Crisis & Change SMART Leadership Consulting By: Daryl Horney

1. ©
SMART Leadership Consulting
a SMART way of doing business
May 28, 2014
Daryl Horney
SMART Leadership Consulting
What are your thoughts regarding how crisis relates to
change?
To begin, I would like to express that Armenakis & Bedeian (1999) paper
provides a plethora of solid references in the area of organizational change. I
wrote a few papers and have referenced their research and methods.
In my opinion, crises will always create changes for an organization. There
are many examples throughout our recent history to provide evidence of this.
Whether a crisis affects a big, medium or small organization; change is a
common denominator as a result.
One crisis that created drastic change in a massive organization is that of
Tylenol crisis of Johnson & Johnson (my italics) in 1986. The company at the
time was the leading provider of American painkiller medicine. Seven people
were reported dead in the Chicago area after taking the medication. What
followed was a dramatic drop in stock prices, millions of their products
pulled off shelves, and the company having to reinvent itself or at least
rebuild consumer confidence (Lewin 1986). Mitchel (1989) suggests the most
impressive change that took place afterwards was the introduction of the
triple-seal, which provided greater strength for tamper resistance.
Pauchan & Mitroff (1988) distinguish two types of organizations. One that is
self absorbed and believes that nothing bad will ever come to their
organization as long as the leaders themselves are running the show. They
refer to this type of organization as SIC, standing for self-absorbed. The
second type they refer to as PSRC or organizations that care for their

2. customers, have regard for the environment, and essentially are the polar
opposite of what they describe as the narcissistic SIC.
I find myself prescribing to the latter, the PSRC. I have worked for companies
that represent both sides of the spectrum. The bottom line is extremely
important and for the SIC’s. It is perhaps the only importance of being in
business for them (SIC). I do not disagree that the bottom line is not crucial,
however I do would rather be involved with an organization that is willing to
implement crisis management (CM) tools and have them prepared to use in
emergencies. I do not find organizations in the SIC category to be empathetic
to the customers, nor to their employees as a result. I also, would not feel
comfortable being part of an organization that did not have mechanisms in
place for emergencies. I do not want to be swimming in the ocean when the
ship sinks without a life vest. As Wilkinson & Mellahi (2005) contend,
organizations fail when they do not recognize or anticipate pressures that
threaten their existence. I believe PSCR organizations do anticipate these
pressures, thus their likely hood to have grounding in CM methodologies. We
cannot predict a crisis in the future, but we can work on preventing it (Turner
1976).
Reference
Armenakis, A.A. & Bedeian, A.G. (1999) ‘Organizational change: a review of theory and
research in the 1990s’, Journal of Management, 25 (3), pp.293–315. Available
from:http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Journal+of+Manageme
nt&volume=25&issue=3&spage=293&date=1999
Kilduff, M. & Dougherty, D. (2000) ‘Change and development in a pluralistic world: the view
from the classics‘, Academy of Management Review, 25 (4), pp.777–782. Available
from:http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Academy+of+Manage
ment+Review&volume=25&issue=4&spage=777&date=2000
Lewin, T. (1986) ‘TYLENOL MAKER FINDING NEW CRISIS LESS SEVERE’ Business Day,
New York Times, February 12, 1986. Available from:
http://www.nytimes.com/1986/02/12/business/tylenol-maker-finding-new-crisis-less-
severe.html
Mitchel, M. (1989) ‘The impact of external parities on brand-name capital: the 1982 Tylenol
poisonings and subsequent cases’ Business Library. Available from:
http://findarticles.com/p/articles/mi_hb5814/is_n4_v27/ai_n28586092/
Turner B.A. (1976) ‘The organizational and interorganizational development of
disasters’, Administrative Science Quarterly, 21 (3), pp.378–397. Available
from:http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Administrative+Scienc
e+Quarterly&volume=21&issue=3&spage=378&date=1976

3. K. (2005) ‘Organizational failure: Introduction to the Special Issue’, Long Range Planning:
International Journal of Strategic Management, 38 (3), pp.233–238. Available
from:http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Long+Range+Planning
&volume=38&issue=3&spage=233&date=2005
Pauchant, T.C. & Mitroff, I.I. (1988) Crisis prone versus crisis avoiding organizations: Is your
company’s culture its own worst enemy in creating crisis? Organization & Environment, 2 (1),
pp.53–63. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Organization+%26+En
vironment&volume=2&issue=1&spage=53&date=1988