Dealing with Prejudice and Discrimination - Essay Example

Managing Organisations at times of crisis Student’s Name Subject Professor University/Institution Location Date Managing Organisations at times of crisis An organisational crisis has been defined as circumstances confronted by an organisation that it is unable to address using conventional routine procedures and thereby creates strain due to sudden change (Booth, 2015). The factors that lead to a crisis in an organisation can both be internal and external and management of the organization at such critical times determines the survival or extinction of the company. In the article; Two Routes to Resilience (Gilbert et al., 2012), it is pointed out by the authors that transformation of organisations is needed in response to factors such as disruptive start-ups, market shifts, and groundbreaking technologies. Such factors that necessitate the transformation of an organisation are deemed as crises and management plays an important role in the direction to be taken to cope with the prevailing situation for the company to remain competitive and profitable. According to Booth, different types of crises lead to different impacts and responses from an organisation. The ‘creeping crisis’ (Kouzmin and Jarman, 1992) is characterised by a gradual change that is only apparent to those that are intimately involved, and at times, even if they have an awareness of the looming danger, they may be unable to persuade the management of its existence. In this type of crisis, the top management will more likely than not continue applying the same principles despite the gradually developing crisis. Bureaucracy is the most likely cause of slow, wrong or no response to a crisis that has not yet materialized but is known to only the individuals concerned. Another type of crisis is the periodic threat or loss to part or whole of an organisation. The response to such may be prepared in contingency plans because as such, it is a routine crisis and can be prepared for in advance. In separate circumstances, however, an institution can lack authority over the nature concerning the periodical threat, furthermore, this opens up paths for other types of responses previously omitted in the contingency plan. The third and last type of crisis as explained by Booth is the completely unexpected threat that puts the whole organisation in imminent danger. This is the type most people recognise as a crisis, and in almost all cases, there is no contingency plan developed beforehand because of the improbability of the event (Booth, 2015). The response of the management to the third type of crisis determines the future of the organisation. Decisions made during such periods are the ones that make or break the company. The correct response may enable the company to hold on to the market share, increase or maintain profitability and venture into new markets. The wrong response, on the other hand, may lead to loss of market share, declines in profits or even revenue loss and loss of market leadership among other detrimental effects. An approach to managing organisations during times of crisis involves transforming the organisation using two entirely different efforts occurring together in parallel (Gilbert et al., 2012). These involve repositioning the principal revenue source and changing the contemporary business design to the changing marketplace and creating an alternative disruptive venture that develops innovations which tend to be the driver of growth for an organisation in the future. This strategy has been used before by existing organisations which were about to go out of business due to an altered marketplace that favours new entrants or a new technology that deems the existing ones obsolete. It may be argued, however, that such is an enormous task that is necessary for an incumbent organisation to take up because, without innovation, most companies die off. A new organisational process is needed for both transformations to work, according to Gilbert et al. (2012). In the new process, called “capabilities exchange,” the two parallel efforts share some select resources within the organisation without altering the mission or operations of either. It may be argued that this approach is quite useful for companies or organisations dealing with certain product lines that have lost market share to new ventures or products due to a disruptive change in the market. The alternative product or service offered while remaining true to the organisation's value and mission not only makes up for revenues lost due to disruption if and when successful but also provides an incubation period for the new innovative operation to grow. Using only the first transformational approach would lead to present market leadership but also risk the future of the organisation since the future belongs to those who innovate and create market disruptions. Companies that have failed to innovate in the past while responding to the threats they were facing at the time have slowly lost revenue and market share to those that have. Some have even been driven out of business by new and existing companies that continue to innovate. According to Gilbert et al. (2012), Apple Company repositioned itself in its struggling personal-computer business and focused on design while trimming offerings. At the same time, the R&D crew was busy working on innovations, the release of the iPod plus iTunes store leading to great growth of the company. IBM also took the dual-transformation approach and restructured its mainframe enterprise, moving away from restrictive systems to servers running software based on open standards. While at it, IBM also constituted Global Services organisation, a different entity which became the origin of IBM's later growth. The success of this approach shows clearly that to remain competitive in an ever-changing marketplace, innovation is crucial. However, innovation alone will not enable an organisation to remain competitive because it takes quite some time to realize a new service or product and even longer for them to generate the revenues to make the new venture profitable. The organisation also cannot rely only on innovation because it needs to maintain market leadership and generate revenue while doing so and hence repositioning itself is important to enable it to maintain market share. Finding the strongest competitive advantage for organisations existing business model helps sustain the organisation in a disrupted marketplace while at the same time bidding time for innovation. Targeted cost cutting enables a legacy organisation to find balance in a disrupted marketplace as seen in Xerox where the senior vice president saved billions through outsourcing jobs to Flextronics, shutting outmoded factories and winning concessions from unions. This led to a solid and successful ffteen billion dollar business in 4 yrs from a $19 billion dollar business with $273 million in net losses in the year 2000 (Gilbert et al., 2012). This implies that cutting targeted costs leads to finding equilibrium in a shaky marketplace and it requires the company to move away from the narrow focus of only preserving margins via reducing costs. The incumbent organisation, in times of crisis, must ask fundamental strategic questions for them to have an edge and also avoid destructive across the board reductions. Organisational leadership needs to embrace potentialities of the brand-new marketplace as enthusiastically as those who have disrupted it and address the market as start-ups through meeting the needs of customers. The premise of the second kind of transformation is, therefore, building a new separate business with its dedicated staff, processes that are distinct, singular culture and its profit formula. This leads to a new way of exploiting the disruption without the shackles of revenue requirements, core business practices and margins of the existing legacy organisation. (Gilbert et al., 2012). The view of having an entirely separate team leading the new venture and its separation from an existing organisations framework is supported by the fact that there are many barriers to innovation provided by both the middle management and other staff in an incumbent organisation. This is especially so for businesses that lack an entrepreneurial and innovative culture whose employees view new ventures or innovations as threats to their jobs and hence it meets resistance. Without an entrepreneurial culture, change encounters fierce resistance from the existing staff on almost all levels and hence the need for a separate entity to run the new innovative product (Booth, 2015). This model was put into practice by Barnes & Noble when it hired the e-commerce exec William Lynch to manage Barnes & Noble.com and start an initiative. The team conceived the Nook which took over a fairly large market share of e-readers and with an injection of $300 million from Microsoft; it seems like it is the future of Barnes & Noble. Capabilities exchange has been suggested as the structure that enables an existing company to scale up a new venture which may later become the source of growth for the organisation. Setting up a new venture in an existing company is hard in times of crisis but scaling up such an operation in harmony with the existing one, for them to share strengths, requires a structure. The structure is easy to set up and requires establishing leadership, identifying resources that can be shared by the couple of businesses, building exchange units, protecting boundaries and scaling up and protecting the new venture (Gilbert et al., 2012). As has already been stated, innovation, working hand in hand with repositioning of an organisation is a method that can be implemented to manage organisations at times of crisis. However, there are key issues to implementing corporate innovation that must be addressed before an organisation undertakes any form of innovation (Karutko et al., 2014). This presents the other way of addressing innovation through creating an entrepreneurial and innovative culture in the organisation. This can also be referred to as building for the future because today’s sustainable products are very likely to be obsolete tomorrow. The four key implementational issues for creating a successful corporate innovation strategy are; understanding the nature of innovation needed, coordination of managerial tasks, practical use of running checks and proper instruction and preparation of individuals. Kaurutko et al. (2014) argue that the effective recognition and response by top level officials in an organisation to the four issues may be the representative of the distinction between the organisations that build prosperous corporate innovation tactics and the ones that fail to do so. Building for the future is today’s goal for many companies, and that is why R&D teams of many major corporations work round the clock building innovations that will determine the organisation's future path. Such incentives as owning part of the new venture have been offered to managers and CEOs who are willing to head a new project/venture (Drucker, 2014). This serves to show that innovation is one of the fundamental issues that determines the profitability of the future organisation. And innovation, for it to work in corporate requires not only recognition but also the proper response to the aforementioned issues. Regarding the issue of understanding the type of innovation sought, it is imperative that leaders of organisations facing crisis and responding through innovation understand that not everyone comprehends the meaning of corporate innovation as used by leaders. An organisation that wants to re-identify itself through a product may use the product-line level managers innovation in association with the sales and marketing department leaders in introducing a product that serves the need of customers previously neglected. This sounds good in theory, but organisations have been unable to articulate the specific innovation sought by the company clearly. An organisation that has been successful and remains so to this day is Proctor & Gamble which has focused on a specific type of innovation, propelling the company’s innovation efforts to meeting over 50% of its revenue targets, up from 15% in the year 2000 (Karutko et al., 2014). Use of mechanisms that select, guide and terminate activities and actions may be the reason for successful corporate innovation. Individual training and preparation are also paramount for a successful corporate innovation because awareness and nurturing are essential for the sustenance and development of organisational entrepreneurial culture. This can be done via a training program developed for use in industries (Karutko et al., 2014). References Adams, R., Bessant, J. and Phelps, R., 2006. Innovation management measurement: A review. International Journal of Management Reviews, 8(1), pp.21-47. Afuah, A., 2003. Innovation management. New York: Oxford University Press. Berkes, F., Folke, C. and Colding, J., 2000. Linking social and ecological systems: management practices and social mechanisms for building resilience. Cambridge University Press. Booth, S.A., 2015. Crisis management strategy: Competition and change in modern enterprises. Routledge. Top of Form COLE, G. A. 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