Turning Crisis into Opportunity

Chapter 34: Turning Crisis into Opportunity 

Answer all of the following questions. Use examples from outside of the textbook.

• Organizations often give employees additional responsibilities that may be outside their normal activities. Assume a company wanted to start an Enterprise Risk Management team, but could not afford to hire people to staff.  The company hired a risk manager and assigned 4 employees to the team. The employees were told they would be acting as part time risk associates.  What are the advantages and disadvantages of assigning full time employees additional responsibilities as part time risk associates within their organizations?
•  Paying attention to external stakeholders is important  for organizations to remain competitive.  Identify one organization (not listed in the textbook) whose strategy failed because management did not consider the actions of external stakeholders. Explain the failure and what the company could have done differently.  Note: Do not use GM, Blockbuster, Toys R Us or Nokia.
• Should organizations need to experience a crisis to prepare adequately for risks? Provide examples no found in the textbook to support your answer.

Required:

1. Provide an initial posting of 400 to 600 words by Thursday. Then provide two responses of at least 100 words each that extend or provide alternate views for the initial posts of at least two students by Sunday.  Repetition of the questions and the reference list are not included in the word count.
2. Do not access the threads until you are ready to post your entire answer.  If you make a mistake, do not edit the response; reply to your own answer with the revision.
3. Use formal writing. Errors will reduce your grade.
4. Respond to the initial posts of at least two students, extending the discussion by adding new insights, different examples from your experience, or from other sources. Add value to responses to classmates and provide support in the form of a reference and citation in at least one of the responses. Videos, articles and information from other credible sources are useful to accomplish this part.
5. Apply critical thinking. Probing questions or challenging assumptions are strongly encouraged for maximum points. Agreement, quoting other learners, or repeating the case content will count as zero words and zero points. It’s great to ask questions in your responses to classmates, but also provide substance and do not ask questions after 8pm on Sunday, as you cannot expect responses to them that late on the last day of class for the week.
6. The textbook is not considered common knowledge. If you use information from the book in your answer, citation to the book is required.
7. Post answers directly in the discussion box instead of attaching documents.

ANSWER

Turning Crisis into Opportunity

1. Advantages and Disadvantages of assigning full-time employees additional responsibilities

Advantages

Giving employees additional responsibilities as part-time risk associates is a form of job enrichment. Job enrichment refers to expanding an employee’s task set. According to Tumi et al. (2021), job enrichment boosts creativity, expands an employee’s skillset, and adds variety to the daily routine. This breaks the employees’ monotonous routine, making their work interesting.

Job enrichment is often accompanied by autonomy and freedom. The rationale for this task autonomy and freedom is that the employees need to be flexible to perform both roles effectively. Therefore, organizational leaders provide this flexibility by giving the employees’ task autonomy and the freedom to organize their work schedules. According to Tumi et al. (2021), this freedom allows employees to be more productive at work. Some studies have reported that enriching the employees’ experience enhances job commitment and motivation (Tumi et al., 2021). When employees perceive that the organization trusts them with greater responsibilities, their motivation significantly improves.

Disadvantages

The first disadvantage of additional roles for full-time employees is that it increases their workload. While some workers may be able to reorganize and adjust to the new roles and schedules quickly, others may struggle to adapt to their new obligations, reducing motivation. The increased workload may lead to employee frustration, exhaustion, and a decline in overall productivity.

Another disadvantage is that it may increase conflicts. Not all employees are qualified to take up additional responsibilities. Some may want more responsibilities, but their abilities are limited. On the other hand, others may have the skills and capacity to take up more responsibilities but are unwilling to take up new roles. These conflicting responsibilities may cause resentment and dissatisfaction among employees.

The third disadvantage is that the employees may not have the expertise to carry out the risk assessment tasks effectively. Consequently, they may feel incompetent, reducing their motivation and job satisfaction.

2. Identify one organization (not listed in the textbook) whose strategy failed because management did not consider the actions of external stakeholders. Explain the failure and what the company could have done differently

Circuit City was a multinational company founded in 1949. It specialized in TVs, boomboxes, and stereos but diversified into retail automobiles in the 1990s. Initially, consumers had the opportunity to customize the vehicles they wanted, making the company very popular. Due to financial constraints, the company fired over 3,400 of its experienced salespeople, a decision that initiated their downfall (Aaslaid, 2019). Customers (external stakeholders) started complaining about the competency of the company’s salespeople. The customers claimed that the company’s store was large and impersonal, and its salespeople were inexperienced and lacked knowledge of its products and services. The company did not respond to its customers’ complaints and concerns, leading to its eventual downfall.

Circuit City should have listened and responded to its customers’ complaints and concerns. They should have trained the remaining salespeople and ensured they have the necessary skills to meet customers’ needs. Meeting customers’ needs enhances customer satisfaction, which, in turn, improves customer loyalty.

3. Should organizations need to experience a crisis to prepare adequately for risks? 

 Yes, an organization needs to experience a crisis to prepare for risks adequately. A company can risk management plans to mitigate or minimize the effects of an anticipated crisis. However, Wang (2007) points out that effective crisis management requires organizational learning. According to the author, many organizations ineffectively respond to crises despite having comprehensive disaster preparedness plans. According to the authors, these organizations often do not know what to do when faced with a real crisis. They have the preparedness plan but lack the experience to execute it.

However, a real crisis provides organizations with learning opportunities to improve organizational adaptation, vitality, and longevity. For example, Hewlett Packard (HP) was badly affected by the 2003 SARS disaster. However, it took the experience as a lesson, enabling it to develop an effective preparedness program. According to Hollands et al. (2007), HP successfully navigated numerous flu crises, thanks to its experience from the previous SARS disaster. This event demonstrates that organizations need to experience a crisis to prepare adequately for risks.

References

Aaslaid, K. (2019, July 1). Corporations That Failed to Innovate. Valuer.IT. https://www.valuer.ai/blog/50-examples-of-corporations-that-failed-to-innovate-and-missed-their-chance

Hollands, J., Lauriola, R., & Jaffer, M. (2007). How Hewlett-Packard used lessons from its response to SARS to develop a pandemic flu preparedness programme. Journal of Business Continuity & Emergency Planning, 2(1), 42-47. https://www.ingentaconnect.com/content/hsp/jbcep/2007/00000002/00000001/art00006

Tumi, N. S., Hasan, A. N., & Khalid, J. (2021). Impact of Compensation, Job Enrichment and Enlargement, and Training on Employee Motivation. Business Perspectives and Research, 10(1), 227853372199535. https://doi.org/10.1177/2278533721995353

Wang, J. Organizational Learning and Crisis Management. Barry University.

https://files.eric.ed.gov/fulltext/ED504551.pdf

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