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Organizational Crisis
Definition:
An
organizational crisis a decisive moment in a company’s history when events might
force a company to reassess its position and when decisions may have to be made
about the company’s future. Upheavals
of major significance may be caused by internal events but usually these are
either directly or indirectly brought about by external events.
External
Categories
|
Ř
Technology |
New technology developments, which might give
competitors an edge and force a company to completely, rethink its strategy
leading to a radical restructuring. |
|
Ř
Economic |
An Economic downturn, which could affect a
company’s product markets or the
functioning of the labour market. |
|
Ř
Social legal |
Change in social norms, which could affect the
expectations and behaviour of people at work. Could occur slowly over time and only become obvious when event
force a major strike for changes in
work conditions or core personnel
begin to leave the company . |
|
Ř
Political |
Profound changes in
the law affecting people at work and their well-being such as hours of work, or minimum
wage or regular inspection of dangerous machinery. |
Internal
Uncertainty
Ř Life Cycle
Ř Organizational decline
Environmental
Uncertainty
Stable
Environmental complexity
Simple Complex
Adapting
Culture – 3 Conditions
1. Dissatisfaction with status quo
2. Visionary CEO
3. Kurt Lewin 3 stage process
i.
Unfreeze
ii.
Change
iii.
Refreeze
Response to External
Environment by
1. Change Organizational Structure centralized structure to decentralized
2. Change technology introduce
computerization
3. Focus on Products bring
out new products
Cause Change in
Internal factors
1. Hire New people – bring in new skills
2. Change the reward and performance appraisal system – new behaviour or
new skills, abilities or attitudes.
3. Job design-: Change the job to encourage new behaviour
4. Focus on People – Introduce empowerment principal and self directed
teams in a TQM environment.