Managing Organizations at Times of Crisis - Case Study Example

MANAGING ORGANIZATIONS AT TIMES OF CRISIS Student’s name Course Professor Institution’s name Date MANAGING ORGANIZATIONS AT TIMES OF CRISIS Introduction Leadership is important in the management of organizations and is essential for organizations in their attempts to meet the set objectives. Leadership is classified into two main types according to Cox (2001) and Arlene et al. (2014), they are transactional and transformational. Discussions of transformational leadership have been on the rise in recent times. Transformational leadership is a new leadership paradigm that has been gaining a lot of attention. Management and leadership always try to implement change as change is deemed a developmental or improvement aspect in organizations. Change is necessary for every organization whether minor or major. Even though change is a necessity, it always faces resistance and barriers that hinder its implementation. However, no matter the levels of resistance or barriers to change implementation is essential, as it is often an improvement factor (Beugelsdijk et al., 2002). All organizations face crises at certain times in their life cycles. It is, therefore, important that these organizations put in place measures and strategies to deal with the issues in times of crises (Weisbord, 1976). In order to maintain or even improve their competitive advantage, organizations employ several techniques. Transformational Leadership Transformational leadership is all about empowering a group of people that work together to achieve their goals by providing motivation for development, which leads to performance improvement beyond the required levels. “Transformational leaders have charismatic leadership behavior whereby they attempt to inspire their followers in return to faith and respect. They also have a clear sense of mission that they attempt to convey to their followers. It further evidenced that such leaders also tend to have superior debating skills, technical expertise and persuasive skills” (Bass et al., 1994). The theories that govern transformational leadership are founded on individualized considerations, simulation dependent on intellect, and inspirational motivation. With transformational leadership being an important leadership theory, it is essential that its advantages or benefits over the other leadership theories be considered. Transformational leadership is based on the development of an individual's personality and this is an advantage, as other leadership styles do not improve the personality of an individual. It entails encouraging and inspiring a group of people who in organizations are the employees to develop and work together in order to meet the objectives and vision of an organization. Shelton (2003) believes that transformational leadership is a scenario where a leader provides motivation to his or her followers to become leaders and an organization will be advantageous, as it will have employees with effective leadership qualities. The organization will benefit mainly concerning decision-making and problem solving especially through innovation. The employees are efficiently coached and mentored through transformational leadership and are able to deal with issues the organization might face. Transformational leadership is based on individual consideration where the leaders consider each person in the group as a whole individual as opposed to as an employee. The leaders base their considerations on the individual’s knowledge, experience, and skill and they exploit them to the maximum to allow the company or department of a company attain its set goals. The leaders use these individual’s characteristics through fair and equal workload distribution, individual mentoring and counseling regarding careers, praising high performing individuals personally, recognizing high performing individuals on the public front, listening and dealing with the individual concerns and needs of the people in the group. It is essential that each leader in the transformational leadership strategy base their management skills on each of the members that follow them (Gilber & Munroe, 2012). As a distinctive characteristic of transformational leadership, individual consideration goes a long way in ensuring effective leadership. Intellectual stimulation is another important characteristic of transformational leadership especially through aspects of personal values and objectives after careful self-reflection (Hacker & Tammy, 2004). Intellectual simulation enables leaders to identify problems regarding their followers and projects and develop their problem-solving abilities through ensuring that they make proper decisions. Some of the critical ways that transformational leadership develops their follower's intellectual simulation skills include promoting creativity and innovation, improving the follower's levels of sensitivity and knowledge concerning the environment, and ensuring that the ideas of the leaders are only put into consideration when the followers have failed to raise viable and effective ideas. Finally, they should encourage each member to give ideas regarding critical organizational issues even if the ideas are controversial or radical. Transformational leadership also entails idealized influence through qualities such as loyalty, trust, respect, and admiration from the group (Singh & Bhandarker, 1990). Important qualities of idealized influence transformational leaders apply include risk sharing with the employees, being optimistic and confident, creating a good example that the followers can follow, being ethically and morally upright, and appealing to the followers to achieve the vision and objectives of a project. It is essential to note that the followers often trust transformative leaders, which is not the case with the other types of leaders. The followers respect all the decisions made by their leader as they have confidence in him or her and the group is able to function effectively. In an interview with Terri Kelly who is the CEO of W.L. Gore & Associates she says that in managing tensions, “I try to bring them to the surface and make them explicit, so that they’re right in front of people all the time and that helps. It’s important to talk about them not as a choice, where one or the other is more important, but as a balance we must continually strive to achieve. I think it’s a mistake in organizations to oversimplify by conveying a sole focus on one end of the spectrum at the expense of the other” (Smith et al., 2016). Motivation and inspiration are the other essential characteristics of transformational leadership. These characteristics are inseparable as they go hand in hand in ensuring effective leadership. Through motivation and inspiration of their followers, transformative leadership allows the followers to achieve both individual and organizational goals. Some of the major aspects in relation to motivation and inspiration include having a clear view of what the future will present, economic and ideological vision sharing by the leaders and followers, and ensuring that each individual has a role in achieving the shared visions and objectives. Another important aspect is encouraging followers to conform to the culture of the organization. Transformational leaders are able to raise the levels of the followers to high levels that allow them to achieve the set goals and objectives. Some of the main methods of raising the followers' levels include encouraging teamwork, promoting optimism, providing motivational speeches, and ensuring that positive results are publicly highlighted. Barriers to Organizational Change Below is a discussion of some of the major barriers that leaders dealt with concerning change at Kodak. Kodak became bankrupt because it failed to go with the flow of innovation and change that the company was previously built on (Kotter International, 2012). The company failed to get into the digital technology at a fast enough rate that was required by the industry and market. The reason behind the company’s failure to embrace digital change can be attributed to factors such as poor planning, ineffective communication strategies, and employee resistance due to lack of involvement on the issue (Brodbeck, 2002).. Poor planning is a critical barrier to change since without proper systematic planning, change often leads to more problems as opposed to benefits in an organization. Managers at Kodak faced major planning issues especially when the employees fail to provide a clear plan to steer the process of change. The planning team failed to recognize the impact change could have on the organization and therefore they failed to concentrate on issues such as responsibilities of individuals to implement change, planning of the administrative structures, poor planning of the structures of work reporting, and ineffective allocation of job responsibilities (Kloppenborg et al., 2011). In their planning process, the team failed to consider the reason and feelings of the people. Poor planning is a major barrier that leaders often encounter while trying to implement organizational change, as change often starts at the planning stage. Ineffective communication strategies is another barrier to change (Miller, 2014). Failure to create an effective communication strategy resulted in poor implementation of organizational change at Kodak since the employees were not provided with clear information about the transformation into digital technology. Ineffective communication has been known to lead to rumors especially when implementing major organizational changes such as mergers and downsizing. Employees often need to understand what the organization aims at even if the news is negative. Ineffective communication, especially from management, often leads to a disruption of the employee performances due to uncertainty issues (Burnes, 1991). Apart from management to employee communication, communication between employees is also essential. Poor communication strategies between employees do not allow for harmonious relationships, as there will be no systematic functionality between departments. Ineffective communication therefore manifests itself as a major obstacle to change starting from management to the employees. Finally, employee resistance because of organizational complexities results to the ineffectiveness of the process of change (Cummings et al., 2009). Employees at Kodak resisted change because it affected them on a personal level. The process of change into digital technology disrupted the normalcy of the employees since they had a clear knowledge on their roles in the company and were comfortable with the running of the organization. Since the company was planning to venture into the digital technology, it needed new employees that were skilled technology and thus some of the employees needed to give way. Besides, the company also failed to involve its employees in the process and this enhanced their resistance towards the change. Organizations that have complex employee processes and systems are the ones that are often faced with the barrier of employee resistance because it is hard to change the complex systems (Smith, 2005). Improving Competitiveness for Organizations during Times of Crisis Effective crisis management goes through four phases including the preliminary stage, acute stage, chronic stage, and resolution stage. It is important for every organization to recognize a crisis before any action is taken. Organizations such as Barnes & Noble have faced crisis as its culture, values, and tradition were affected as the organization tried to change to online book selling as its main source of selling its products (John et al., 2012). Because the technological development at the company was old and outdated, shifting into online selling created a major problem. Crisis management therefore became an important part of organization in the attempt to solve the crisis. The crisis management for the case of Barnes & Noble can be analyzed through the stages mentioned above. When online sales of the company began to grow then that is the preliminary stage of the crisis management started. The acute stage of crisis management commenced when Amazon an online bookseller stated taking the forefront in online sales. Chronic stage of crisis management is when the company now needed to improve it management through employment of highly skilled employees who would improve innovation. The crisis resolution stage is when the company needed to focus all the negative energy and transformational leadership (John et al., 2012). Barnes & Noble dealt with this issue through innovation and integration of new technology and change in management. The company needed new skilled and knowledgeable employees to deal with the issue through propagation of high technology and high quality internet. The results of innovation done by the company was witnessed, as the company was able to grow the total online sales in the United States as Amazon promoted it. It is essential to note that the company’s online book sales grew at the time that the company was facing a crisis. Therefore, it can be summarized that innovation and change in management is an important aspect for organizations to improve their performances at times of crisis (In DuBrin, 2013). For a crisis to be averted it is essential that organization use the resistance levels to their advantage. Converting the energies used in resistance into positive energy can enable and organization function at higher levels than the normal. A crisis can be averted by organizations converting the negative energies into meaningful acts and functions (Griese, 2002). Another organization that encountered a crisis is Domino’s Pizza where there was video on YouTube of adulterated food by rogue employees. The crisis occurred in 2009 and since it was through YouTube news on the video spread everywhere. The company therefore needed a strategy to deal with the crisis. Effective crisis communication was the method used by the Domino’s Pizza to solve this crisis. The vice president of communications, Tim Mclntyre delivered an effective communication plan using both YouTube and twitter as a counter to the video. An effective crisis communication plan is essential in dealing with organizational crisis and therefore maintaining the competitive advantage (Pearson, 2007). AN advantage to Domino regarding the crisis is that it was not directly involved, as rogue employees uploaded the video. The situation further complicated the crisis since it is a rare occurrence. However, Domino dealt with the crisis properly by putting in place an effective communication strategy. The company however now tries to prevent such crisis from occurring again through loyalty from employees and the improvement of employee loyalty. When employees treat the organization as part of their family then they can still be able to perform at top levels since they would not consider it as only a source of money. Loyalty enables employees and managers to even perform performance reviews at such difficult time, which in turn allows an organization to maintain or even improve its competitive advantage (Johnson et al., 2008). Personal Reflection. For all students and professionals, it is critical to reflect on experiences and activities in order to improve future performances through improved communication skills, better decision-making, and better conflict resolution techniques. This topic on managing organizations during the crisis and the obstacles leaders face when implementing change has allowed me and other students to gain practical skills that will be applicable in future. I was able to develop problem-solving and decision-making skills from researching on different organizations and how they were able to sustain their levels of performances at times of crisis. Through research on the barriers to change, I was able to improve my knowledge as an aspiring future leader. I developed great problem-solving skills by studying what other leaders have done to go through the different barriers to change. In my research on the barriers leaders face in implementing change, I encountered some important authors that improved my understanding of management (Smith, 2011). A good example is, Burnes (2005) who provided an insight into the different complex theories of organizational change and the different ways to solve these complexities. The information from this author expanded my knowledge on administration and management in general. In addition, the study on transformational leadership and its distinctive characteristics expanded my knowledge on leadership and prepared me to being a better leader tomorrow. Conclusion In conclusion, there is an important relationship between transformational leadership and management of organizations at times of crisis (Arlene et al., 2014). When dealing with organizational crisis as seen with the examples of Barnes & Noble and Domino, it is critical to use transformational leadership by applying aspects such as innovation and management change and effective communication strategies. These companies were still able to compete even at times when they dealt with crises. Overall, crisis management should be in the plan of all organizations since a crisis can befall any organization at any time. References Arlene H., Catherine L., & Corinne M., 2014. Leadership in a time of financial crisis: what do we want from our leaders? 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