Organisational Crisis

Crisis can occur at any time in the life of any organization. A lack of planning, a mistake or ignored procedure, or simply chance can result in organizational crises (Bauman, 2011). Because of this inescapable truth, leaders have to be proactive in putting a plan of action or policies and procedures so as to minimize or avoid organizational crisis.

Due to the severity of the problem, scholars have developed crisis management models and recommendations to identify, prevent and prepare for crisis before they happened.

Probst & Raisch (2005), identify four key factors of success that lead to organizational crises. According to Probst & Raisch, these factors of success are: excessive growth, uncontrolled change, autocratic leadership and an excessive success culture (2005, p. 91). The authors argue that the abundance of success could have a counter- productive effect that can lead to organizational crisis. In essence, growth doesn’t sound to lead to a problem. However, if there is no a check and balance in the system, an organization can easily adrift to a crisis.

The characteristics for success factors are described as:- Excessive growth – expansion fueled through large number of acquisitions, high financial leverage due to intensive investment in growth areas, Uncontrolled change – endless reorganizations and loss of control due to overly aggressive diversification, deterioration of core business due to management focus on problems in new areas, loss of identity and orientation due to radical change of corporate business model. Autocratic leadership – autocratic position of CEO due to missing opposition and weak board control, over ambitious and perillious visions and goals, top down culture marked by blind faith in leaders and lack of skeptical questioning, Excessive success culture – culture of strong competition between employees, high degree of employee stress due to heavy work load and aggressive climate, poor communication due to mistrust and...