Organizational Crises: How to Detect, intervene, and Prevent

Crises occur in a group or organization in many forms such as natural disasters, fatal accidents, workplace violence, financial turmoil, and so forth.  A crisis is “a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly” (Lussier & Achua, 2010, p. 456). An organization’s long-term sustainability and success depend on its effective leadership to managing and overcoming crisis.   It is crucial for the leadership team to be prepared to respond to and deal with crisis in an organization.

The Crisis Lifecycle Model

A crisis lifecycle model is a useful tool to help leaders prepare for crisis, manage crisis, and take actions for organizational change after crisis.  According to Prewitt, Weil, and McClure (2011), crisis “has its genesis in the values, beliefs, culture, or behavior of an organization which become incongruent with the milieu in which the organization operates” (p.60), therefore organizational leaders and managers may be able to sense the subtle signs of forthcoming crisis and prepare to cope with the emergency brought up by unpredictable incidents.  A generic crisis lifecycle model defines the process of crisis in three phases: the preparation phase, the emergency phase, and the adaptive phase.  An organization stays in the preparation phase prior to any crisis.  During the preparation phase, leaders should be “cognizant of tremors or signals of misplaced values and behaviors” (Prewitt, Weil, & McClure, 2011, p. 62).

Preparing for Crisis Leadership

Crisis is “a critical time or climate for an organization in which the outcome to a decision has extreme consequences” (Aamodt, 2010, p. 606).  As noted in Shin (2011), conflict and crisis challenge leaders to make contingent and transforming reactions in high-risk situations, hence leaders need to prepare themselves for “effective decision-making and problem-solving skills, as well as the ability to engage in ethical decision-making” (p. 172).  Leaders should engage in crisis training for prevention and preparation with focus on stress management, conflict resolution, and team building (Gómez-Mejía, Balkin, & Cardy, 2012, p. 273).  According to Pynes (2009), crisis prevention and preparation demand leaders’ capability and readiness to deal with new, uncertain, and rapidly changing conditions on the job, thus leaders need to master the adaptive job performance which includes eight dimensions as “(1) handling emergencies or crisis situations, (2) handling work stress, (3) solving problems creatively, (4) dealing with uncertain and unpredictable work situations, (5) learning work tasks, technologies, and procedures, (6) demonstrating interpersonal adaptability, (7) demonstrating cultural adaptability, and (8) demonstrating physically oriented adaptability” (Pynes, 2009, p. 205).

Messick and Kramer (2005) suggest leaders enhance their organizations’ strategic capacity which is “the ability of an organization to fashion a novel solution to an emerging crisis” (p. 6).  Leaders should add to strategic capacity to the extent that they enhance the motivation, relevant skills, and the heuristic problem-solving capabilities of their members.  When the organizational structure fosters strategic capacity, leaders can prepare the organization for crisis by recognizing, prioritizing, and mobilizing awareness for change. To develop strategic capacity, leaders need to understand and focus on the core objectives of the organization.

References

Aamodt, M. G. (2010). Industrial/organizational psychology: An applied approach (6th ed.).  Belmont, CA: Wadsworth.

Gómez-Mejía, L. R., Balkin, D. B., & Cardy, R. L. (2012). Managing human resources (7th ed.). Upper Saddle River, NJ: Pearson.

Lussier, R. N. & Achua, C. F. (2010). Leadership: Theory, application, and skill development (4th ed.). Mason, OH: Cengage Learning.

Messick, D. M. & Kramer, R. M. (2005). The psychology of leadership: New perspectives and research. Mahwah, NJ: Lawrence Erlbaum Associates.

Prewitt, J. E., Weil, R., & McClure, A. Q. (2011). Crisis leadership: An organizational opportunity. Australian Journal of Business & Management Research, 1(6), 60-74.

Pynes, J. E.  (2009). Human resources management for public and nonprofit organizations: A strategic approach (3rd ed.). Hoboken, NJ: John Wiley & Sons.

Shin, J., Heath, R. L., & Lee, J. (2011). A Contingency explanation of public relations practitioner leadership styles: Situation and culture. Journal of Public Relations Research, 23(2), 167-190. doi:10.1080/1062726X.2010.505121