circumstances. In this respect, managers need to remain thoroughly aware of what accounts for the main difference between a crisis and change – whereas, the former can hardly be predicted ahead of time, the latter is the matter of one’s conscious planning. Therefore, while addressing a crisis, managers must be prepared to deal with the shortage of time and with a number of different communication-related difficulties. One of the possible consequences of this is the loss of good reputation, on the part of the affected organization – especially if this crisis results in sparking disputes among the employees (Armenakis & Bedeian, 1999). The fact that people’s reaction to crisis is usually emotional does not help the situation.

Planning for a Crisis

Thus, there can be only a few doubts that planning for a crisis represents one of an organization’s primary objectives. The process’s essential part is identifying and classifying the potentially applicable risk-factors, capable of initiating a crisis. Another important activity, associated with the process, is providing every particular employee with instructions, as to how he or she will need to act, in case of a crisis. Additionally, managers must be willing to apply a continual effort into conceptualizing the would-be-used organizational chart, creating the system of ‘emergency communication’ and teaching employees the skills of a teamwork in time of a crisis (Turner, 1976; Bigley & Roberts, 2001).

References

Armenakis, A.A. & Bedeian, A.G. (1999). Organizational change: a review of theory and research in the 1990s. Journal of Management, 25 (3), 293–315.

Bigley, G. & Roberts, K. (2001). The incident command system: High reliability organizing for complex and volatile task environments. Academy of Management Journal, 44 (6), pp.1281-1299.

Kilduff, M. & Dougherty, D. (2000). Change and development in a pluralistic world: the view from the classics. Academy of Management Review, 25 (4), 777–782.

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Pauchant, T.C. & Mitroff, I.I. (1988). Crisis prone versus crisis avoiding organizations: Is your company’s culture its own worst enemy in creating crisis? Organization & Environment, 2 (1), 53–63.

Tsoukas, H. & Chia, R. (2002). On organizational becoming: rethinking organizational change. Organization Science, 13 (5), 567–582.

Turner, B.A. (1976).The organizational and interorganizational development of disasters. Administrative Science Quarterly, 21 (3), 378–397.

Wilkinson, A. & Mellahi, K. (2005).Organizational failure: Introduction to the special issue. Long Range Planning: International Journal of Strategic Management, 38 (3), 233–238.

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