Organizational Crisis. Part I: Definition and Conceptualization

Abstract

Initially, a two part definition of organizational crisis is presented, related to their significance and prevalence and reflecting either (a) opportunities to meet organizational goals or (b) demands or threats that may prevent an organization from attaining its goals or limiting its abilities to meet them and (c) which the organization seeks to resolve because outcome stakes are important and the ideal resolution strategy uncertain. Thus, crises have both objective and subjective aspects. A number of elements of the definition are discussed in terms of their implications for organizations and their subsystems. Finally, three major aspects of our conceptualization are described in terms of empirical examples from our investigations followed by a typology of eight kinds of organizational crisis based upon three dimensions, (1) control, (2) opportunity-threat, and (3) organizational susceptibility and vulnerability to crisis. Part II will deal with strategies and responses to crisis.

Conceptualization of Crisis Situation in a Company / Įmonės Krizinės Situacijos Konceptualizacija

“…They deal with crisis reasons and causes, bankruptcy, crisis management, company state estimation, bankruptcy prediction and its methods. Characteristics of crisis situation were analyzed by Augustine (1995); Ayres (1996); Booth (2000); Burn, Redwood (2003); Demirguc-Kunt, Detragiache (1998); Hart (1993) ;Hwang, Lichtenthal (2000); Milburn et al (1993); Ravid, Sundgren (1998); Rogov (2006) ;Jasilionienė, Tamosiunienė (2009); problems of crisis management were discussed in the works of Ashcroft (1997); Alas (2008) ;Boin, Lagadec (2000); Darling et al (1996); ; Davidavičienė (2008); Donoho (1994); Escarraz, Chong (1998); Fink (2002); Kurosheva (Курoшева 2002); Lalonde (2004); Maynard (1993);Milesi-Ferritti, Razin (1998); Mitroff (2005); Murphy (2006); Ponikvar (2009);Paraskev (2006); Parsons (1996); Pearson, Clair (1998); Ulmer et al (2007); Valackiene Virbickaite (2009); causes of crisis and bankruptcy in a modern company were dealt with by Argenti (2005); Birch (1994); Grigaravičius (2002); Kaminsky (1998); ; Martin (1991); Preble (1997); Ren (2000); Rosenblatt, Sheaffer (2002); Rosenthal, Charl...…”

“…Crises in state are often described in political, economical or cultural context National crisis (Denis 1993;Lagadec 1996;Offer 1996) Necessity of systemic research, restoration of social structure (Meyer et al 1990) Operation crisis Inertia, paralysis, fl urry (Denis 1993;Pauchant, Mitroff 1995) Necessity to identify new and effi cient operations (Milburn et al 1993;Denis 1993) Relation crisis of the whole system members Confl icts, competition (Rosenblatt et al 2002) Cooperation, alliance, coalition (Rosenthal et al 1989) Behavior and stress crisis Stress, unconsidered behaviour (Lagadec 1996) Identifi cation of stress source, analysis of decisions (Milburn et al 1993) Value crisis Banality, routine (Toft, Reynolds 1994;Pauchant, Mitroff 1995;Perrow 2003) Solidarity (Kaniasty, Norris 1995) Learning crisis Seeking for quick results and standards (Hedberg 1981;Rosenthal et al 1998) Experiments (Hedberg 1981;Meyer et al 1990) Company is a complex socio-technical system, which performs in the complicated environment, therefore company crises are closely related to global and crises in state, for example, economic crises, which often appear as the cause of crisis in a company, as well as to psychological crises which can become the consequence or the cause of it.…”

Turning around failing organizations: Insights for educational leaders

“…There is often a strange feeling of complacency mixed with a sense of uncertainty (Milburn et al 1983a). There is a noticeable tendency to fight reality (Bibeault 1982;Goldstein 1988).…”

Intensity, timeliness, and success of incumbent response to technological discontinuities: a synthesis and empirical investigation

“…Staw et al (1981) posit that, under imminent threat perception, organizations centralize authority, restrict information dissemination and show a tendency toward well-learned or dominant responses. Various studies supporting their theorizing show that these threatrigidity effects significantly attenuate reaction speed (Milburn et al 1983). Apparently, threat-rigidity also causes decision makers to focus on efficiency criteria and to restrict budgets for exploratory initiatives (Thomas et al 1993;White et al 2003).…”