MIKUSOVA, Marie
VSB-TU, Economic Faculty, Dep. of Management, Sokolska 33, Ostrava, Czech Republic marie.mikusova@vsb.cz
Abstract: In this paper I am covering some changes of the practice of crisis management and in connection with this I am covering the fundamental problems in the preparation of managers to handle crisis situations. In last decade our knowledge in the area of economic crisis improved, however, this knowledge is still very scattered and not unified. It is necessary to combine individual findings and on the basis of the knowledge collected in past to create a complex, in practice usable theoretical system, which would be a basis for quality preparation of future and also present managers.
The needs for new skills have arisen. Therefore, the significance of school education is growing, mainly at higher levels. As a consequence, it is necessary to keep in mind continuous improvement of knowledge so that managers' conducting capabilities would be kept at appropriate level. Either not to try one's own knowledge, or to upgrade proficiency, this is a missmanagement that may cause later unpredictable consequences.
Keywords: crise, education, management, practice
The problem of crises in this time is even more pressing if we realise that the economy is not the only region where the crises occur. From all the sides we are facing many societal, political, cultural and also ethical crises. As an example can serve our health care system, education, police, judicial system, the crisis in the perception of our own personality or the crisis of values.
Briefly said, we are living in a world, which is prone to crises and which is burdened by crises, we are living in a world, where the crises are omnipresent and where they spread everywhere. Each facet of the life of society is affected by destructive disruptions, upheavals and restructuring, which are the main characteristics of a crisis.
In practice, the goal of economic crisis management is to defend and shield the organisations from different fateful adverse events. Threats of the very existence of organisations come from many sources. They come primarily from the concerns about economical decline, struggle with competition, disputes between the employers and employees, technological risks or direct threat to the health or lives. These sources also indicate exposed areas, where the preparation and training of future managers should be focused on. As we will see in the following passage, the number of elements, which is necessary to focus on during the training in this area, is very large.
| Present practice of crisis management in Czech companies in general | Problematic areas of training a preparation of managers for resolving of crisis situations |
| reaction | prevention |
| measures after the crisis event | permanent ability to resolve a crisis |
| formal procedures | active preparation |
| the state before the crisis | challenge |
A crisis will mostly surprise a company, because the management of the company is very rarely prepared for it. The company reacts to the crisis event as to an unexpected situation, which solution in such tense periods and very often under great time pressure is thus even more complicated. In the attitude to the crisis management in most cases is then necessary to ensure a change from reactive to preventive approach.
The effort to actively forecast the occurrence of crises is then essential. Monitoring of strategic problems, which could in the future lead to a crisis, elaboration of crisis plans, training of crisis teams, implementation of early warning systems, preparation of all employees for extraordinary situations, all this should be a part of normal activities of the company.
The second associated relation in the practice of crisis management and the necessity to prepare for it is the change from taking of measures after the crisis event to the creation of continuous ability of the organisation to resolve the crisis situations.
Managers still regard a crisis as something, which can happen only to others. They exert minimal effort to create their own inventory of means and knowledge to handle the crises. If they acknowledge the possibility of a threat to them, for resolving of specific tasks they mostly appeal to external consultants (security experts, experts for disposal of environmental contamination, financial experts, experts for publishing of information etc.).
The goal of the company should be the creation of its own resources (technical, material, financial, human resources and the like) for the prevention and management of crises, which together with the cooperation of called expert consultants could resolve the crisis situation.
Many companies are convinced about their readiness for potential crises, if they have elaborated a crisis plan, the rules for the management of extraordinary situations, principles for maintenance of work safety during work, principles for the protection of environment, if they have determined formal responsibility during the time of a crisis etc. However, the creation of a system of formal procedures for the management of extraordinary situations is not a guarantee that the company will handle an actual crisis.
The approach based on formal procedures has to be complemented with an active preparation. The plans have to be put to life by training and practical tests. This practice includes the training of employees for readiness, creation and periodic exercises of interdisciplinary crisis teams, practising of behaviour in extraordinary situations, teaching of decentralised decision making, of self sufficiency and flexibility, continuing improvement of safety systems, of early warning systems etc.
As the last one is mentioned the trend - the present goal of crisis management in the form of returning of the company to the state before the crisis. Companies are striving to achieve their former market share, production program, terms of business.
The crises, however, bring with them also the opportunity for a total transformation of the company. The crises can become an impetus to a radical change in some area of activities of the company or in the operation of the company as a unit.
In connection with the mentioned trends, I regard as important to point out the secondary crisis problems, which are entirely ignored; they are the stresses or psychological traumas in the company and the associated social consequences.
From the above mentioned follows that a large range of knowledge and skills from different areas are indispensable for successful management of crisis situations.
For better illustration, the stated relations can be expressed in figure (Fig. 1).
Then I will deal with particular levels in greater detail so that such problem areas like the area aimed at increased intensification of education, mainly at the master (engineering) level, would become more appealing.
Figure l. Factors influencing the course of a crisis
The basis for a responsible preparation for the solution of any problem is an individual personal approach. That's why I am going to tackle the aspects that influence the attitude of a manager to the necessity of being ready for a crisis event most.
One of the strongest influences impacting an individual is his personality. [PAUCHANT & MITROFF 1988]. Sociologists have proved some most vital personality features are unconscious. In this consequence, managers are often not aware of some important influences impacting their activity [KETS de VRIES & MILLER 1985].
One of the most important ways such unconscious influences act is acting through basic own opinions considered to be reasonable and strict, created by a managaer in relation to himself, his customers, employees and surrounding environment [MASON & MITROFF 1981].
Then, a primary question is whether some managers are directly susceptible to crises due to their organizational culture, whether they don't create their own crises due to their culture character.
Providing we would like to follow differences between "healthy" and "not healthy" to crisis susceptible managers, we should consider the opinions formed by the managers in the following five principal fields identified as an organizational culture base [SCHEIN 1985]:
A relation to the respective surroundings
Does a manager understands his relation to the surroundings as a
relation meaning supremacy, subordination, harmony, searching for
proper positions or anything else?
A character of the truth and reality
Of what nature are regulations, methods, company behaviour in
defining what is true and what is not true?
A human nature character
What does it mean "to be a human being" and what human
properties are considered to be principal and indispensable? Is a
human nature bad, good or neutral?
A human activity character
Based on the above stated opinions, how would people behave in
relation to their surroundings, truth and fact, and human nature?
To be active, passive, committed to work or subjected to the fate?
A human relations character
What is deemed to be proper relations among people? It is a
relation of co-operation or competition, individualism or group, is
it based on natural authority, laws or charisma? (Taken from
[SCHEIN 1985], p. 86).
For this paper purposes I am going to divide the managers to two groups: "ready" (hereinafter just "R") - ready or preparing for potential crises, and "not ready" (hereinafter just "N") which are able or willing to deal with a crisis danger only at minimum. I note such dividing is much simplified.
Now, let's have a look how these two groups differ in their principal opinions and statements.
A relation to the respective surroundings
Managers should clarify their external environment definition and their relation to it. A R manager understands his surroundings in quite a wide content, trying to conceive also the position of surrounding entities, not undermining the importance of external entities for its activities. A customer is perceived friendly, not only as a means for its objective achieving, as it is in case of the N manager.
A character of the truth and reality
In order to protect their own idea of themselves, the N managers apply a great number of protective mechanisms. E.g. idealization is one of the most frequently used mechanisms, i.e. a feeling to be able to achieve everything, which is based on idealization of some people or whole company position, in addition, conscious denying of any crisis event occurence or refusal, i.e. recognization of a potential crisis occurence, however, diminishing its importance. Another defensive strategy can be intellectualism often used by non-profit organizations [PAUCHANT & MITROFF 1988].
A human nature character
The N managers have tendences to divide internal and external entities to "good", proving the own company perfectness feeling, and "bad", providing they do not confirm such a feeling [PAUCHANT & MITROFF 1988]. The R managers admit their potentials and real abilities.
A human activity character
The N managers often practise a fatalism strategy, by which they prevent themselves from a feeling of a blame. According to them, accidents and crises are accidental, caused by bad luck, a bad star. Such strategy is dangerous. In its consequences, it diminishes a feeling of the blame and being responsibility for company activities, justifying the measures absence.
A human relations character
The N managers prefer inter-human relations based mostly on individualism and rivality. The results are individuals advancement, however, not team development. The R managers utilize simultaneously competition and co-operation, individualism as well as teamwork.
Even though the nature of a great part of those attitudes is inborn, there is still a wide gap that must be bridge over by engineering level education.
The required education and preparation at this level is predominantly of psychological character and is focused on transforming an individual into a personality. The outcome of preparation is not very visible and that is why it is ignored to a considerable extent and thus not appreciated.
Note: A diagram of causes and consequences is used for graphical representation of relations. A consequence - willingness of a manager to accept preparation for a crisis event, awareness of its necessity, is influenced by causes - in our case by five above mentioned simplified factors (Figure 2).
Figure 2. A diagram of causes and consequences
As a manager anticipates a necessity of being prepared to face a potential crisis and can be ranked among managers of R group, then conditions for his preparation must be created.
The crucial prerequisite is a standpoint of the top management. Management at the highest level must not boycott, ignore or patiently tolerate anticrisis activities of managers at lower levels. It is him who should accept the existence of potencial crises and subsequently the necessity of being ready to cope with them.
A great emphasis must be laid on the role of the top management as it is just them who are finally responsible for the company. The quality of an organisation depends above all on professional skills, ability to communicate with people and managerial ethics of the top executives. But it is necessary to avoid some traps [DAIGNE l995]:
ability to achieve an unbias pose
the loss of contact with reality, a gradual isolation in the ivory tower (see defensive mechanisms)
not taking into account employees concerns and needs
the absence of an enterprise vision and mission
lack of skilful fellow-workers who would contribute to a manager's knowledge and share with him the same values.
These traps can be avoided by preferring a team work. Unfortunately, in an already afflicted organisation the top management will be hardly able to implement a principle of co-operation without the previous acceptance of potential crisis occurence and readiness for it. The complexity of the current management, however, requires from the top management qualities and knowledge that one individual can hardly possess.
At this psychological level, among professional skills the individual personality should possess, the ability to deal with people is considered as one of the most important aspects. Referring to this matter the attention should be paid to another quite neglected area which is managerial ethics. Even though it has been included in the programme of engineering study, its position in the whole spectrum of courses is a position of Cindarella.
Well, which areas should the preparation of a manager for crisis events include?
First of all, there are four types of a top manager's skilfulness we can talk about.
These four types create the basic circles to which the system of preparation and training should be focused. They are required during the "normal" working of the organisation. But in a crisis situation the skills are even more striking and that is why I think it is necessary to mention them.
The first skilfulness is the ability to perceive, observe and structure the surrounding events. A manager should use his imagination and ability to imbue others to follow his goals. Performance efficiency of a manager and his team depends on his ability to tackle the problems.
The second one includes the ability of communication. Targeted communication means a great support for the solution of even unexpected situations.
The third one rests in trust. Employees respect a manager who they can rely on. Truthfulness, opinion steadiness and credibility are important values which the manager is expected to possess.
The fourth one is leadership based on own professional knowledge as well as the support of employees knowledge. A manager who does not use professional skills of his subordinates but impedes enhancement of their professional knowledge makes a serious mistake. Knowledge monopolisation, unwillingness to share them, or laxness to acquire new one can appear as rather dangerous in extreme situations.
After all, a crisis manager is not universal. In the crisis staff everybody has its role in his environment. He has to accept team work but in spite of flexibility and co-operation with others he should not be afraid of independent decision-making, since there will hardly be enough time, information and adequately qualified people for team decision-making. He is supposed to have qualities like loyality in addition to high professionality, thorough correctness and overall idea of company operations.
A crisis manager should not lack creativity, divergent thinking, social-communicative experience. Also methods of conducting people as well as methods of enterprise management should be the part of his comprehensive knowledge.
In addition to continuing vocationally oriented education (specialised detail knowledge and skills) knowledge exceeding the framework of specialisation - social, planning, decision-making (Frybert, V., l995) are becoming more and more significant. A crisis manager, specialist must have generalisation capabilities, he has to learn how to structure complex problems, must be able to use synergic effects.
The areas of requirements for detailed professional education in relation to the basic factors influencing a personal approach are described in the following figure (Figure 3) and then in the Figure 4. Their enumeration, however, is not fully exhausting.
Figure 3. Selected elements of problematic areas of educational
systems
for preparation of managers for resolving of crisis situations
In the outlined model of related relations (Figure 3) enter the individual elements, which emphasize to problematic areas of educational systems for preparation of managers for resolving of crisis situations. Summary of these elements will not be obviously complete, but these elements can represent a stimulus for finding more relations and as a result they can become an incentive for further improvement of preparation of managers for crisis management.
Figure 4: The areas of requirements for detailed professional education
Figure 5: The areas of requirements for detailed professional education (completting)
If the top management, mid-link management as well as ordinary workforce are to contribute to the success of an organisation as best as possible, react on a crisis event and treat it, they have to be properly trained. Mutual interlinkage of particular phenomena forces organisations to carefully economize their activities, and to active management performed by real professionals. Such tendency is inevitable if we are to face growing complexity of problems.
In last year, the crisis management has been discussed more and more. There are also many discussions about the system of training and the appropriate preparation for crises. The system of preparation for crisis management includes many disciplines, which the future managers study during their training. However, the common and unifying element is still missing. Crisis management even in practice is still being implemented ad hoc and not as a whole unit.
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