Understanding Business Failure: Learning and Un-Learning From Industrial Crises

Crisis management theory, developed through the study of industrial disasters and socio-technical failures, is applied to three cases of business failure. The principle objective of the research reported in this paper was to identify whether or not successive failures could have been avoided through organizational learning from similar prior events and what factors might have contributed to or prevented learning. The research also aimed to establish whether or not theoretical frameworks for analyzing and understanding industrial disasters and socio-technical failures are applicable to business failures. Using detailed case analyses of the failures of Johnson Matthey Bank, the Bank of Credit and Commerce International and Barings, the paper illustrates a series of remarkable similarities in these business failures. It also demonstrates an apparent inability of the management involved in the later failures to learn from what had happened before. Organizational culture is singled out as the main contributing factor in these failures. This paper, in part, proves the case for applying industrial crisis management theory to business failure.     

Pulling the Same Way? A Multi‐Perspectivist Study of Crisis Cooperation in Government

After crises have occurred, limitations in crisis management capacity often cause surprise and frustration. An explanation that frequently recurs in evaluations is a lack of efficient cooperation between organizations. Even though crisis cooperation is anticipated and planned for, it seems to create several problems. How is cooperation possible between organizations with different mandates, cultures and professions? This paper aims to identify factors that strengthen or hamper cooperation in crisis management between Swedish government agencies. A rationalist organizational and a social psychological perspective are applied, respectively, to demonstrate the interdependence of organizational context and human behaviour. One conclusion is that long‐term organizing and exercises could help authorities to identify strengths and weaknesses such as differences in regulations and culture. If carefully addressed and considered, such insights could improve the effectiveness of cooperation during crises.     

A System under Stress: The Icelandic Volcano Ash Crisis

This paper analyzes the response to the Icelandic volcano ash crisis of 2010. We examine how the original response was determined by the formal organization of the European air traffic control system, how the crisis was defined, what characterized the or new regulatory regime, and how one can explain the development and handling of the crisis. The theoretical basis is a combination of instrumental organization theory and crisis management theories. The crisis is handled via established organizational arrangements and principles that impose limits on the scope of action. The response to the crisis involved fine‐tuning in the form of an instrumental and incremental adaptation of policies, regulations and practices challenging core political values, which also exhibit elements of path dependency.     

Crisis vs. Controversy

Communication is a response that can mitigate and even restore the damage resulting from organizational crisis. Yet what is often asserted in most of the research is that organizations are in a state of crisis and that they are indeed engaging in crisis communication. Sometimes organizations are in controversy as opposed to crisis. The distinction between controversy and crisis, in turn, has implications for the practice of communication. The current paper takes the opportunity to show the fruitful directions to be taken up based on the differences between crisis and controversy and how these differences impact organizational communication.     

Community Crises: An Exploratory Comparison of the Characteristics and Consequences of Disasters and Riots

Some social science literature conceptualizes disasters and riots together, treating the two phenomena as involving but one relatively homogeneous type of social crisis. This is only valid if the pre-, trans and post-impact behaviours in such consensus and conflict occasions are roughly the same. This assumption is examined by comparing the similarities and differences between what occurs in community disasters and riots as these have been reported in empirical studies, looking at behaviours appearing at the individual, organizational and community levels. Significant differences have been found supporting the notion that consensus-type crises such as disasters ought to be conceptualized as a different social category than riots.     

The Limits to Safety? Culture,Politics, Learning and Man–Made Disasters

Three interrelated questions are posed. First, what is the significance of culture for theories of institutional resilience and vulnerability? Second, what are the cultural possibilities for organizational safety and learning? Third, can a theory of institutional vulnerability to disaster and crisis be translated into one of practical resilience? The paper explores these issues with reference to Barry Turner’s seminal Man-Made Disasters model of system vulnerability together with more recent extensions and critiques. Attempts to move from this framework to a theoretical characterization of the ‘safe’ organization are outlined, as is parallel research on high reliability organizations. Critique of this work in the debate over the limits to safety in complex organizations has focused in particular upon the political processes which corrupt possibilities for organizational learning. It is argued that such political problems, and in particular that of blame in organizations, ultimately require political solutions. Examples are given of solutions in aviation monitoring systems.     

The dynamic role of social media during Hurricane #Sandy: An introduction of the STREMII model to weather the storm of the crisis lifecycle

Social media has introduced a key ingredient, and a potentially unfamiliar variable, into the practice of crisis communication. In this paper, the authors critically assess the social media milestones related to Hurricane Sandy according to situational crisis communication theory (SCCT) (Coombs, 2007). Further, we discuss the crisis lifecycle of Hurricane Sandy with regard to the potential implementation of the STREMII model of social media crisis management, a proposed model originated through this research application. This original model develops from lessons and best practices discovered in historical and contemporary cases of social media crises and crisis management. The researchers acknowledge potential limitations and describe steps for further development of the model through research, all the while recognizing the powerful and paradoxical role of social media in the crisis management process. In reflection of Hurricane Sandy, further qualitative and quantitative examinations of crisis events are encouraged to evaluate the STREMII model continually in the dynamic social media climate and across the vast facets of crisis communication.     

Developing Innovation Capabilities: A Longitudinal Study of a Project at Volvo Cars

Many large firms are struggling to alter and develop their organizational capabilities. There are several discussions in the literature on what these capabilities comprise, and that there is a need to develop them. However, less attention has been paid to how companies can develop these capabilities in practice. The purpose of this paper is to contribute to organizational capability theory by providing insights derived from an empirical study of how organizational capabilities for innovation are developed in large firms, and how these findings compare to the theory. The paper is based on a longitudinal study of Volvo Cars conducted as a long‐term collaborative research project. The authors were involved in a project called Vision 2020, which extended over a period of two and a half years, the findings from which highlight several activities that enabled the changes required for the development of organizational capabilities. The need to develop ‘management capability’ in terms of both cognition and the propensity to act is especially highlighted.     

What Factors Drive Organizational Learning From Crisis? Insights From the Dutch Food Safety Services’ Response to Four Veterinary Crises

Although organizational learning has been studied extensively, empirical studies in relation to crises and theory building have remained scarce. This study explored what factors affect the learning process from crises of a public sector organization. We studied the responses of the Dutch food safety services (NVWA) to the veterinary crises classical swine fever (1997–1998), foot‐and‐mouth disease (2001), avian influenza (2003) and Q fever (2007–2010). Data from in‐depth interviews with key experts in the organization and from crisis management documents pointed to political–economic context, social–emotional understanding, organizational structure, organizational culture, crisis management stage and organizational forgetting as key factors. Remarkably, postcrisis evaluation reports, leadership and a shared sense‐making of what lessons to learn were not found to play a central role.     

Explaining the Emergence of Different European Union Crisis and Emergency Management Structures

Two European Union (EU) tools were adopted to enhance cooperation among Member States in the case of crises and emergencies (natural, industrial or man‐made) occurring both inside and outside the EU borders: first, the EU has developed a new tool in the field of civil protection that has been managed by the Directorate General Environment of the European Commission under the label of the Community Civil Protection Mechanism since 2001. Second, the Emergency and Crisis Coordination Arrangements (CCA), under the responsibility of the European Council, have been developed since 2005. Using a sociological neo‐institutionalist approach based on the concept of ‘divergent isomorphism’, the paper explains who and what the sources of EU integration process were leading to the coexistence of these two structures. Two case studies are presented using process tracing to demonstrate that two different pre‐existing organizational models were copied to create the EU structures of crisis and emergency management: that of the Community Marine pollution framework for the Community Civil Protection Mechanism and that of NATO for the CCA.     

Towards a Theoretical Understanding of the Recurrence of Crises Embracing the Issue of Organizational Learning: An Illustration with the Case of Two Hostile Takeover Bids Faced by Société Générale (1988, 1999)

In this article, we try to better understand the relationship between learning and crisis through the analysis of recurrent crises. Our study focused on two successive and similar crises experienced by the same organization, namely two hostile takeover bids a French bank (Société Générale) had to cope with in 1988 and 1999. From a literature review within the fields of organizational learning and management crisis, we proposed an analytical grid making it possible to get a better understanding of crisis‐induced lesson‐drawing processes. We then used that grid to analyse and compare the learning processes implemented during the two crises under study. This comparison leads us to suggest that lack of organizational learning is one factor that accounts for crisis recurrence. Conversely, proactive crisis management behaviour – resulting from double‐loop learning – seems to be the most fruitful behaviour to adopt in order to prevent a recurrent crisis and produce long‐term effects in the organization.     

What were we thinking? A scoping review of crisis management pandemic literature (1984–2019)

Pandemics are now the focus of research attention in the fields of preparedness and crisis management. As pandemics are some of the largest crises to occur, an important question becomes ‘what were the field of crisis management thinking about pandemic management’. This paper investigates how the field of crisis management have incorporated the body of knowledge arising from pandemics into its science (from 1984 to 2019). We performed a scoping review of 4 journals on crisis management and what they have written about pandemics (230 papers). The findings are summarized in eight different categories. The main result is that the field of crisis management have shown sparse interest in pandemics. We attribute this to factors such as fragmentation of academic sciences when the problem-solving needs integration, perceived incommensurability and the organization of attention. We argue that the coronavirus disease 2019 pandemic can provide a basis for posing new questions in research on, and the political debate around, societal vulnerability at large and not only restricted to recent experiences of particular crises. Finally, we argue that this will need a stronger integration of research strands and communities, which in turn require the ability to ‘connect the dots’ between different sources of knowledge.     

Creative Management: A Predicted Development from Research into Creativity and Management

A proposal is made for the establishment of a conceptual domain of Creative Management by fusion of two related bodies of knowledge, that of management studies and creativity. Through an examination of examples from around the world, we show how Creative Management is appearing in embryonic form as a global possibility, emerging from and enriching the predominantly American contributions of earlier stages. We suggest that such a development will take management studies forward from its historical trajectory, through the global convergence of organizational theories and practices. The proposed synthesis of creativity and management indicates the possibilities of a new stage in management incorporating humanistic, socio‐technical and knowledge management components. Collectively, the conceptual shift is towards what we have labelled Toyotaoism, in acknowledgement of practices and theorizing developed from the integration of Western and Eastern belief systems and theories in action.     

The impact of cognitive machines on complex decisions and organizational change

Humans and organizations have limitations of computational capacity and information management. Such constraints are synonymous with bounded rationality. Therefore, in order to extend the human and organizational boundaries to more advanced models of cognition, this research proposes concepts of cognitive machines in organizations. From a micro point of view, what makes this research distinct is that, beyond people, it includes in the list of participants of the organization the cognitive machines. From a macro point of view, this paper relies on the premise that cognitive machines can improve the cognitive abilities of the organization. From such perspectives, it presents rationale and principles of a class of cognitive machines with capabilities to carry out complex cognitive tasks in organizations. It also introduces analyses of the cognitive machines in organizations through theories of bounded rationality, economic decision-making, and conflict resolution. The analyses indicate that these machines can solve or reduce intra-individual and group dysfunctional conflicts which arise from decision-making processes in the organization, and thus they can improve the degree of organizational cognition. From all these backgrounds, this research outlines implications of cognitive machines for organizations.     

The role of IT in crisis response: Lessons from the SARS and Asian Tsunami disasters

Research on crisis management recognizes the important role of information although few studies of crisis response deal explicitly with information systems. In this paper, we present a case study of Singapore’s response to the SARS and Asian Tsunami disasters. Using the resource-based view of the firm as our theoretical lens, we examine three research questions: what IS resources are needed in crisis response, how are these IS resources bundled with other non-IS resources, and how are they effectively coordinated? Our analysis of the case suggests that existing assets such as information technology infrastructure, leadership, and collaborative networks and existing capabilities such as the ability to build and apply IT, the ability to recognize signals and the ability to see the big picture are critical during crisis response. The actions taken using these assets and capabilities include informing resolutely, gaining stakeholder commitment and agile mobilizing of people and IT. Our analysis further suggests that coordination mechanisms, namely the crisis response organizational, informational, and IT structures, are important facilitators of the response actions. The resulting framework of resource deployment during crisis response extends the resource based view of the firm into a cooperative setting, aiming to understand the nature of IS resource value in a cooperative context, and considers not just the resources per se, but the means of coordination the resources.     

Identity in Flexible Organizations: Experiences in Dutch Organizations

In the information economy, flexible organizations have evolved. Work and labour relations have become more flexible than in industrial organizations. This has consequences for the identity of organizations. Organizations tend to become opportunity coalitions when the identity is too fragmented or neglected. The key questions this article adresses is what is identity in a flexible organization and to what extent is it possible to ‘manage’ the construction of identity in flexible organizations? This key question was split up into three sub‐questions. We were interested in how (1) organizations organize their talent management, (2) how organizations manage their labour relations and (3) how organizations manage identity. These three subjects come forward in recent publications in the field of organizational development and HRM as being critical of management of a flexible and innovative organization. In the article, the characteristics of flexible organizations are defined. These characteristics are translated into the relationship between these organization and individual: the way flexible organizations manage their work, labour relations and identity is studied in 20 Dutch organizations. Striving for an optimum in flexible work and flexible labour relations, combined with managing a specific organizational identity seems to be the HR‐strategy Dutch organizations implement to reach flexibility and innovation.     

Crisis management using MAS-based wireless sensor networks

Wireless communication is increasingly used to manage large-scale crises (e.g., natural disasters or a large-scale city fire). Communication has traditionally been based on cellular networks. However, real-life experience has proven that the base stations of these networks may collapse or become unreachable during a crisis. An incident commander must also know as much information as possible about the occurring events to control them quickly and efficiently. This paper thus proposes a crisis management approach that overcomes the problems encountered by the base stations and insures relevant, rich and real-time information about events. This approach is based on wireless sensor networks, which are distributed in nature with no need for infrastructure and could be deployed in dangerous and inaccessible zones to gather information. Our proposal uses a multi-agent system as a software layer. The multi-agent system aims to improve the wireless sensor network performance by allowing cooperation between sensor nodes, offering better lifetime management and virtualizing the application layer. This virtualization supports several required applications simultaneously, including event monitoring and object tracking. Through successive simulations, we prove the importance of our approach in crisis management using several criteria to estimate the position’s error in object tracking, end-to-end delay and wireless sensor network lifetime management.     

Pathways to Institutional Equilibrium after a Campus Disaster

This study applies theories of evolutionary organizational change to disaster‐stricken higher education institutions. A collective case study was used to explore two institutions’ pathways back to operational equilibrium following environmental disasters. The key finding is the identification of seven variables that collectively influenced the institutional pathway to equilibrium. These variables can either shorten or lengthen the achievement of recovery goals that lead to operational equilibrium. The conclusion developed from these findings is that institutional equilibrium is largely dependent on external factors and can be regained while an institution is yet in recovery mode. Findings from this study contribute to the theoretical foundations of organizational development and crisis management, as well as the practice of crisis management in higher education.     

Crisis Politics in Authoritarian Regimes: How Crises Catalyse Changes under the State–Society Interactive Framework

Most studies and research on crisis management and government crises focus on nations that are advanced and democratic. Through the institutionalized mechanism of voting, the public can respond to a government's handling of a crisis without destabilizing the democratic system of government. However, the consequences of crises, particularly governance crises, in authoritarian regimes have not been adequately addressed. Drawing upon different frameworks in the field, this paper proposes a heuristic crisis development ladder and a state–society interactive framework more relevant for studying crisis management in authoritarian nations such as China. By focusing on the catalytic effect of crisis that accelerates reforms and changes, this paper argues that critical crises are politically powerful and decisive in authoritarian systems, especially in the context of an increasingly proactive civil society. This paper illustrates the crisis provoking politics that influences decision‐making under non‐democratic rule.