Exploring Leadership, Occurrence of Crisis - Coursework Example

Name: Tutor: Title: Exploring Leadership Course: Date: Table of Contents Table of Contents 2 Executive summary 3 Introduction and occurrence of crisis 4 Contingency planning 5 Recommendations 11 Conclusion 13 Bibliography 15 Executive summary Crises are perceived as either dilemmas or opportunities. Since careful management of events throughout the crises serve as opportunities for learning and developing organization, crises act as the threshold on which actions are taken. This implies that organizations are expected to first recognize the proximity of each crisis and its likelihoods, take the necessary steps in order to react or act in response to a given crisis and analyze all the decisions as well as mistakes made and learn from them. Management after crisis involves business recovery and continuing, market maintenance, operational improvement and resuming the businesses and stock worthiness maintenance. For every consequence caused by crisis, it is always important for the management of an organization to move quickly to resume the business. During the Arab Spring, Buro Happold lost a lot of contracts probably due to ineffective contingency planning and irresponsible crisis management. Derived from the contracting viewpoint, such contractual losses could be prevented. Buro Happold Company faced a crisis where contracts on its projects were all cancelled due to a shortfall of investment caused by the political unrest and economic instability of Arab Spring. The study opens up with a discussion on the introduction and occurrence of crisis in organization. The role of crisis management is discussed with a focus on Buro Happold as the case study where a lot of contracts were lost probably due to ineffective contingency planning and irresponsible crisis management. Some academic thinking on contingency planning is analyzed, providing its pros and cons and where it fits in with leadership in the organization with suggestive best practices as reference or source of transfer of concepts to more practical realities Buro Happold. Recommendations are made for Buro Happold Company to implement to ensure business continuity even in its future project operation. Introduction and occurrence of crisis Major crisis cause a negative impact on the organization by damaging its reputation which in turn affect its financial performance. Crisis occurs as high intensity nodes within the ongoing streams of the social interaction and not as discrete events. Therefore, strategic measures for crisis management need to be put place to reshape organizations with significant implications to re-structure and design as the progressive proactive crisis avoidance against the reactive approach to crisis response. Some of the positive features associated with crisis include the ability to strengthen a sense of empathy, cooperation and integrity, accelerating the change and transformation making, preventing the organization from larger crisis based on the system notification, developing strategies, new as well as innovative decisions. Organizational leaders trained in disaster management are required to integrate problem and the crisis management into their strategic planning (Jaques 2008). During the Arab Spring, Buro Happold lost a lot of contracts probably due to ineffective contingency planning and irresponsible crisis management. Based on the contracting viewpoint, such contractual losses could be prevented. It can be argued in relation to the neo-classical theory which suggests that general balance of the supply and demand can be maintained through the interaction of interest and profit rates. A case for Buro Happold Company where contracts on its projects were cancelled due to a shortfall of investment caused by the political unrest and economic instability of Arab Spring. This led to a reduced rate of interest that stimulates a renewed investment of the projects undertaken by Buro Happold. The occurrence of crisis indicates that the concerned organization has failed to control the problem, identify the concerns of stakeholders as well as change the attitude of stakeholders towards them. It can be argued that when the Arab crisis occurred, people or clients formed their own views about Buro Happold Company. Therefore, at this point in time the company should go through activities or make contingency plans to clear itself of the negative perceptions formed within the minds of clients or stakeholders to effectively the present and future crisis. It is quite clear that before the Arab crisis, Buro Happold had not put in place contingency plans or it was practicing faulty crisis management, otherwise it would not have lost a lot of contracts since the losses could be avoided (Barton 2001). Contingency planning Contingency planning are not necessarily developed to prevent crises, but instead as reactive measures triggered by certain events. Such plans lessen most of the negative impacts caused by crisis to enable business processes or situations back into normal operation more quickly. Current thinking provides argument that contingency planning should be considered as an active part of the overall strategic planning process of the organization. This ultimately helps the organization to better prepare for their future disasters as well as crisis occurrence. Generally, a contingency plan comprise of the three main components, the incident response, disaster recovery as well as business continuity. Buro Happold would be expected to have up-to-date business continuity management systems to aid in the day to day functions of its business. With a business continuity management system put in place, Buro Happold would ensure that its businesses are safely handled, and thus reducing the impact caused by major incidents such as the case of Arab spring that led to business disruption. Group-wide implementation of the business continuity process is beneficial. This is because it is considered a requirement for the management and staff to assess their current processes as well as documentations that can help in the identification of shortfalls within the organization. For any plans developed as part of the robust operation of the process should not be perceived as substitute tool for individuals dealing with crisis (Patton 2002). Today, most of the contingency planners argue that contingency planning should be viewed as a value-added component that puts organizations at competitive advantage within their marketplaces and as a means through which money is saved. This implies that processes that are entirely analyzed based on the principles of continuity often become more secure, and thus new modes of working are developed to streamline operations (Rothstein, 2003). Buro Happold Company could have included continuity strategies within its strategic plan. Management after crisis involves business recovery and continuing, market maintenance, operational improvement and resuming the businesses. As a result, continuity strategies would be reviewed periodically and become updated with the political and economic changes when its strategies change as well. This could have contributed more to business continuity of the company rather than the lots of contracts that were cancelled due to Arab crisis. This indicates that business continuity strategies are considered as a part of the corporate culture and the management thinking (Stagl, 2003). Effective contingency planning system consist of policies, checklists, plans, procedures, guidelines as well as other documents and resources which makes the components of a contingency planning such as the crisis management, business resumption, first response and command structure more significant. Scenario futuring or planning is a useful tool that can be applied in business management because it incorporates more strategic thinking and multiple perspectives to develop storylines of the potential futures. Neilson and Stouffer (2005) argue that use of scenarios within the planning process is an appropriate strategy to cope with various uncertainties in the contemporary globalizing environment. Scenarios are necessary when discussing hypothetical situations to enable planners determine how a given incident can impact the organization based on the available factors in play. Therefore, scenario futuring is important in organizations, particularly Federal and state as well as local governments. It is quite clear that Buro Happold Company did not implement scenario planning, and thus its critical supplies and resources turned out to be scare at the time when needed most (Neilson and Stouffer 2005). Some of the pros of contingency planning include, it is the best way to prepare and take appropriate actions when events that are not planned for in the normal planning process occur. Such plans position managers well to make practicable decisions. Furthermore, contingency planning is more significant in the elimination of fumbling as well as time delays within the emergence situations, and thus enabling more rational response. Through contingency planning organizations are controlled from loosing track further than the long-term plans given the short-term crisis. It is important to argue that contingency plans should be developed by paying more attention to the missions and visions of the organization. The most appropriate way to implement contingency planning is through a business continuity plan that highlights some of the actions and organization must consider while found in most extreme circumstances. In such extreme cases, organizations are required to make the necessary preparations on how to restore operations at a given off-site location. This provides the view that a Business continuity plan renders a clear definition of the critical functions that must be accomplished in order to restore operations as well as how the functions can be executed (Whitman & Mattord 2009). A few of the cons associated with contingency planning is that it requires managers to focus on pessimistic possibilities. This may arouse negative and more skeptical attitudes. Some of the contingency plans when revealed can generate more fears within the organization. For instance, contingence plans associated with employment termination or send off in situations of drastic fall in organizational sales, the need to handle labor strike within the organization can create moral problems among the employees. Organizations are required to identify potential risks as well as control them through mitigation measures or implementing contingency plans and procedures on realization of risks. Buro Happold Company was required to example every aspect of its business to ensure that a contingency plan is created for disaster. This implies that organizations need to protect their businesses at all costs through careful implementation of the contingency plan. As a result, organizations are required to survive any crisis which may come their way. Contingency plans if shared with individuals directly involved in a recovery process, creates four main problems. The plan is not evaluated realistically on a regular basis, it does not portray the severity of the real impact caused by a disaster, people involved decides not review the plan to avoid thinking about the potential devastations their company may face and updates or modifications are not made on the plan to show changes within the environment or identify the plan’s weaknesses through testing. For contingency plan to be effective, it is important to note that all the concerned people must be supportive of steps taken as well as be conversant with the system used in the organization. Contingency planning through management is a crucial requirement for successful averting of financial crisis. Buro Happold should continuously implement contingency planning as it is beneficial in providing earlier response enhanced by management given the availability of the necessary information, adequate dimension as well as basis for decision-making (Coombs 2006). For every contingency plan, there must be a communication plan through which to speak to stakeholders. This enables the planners to make decisions on who should be informed about a given a crisis both internally and externally. For example, successful internal communication boosts the morale for employees creating a damper on the high rumors that go hand-in-hand with any serious crisis. On the other hand, effective external communication stops rumors and the speculation made to allow the public realize that management is well-informed of the problem, takes note of its impacts seriously and working hard toward solving it. Long-term relationships are not necessarily governed by the long-run contracts, suggesting that Buro Happold can find re-negotiation less costly. For Buro Happold, a long-term contract is appropriate for strategic reasons. Based on the re-contracting situation within the middle-east, Buro Happold should find it necessary to partner with a company that it has already offered its services. Although this may result in more expensive and complex contracts, less costs will be incurred by both companies in adapting the contract incase there will be the need to address the modes of interactions (Coombs 2007). Successful implementation of the contingency planning can also be achieved by fostering systematic organization learning. However, it is important to re-design the organization so as to create more opportunities for organizational learning. The management of Buro Happold would have developed systems to enable it carry out some formal reviews with the objective of learning from its own issues as well as crisis and those of others. However, it is important to note that when reviewing crises within other organizations nothing is solved if managers inappropriately conclude that such a crisis can not occur and incase it happens the organization is well-prepared to handle the incident (Jaques 2008). It is crucial to note that effective organizational learning can not be easily achieved unless the crisis review is more objective and formal. The crisis review also has to be accepted as a legitimate way of learning. Through organizational learning, Buro Happold would establish benchmarks for crisis management systems against its peer organizations and industries. As a result, the organization would implement good practices for the processes involved in the identification and management of issues prior to them turning out into crisis. Arguably, prevention of the crisis happening at glance is undoubtedly the most effective way of crisis management. This is increasingly made possible by re-shaping the crisis management. Organizational learning can be placed at post-crisis stage since it is considered as the on-going process (Wooten et.al. 2008). Whereas organizational learning is incorporate throughout management stages of a crisis, it is preponderant within the final act. This is the best stage to recall all the events as well as analyze the most important learning points. Buro Happold would take organizational learning as the ideal model to enable the company under every step taken at the time of crisis occurrence. Such insights are significant because the Buro Happold could be in a position to improve its systems and processes for business continuity and establish new markets or clients for its projects. Cash break-even analysis is another best practice that has an advantage of fostering the continuing ability of Buro Happold to generate cash inflows particularly during financial crises. Proper identification of stakeholders as well as their perspectives is yet another approach Buro Happold would have used prior to the occurrence of Arab crisis. Change management would be an important way to identify all the prospective stakeholders to avoid relying on those that the organization opted to deal with. This could not have led to the total cancellation of Buro Happold’s contracts that made its businesses to languish due to political unrest and economic instability caused by Arab Spring. It is apparent that the company used to present its projects a virtual organization where a number of influential community leaders with opinions ignored, and instead decided to focus on courting the local politicians as well as business leaders that limited its market (Wiebner 1995). Recommendations In order for Buro Happold to become more resilient in managing its future crisis, the importance of communication should be the key area of focus that the company should incorporate into its global leadership thinking. Buro Happold should manage factors that cause communication breakdown, for instance, the company will be required to manage cultural differences as well as interpersonal relationships since it comprises of geographically dispersed teams. This can be best achieved by Buro Happold allowing its employees to visit other countries to be acquainted with the culture and workplaces of other environments. This will help the company to recover from the disaster of project closure and loss of major clients, and thus establishing new markets for its business continuity. Contingency planning through management is a crucial requirement for successful averting of financial crisis. Buro Happold should continuously implement contingency planning as it is beneficial in providing earlier response enhanced by management given the availability of the necessary information, adequate dimension as well as basis for decision-making (Pearson & Clair 1998). Buro Happold should enhance and implement its communication planning as a pre-requisite for successful completion of their projects across the globe. Since the company deals with more simultaneous projects handled by various project teams dispersed worldwide, a well-planned communication plan will enable the company to determine the kind of information as well as communication needs its project stakeholders. This implies that Buro Happold will be well-informed on its stakeholders’ needs, and thus being able to avoid losing its clients due to contract cancellation. It is also important for Buro Happold to practice a leadership approach that is more collaborative in transforming the manner in which the company should operate. Collaborative leadership approach has effectively worked for Arups where effective communication proved to be important in the management of their international teams as well as the day to day operation of the Arup employees. Therefore, Buro Happold should learn more by adopting the best working practices that have made Arups to be successfully transformed into a collaborative culture of global nature. This will foster more effective collaborations that are encouraged through connective thinking among the stakeholders of Buro Happold and across the globe (Coombs & Holladay 1996). Development and use of effective networks has been considered as an important way through which leaders can successfully deal with dynamic as well as uncertain nature and complexities in the world. Buro Happold should utilize the power of effective business networks when faced with uncertainties or dealing with various crises such as the Arab spring where they are faced with the challenge of establishing more business contracts for their business continuity. Buro Happold may require embarking on the formation of more long-term contracts to enable the company become sustainable with its future business operations. Therefore, development of more strong global networks both internally and externally may prove to be a great advantage. It enhances the diversity of knowledge that may be required by Buro Happold to explore and develop its business with the newly established markets. The company may need to assess the value of a network perspective in dealing with uncertainty. According to Koppenjan and Klijn (2004) examined that entangled in business networks is an important approach to linking the views and knowledge of employees to work collaboratively at the time of crisis and uncertainty occurrence. Therefore, it is relevant to argue that through developing a strong and collaborative leadership as well as the use of effective approaches to global networking Buro Happold should be well-positioned to acquire new markets as well as secure a stable environment for its future business whilst being equipped to effectively handle crises and uncertainty. Conclusion Based on the above discussion, it can be summed up that major crisis cause a negative impact on the organization by damaging its reputation which in turn affects its financial performance. A contingency plan comprise of the three main components, the incident response, disaster recovery as well as business continuity. Contingency planning through management is a crucial requirement for successful averting of financial crisis. For contingency plan to be effective, the concerned people must be supportive of steps taken as well as be conversant with the system used in the organization. Buro Happold should utilize the power of effective business networks when faced with uncertainties or dealing with various crises. Building and use of effective networks is an important way through which leaders can successfully deal with dynamic as well as uncertain nature and complexities in the world. Prevention of the crisis happening at glance is with no doubt the most effective way of crisis management. Effective organizational learning can not be easily achieved unless the crisis review is more objective and formal. Successful implementation of the contingency planning can be achieved by fostering systematic organization learning. Group-wide implementation of the business continuity process is beneficial. Contingency planning is more significant in the elimination of fumbling as well as time delays within the emergence situations, and thus enabling more rational response. Processes that are entirely analyzed based on the principles of continuity often become more secure, and thus new modes of working are developed to streamline operations. Bibliography Barton, L., 2001, Crisis in Organizations II, 2nd edn, College Divisions South-Western, Cincinnati. Coombs, W. T., 2007, Protecting organization reputations during a crisis: The development and application of situational crisis communication theory. Corporate Reputation Review, 10(3), 163-176. Coombs, W.T., 2006, The protective powers of crisis response strategies: Managing reputational assets during a crisis, Journal of Promotion Management, 12, 241–259. Coombs, W.T & Holladay, S.J., 1996, Communication and attributions in a crisis: An experimental study of crisis communication, Journal of Public Relations Research, 8, 279–295. 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