Operations Management Assignment 1
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TheLeadershipProcessDuringanOrganizational.pdf
The Leadership Process During an Organizational Crisis
Rodrigo Antônio Silveira dos Santos Professor at Universidade da Força Aérea – Rio de Janeiro – RJ, Brazil
Rodrigo BandeiradeMello Professor at Fundação Getulio Vargas, Escola de Administração de Empresas de São Paulo – São Paulo – SP, Brazil
Cristiano José Castro de Almeida Cunha Professor at Universidade Federal de Santa Catarina – Florianópolis – SC, Brazil
ABSTRACT: This article reports results of a qualitative study that examined the leadership process during an organizational crisis in the Brazilian electrical sector. The studied organization is a company involved with the generation and distribution of electric energy, which faced a crisis because of the
approximately 52 hours. In this context, the authors analyzed the crisis’ stages and the organizational crisis management phases, in order to identify the leadership tasks adopted by organizational lead
analyzed the leadership tasks used to address challenges: sensemaking, decision making, meaning making, terminating and learning.
Crisis leadership, crisis management, crisis response, critical infrastructure breakdown, or ganizational leadership.
94
ISSN: 19843046
JOSCM | Journal of Operations and Supply Chain Management
© J O S C M | São Paulo | V. 09 | n. 1 | janjun 2016 |94109
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Article invited
DOI:
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
95
1. INTRODUCTION
During the past years, many scholars have conduct ed conceptual and empirical studies on the topic of organizational crises (Boin et al., 2005; Boin et al., 2010; Hale, Dulek, & Hale, 2005; Hermann, 1963; Lagadec, 2009; Pearson & Clair, 1998; Pearson &
occurrence of crises is frequent in the organizational quotidian, making possible the research of an im portant means of change in organizations: the crisis itself. Understandably, specialized research present
lowprobability, highimpact event that threatens the viability of the organization and is characterized
tion” (Pearson & Clair, 1998). These unique features showed the importance of being prepared for orga nizational crises and introduced the study of crisis
manage those that do occur” (Pearson & Clair, 1998).
Recent studies proved that a crisis can strike a com pany that is not prepared for the constraints brought with it (Hart & Boin, 2001; Barton et al., 2015; Bazer
cale can swiftly escalate into a crisis for an entire or ganization, justifying the need for appropriate struc tures to focus on crisis management. Then, people in relevant corporate roles should be concerned with the prevention, response and recovery of crises. This
These authors suggest that key decisions in crises are often made by a small, tightly knit group of individu als. Besides, recent studies concluded that crisis and leadership are closely intertwined phenomena (Boin & Hart, 2003; Boin et al., 2005; Hannah et al., 2009; Mi
as episodes of threat and uncertainty, that requires urgent action (Rosenthal, Boin, & Comfort, 2001). In such distress, it is a natural inclination to look to
while the organization is stretched to its limits.
The literature about crisis and leadership suggests
tionship between leaders and followers (Halverson, Murphy, & Riggio, 2004; Hannah et al., 2009; Hunt, Boal, & Dodge, 1999; Pillai, 1996). Probably, the changes in this relationship is related to the fact that a crisis involves something new, which demands an ability to learn, as previously learned experience may come up short when the ordinary steady state of the organization is disrupted (Moynihan, 2009;
the current knowledge owned by the organization cannot solve the crisis’ constraints. In this way, or ganizational actors may mobilize to produce a new solution and promote the necessary adaptation for
Besides, the leadership challenge of mobilizing peo
cause the crisis stretches the company to the limits, while concepts of uncertainty and risk are very pres
paid in the literature to leadership processes during organizational response to crises and extreme con texts (Hannah et al., 2009; SilveiradosSantos, 2012). Mobilizing people during a crisis involve a lot of questions that are not being asked on the researches
on charismatic leadership in crisis situations (Beyer
Halverson et al., 2004; Pillai, 1996), the researchers
preparedness and the leaders’ charismatic behav
on how the leadership processes are developed. In fact, leadership processes required to react a crisis involve key aspects that are not taken into account, such as technical, organizational, cognitive and tem poral factors.
It is very important to understand the ability of or ganizational systems to maintain the desired levels
structure and process remain the same during the cri sis? Are the decisions taken with the needed speed? It is also important to understand how organizational leaders understand the crisis and how they commu nicate these meanings to all stakeholders. As the crisis involves new circumstances, a sensemaking process
to investigate the leadership capabilities to manage
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
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sensemaking processes. In the same way, the role and perception of time in organizations under extreme circumstances can change completely.
Driving the present study is the absence of pub lished research examining the questions above. As a
ship processes, this study tries to focus on the lead ership challenges presented during organizational crisis response. It is at the response stage of a crisis that its characteristics of short decision time, com
ed. Nevertheless, empirical studies about leadership processes during extreme contexts are rare (Hannah et al., 2009; SilveiradosSantos, 2012). This paper’s aim, then, is to analyze an organizational crisis in the Brazilian Electrical Sector, focusing the leader ship challenges and identifying the crisis leadership tasks used to address each challenge.
great hydrographic basin, Brazil has one of the larg est energetic potential in the world. The installed ca pacity of the Brazilian energy matrix reached more
These numbers demonstrate that the Brazilian Elec trical Sector is a large industry in the country, re
Brazilian Economy.
This study, then, is structured in four major sections. Firstly, the main theoretical background in organi zational crisis, crisis management and crisis leader ship are presented. After that, it is shown the meth odological assumptions that guided the research.
a theoretical discussion to present the main contri butions of this study.
2. THEORETICAL BACKGROUND
Crises come in many shapes and forms. Human
is impending, either one with the distinct possibil ity of a highly undesirable outcome, or one that can result with an extremely positive outcome. Never theless, the negative connotation of the word crisis often prevails and when a crisis occurs, people auto
matically think that it arrives as a barrage of urgent,
time to organize or plan appropriate responses, and making people and organizations to operate at their extreme. In this context, the organizational leaders’ behaviour and decisions will be decisive to the re sults achieved after the crisis period. At this section, the subjects of organizational crisis, crisis manage ment and crisis leadership will be explored.
2.1 Organizational Crisis
could be called an organizational crisis. For Pear
lowprobability, highimpact event that threatens the viability of the organization and is characterized
tion, as well as by a belief that decisions must be
which covers some common elements that are pres
breakdown of key equipment, major plant disrup tion, product tampering, decline in major earnings, hostage taking, terrorism, natural disasters or other kinds of organizational crises.
ganizational crises: (1) are highly ambiguous situa
antelli, 1988), creating a sensemaking process that is carried out while the crisis unrolls (Laere, 2013;
low probability of occurring, although pose a major threat to the survival of an organization (Bazerman
to organizational stakeholders (Alpaslan, Green, &
spond to the crises (Boin & Smith, 2006; Shaw et al.,
status quo, pre senting a dilemma in need of decision that will result
between leaders and followers, as the followers be
the crisis stress (Halverson et al., 2004).
This is, of course, an academic shortcut on the way toward understanding organizational crisis. Boin et al. (2005) show that, in real life, it is not always clear when exactly organizations experience a situation
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
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in terms of crisis. Some situations seem crystal clear and others are clearly debatable. In this way, the def inition of a situation in terms of organizational cri sis is the outcome of a political process. Crises, then, are the result of multiple events, which interact over time to produce a threat with devastating potential. But this result will only be considered a crisis if or
crisis. Of course, the earlier one situation is identi
a. Distinct phases of a crisis
If it is possible to draft a time continuum for a crisis, it would have, at least, three major phases: the incuba
2004) and the aftermath (Boin, McConnell, & Hart, 2008). First of all, the incubation period, which can be also referred as the precrisis stage (Shrivastava,
responds to the period of time where the organiza tion is on its steady state and no danger or threats
ordinary state, with the normal structure and cur
the prodromal stage is the warning stage, when the leaders should improve the organizational abilities to identify any kind of signal that can demonstrate
says that it is easier to manage a crisis in the pro dromal stage, because if the organization is able to identify and act on the crisis escalation signals, the leaders have the opportunity to avert the crisis. It is also important to remember that if the leaders rec ognize these signals but are unable to dispose of it for whatever reason, just having a sense of what is about to happen will help the organization to pre pare for the critical period.
The triggering event marks the turning point (Fink, 1986) and represents the onset of a qualitatively dif
ally occurs over a lengthy period of months, years or even decades, the critical period is usually the much briefer time of the minutes, hours or days of the crisis itself. Fink (1986) call this phase as the acute
crisis stage and it is usually the stage which most people have in mind when they speak of a crisis. If the prodromal phase alerts to the fact that a hot spot is brewing, the acute crisis phase tells that the worst has erupted. It is in this phase that the nega tive aspects of the crisis appears, all at once: (1) the
communication channels reduce (Hale et al., 2005;
volved (Acquier, Gang, & Szpirglas, 2008; Alpaslan
ed (Boin et al., 2010; Hannah et al., 2009); (5) decision
this phase is the speed and intensity in which a se ries of constraints appear, leading the organization to the aftermath period.
Also known as the chronic crisis stage (Fink, 1986), the aftermath is a period of recovery, where the organization tries to respond to the constraints presented in the earlier stage. The chronic stage
tions reached their new ordinary state, which can be
crisis. Some authors say that the crisis cycle begins again and the organization reaches a new prodro mal stage, for future crises (ChekkarMansouri &
b. Crisis Management
Crises can happen in any kind of organizations and every crisis will cross the stages presented above. According to Fink (1986), sometimes all phases may occur within a very short space of time. At other times, there is an extended, longfused prodrome stage. However, it is very important to identify the crisis signals in the incubation period, trying to avoid the occurrence of the triggering event or, at least, to prepare the organization for the critical period. It is important to remember that a crisis, like other orga
ation and the recurrent happenings are in a state of
recognize. An organization must recognize any kind of evidence that can point to an unrolling crisis, in order to intervene proactively (Fink, 1986).
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
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signal detection is at the heart of crisis manage ment. According to this author, all crises send out a trail of early warning signals. If these signals are picked up and acted upon, then a crisis can be pre vented in the precrisis stage, preserving the organi
(2004), early signal detection is vital because crises
high rates of success of High Reliable Organiza tions (HROs) is their capacity to act mindfully, what means that HROs strive to maintain an underlying style of mental functioning that is distinguished by continuous updating and deepening of increasing ly plausible interpretations of what the organiza
remedies it contains.
These are the same practices recommended by cri sis management researchers (Boin et al., 2005; Fink,
Roe & Schulman, 2008). According to Pearson & Clair (1998), organizational crisis management is a
manage those that do occur. Crisis management con sists of three distinct phases: crisis prevention, crisis response and recovery from the crisis (Fink, 1986). The crisis prevention occurs in the prodromal stage of the crisis, when the organization tries to iden tify crisis signals and act upon them with the aim to avert the crisis occurrence. The response stage is
ger a crisis. At this point, organizations shift their
environment, the organization and the stakeholders.
from the event and implement the changes needed.
Traditionally, crisis management involves manage
critical period of time, in which leadership decisions
2002). In this way, organizational leaders have a spe cial responsibility to help safeguard the organization and its stakeholders from the adverse consequences of a crisis. Leaders who take this responsibility seri ously would have to concern with all crisis’ phases and with all crisis management’s stages (Boin et al., 2005), as will be commented in the next section.
c. Crisis Leadership
implied that leadership is a process where a leader
that leadership is not a linear, oneway event, but rather an interactive event, which would not happen
encing others to understand and agree about what needs to be done and how to do it, and the process
leadership, it is important to say that this paper will
ing a crisis, in order to implement crisis manage ment practices, can be called crisis leadership.
sis leadership is the continuous responsibility to
factors during all stages of a crisis. These factors are: (1) crisis types; (2) crisis mechanisms; (3) crisis sys tems; and (4) crisis stakeholders. For crisis types, it is understood the particular set of crises that an or ganization chooses to prepare. Then, crisis mecha nisms include early warning signals detection, dam age control systems and business recovery systems. The crisis systems covers the mechanisms by which a crisis unrolls and the crisis stakeholders are all of the various parties, institutions, and even societies,
to manage these four factors before, during and after a crisis, addressing these factors by the adoption of
Boin et al of strategic tasks that encompasses all activities as sociated with the stages of crisis management. These
critical tasks: sensemaking, decision making, mean ing making, terminating and learning.
Sensemaking means that organizational leaders must recognize from vague, ambivalent, and contra dictory signals that something out of the ordinary is developing. The critical nature of these develop ments is not selfevident and the leaders have to
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task means that leaders must appraise the threat and decide what the crisis is about. The second task of crisis leadership is decision making because crises bring various pressing issues to be addressed. In crisis circumstances, the situation remains unclear and volatile, shortening the time to think, consult and gain acceptance for decisions. In this way, crises force organizations to confront issues they do not
meaning making because a crisis generates a strong demand from stakeholders to know what is go ing on and to ascertain what they can do to protect their interests. In this context, leaders are expected to reduce uncertainty and provide an authoritative account of what is going on, why it is happening, and what needs to be done (Boin et al., 2005; Mait lis & Christianson, 2014; Maitlis, 2005). This means that, after the two previous tasks, when leaders have made sense of the events, arrived at some sort of situational appraisal and made some choices for
it are enhanced.
to understanding and acting upon crisis constraints.
ing the crisis and learning with it. In this way, the fourth task is terminating the crisis. According to Boin et al. (2005), a sense of normalcy will have to return sooner or later. So, it is a leadership task to make sure that this happens in a timely and expedi ent fashion. Crisis termination is twofold because it is about shifting back from emergency to routine; and it requires some form of downsizing of crisis operations at the same time of rendering account for what has happened and gaining acceptance for
pleted, the crisis has terminated and the ordinary state of the organization is back. After that, it is
crisis and making organizational lesson drawing.
of potential lessons for contingency planning and training for future crisis. In this way, as a crisis situ ation involves something new, it demands an abil ity to learn during and after the crisis as the previ ous learned experience may come up short (Boin et al., 2005; Deverell, Hansén, & Management, 2009;
3. METHODOLOGICAL APPROACH
As an initial investigation of leadership processes during an organizational crisis, this study was de signed to discover and organize concepts. A qualita tive research approach immersed the researchers in the data and encouraged their objectivity and open
as part of a particular context and its interactions. This understanding demonstrates that this kind of
pen in the future. Although, it aims to understand the nature of the studied phenomenon and its set tings – what it means for participants to be in that
1998). The same author explains that the qualitative research assumes that meaning is embedded in peo ple’s experience and that this meaning is mediated through the investigator’s own perceptions.
In such a way, the researcher is the primary instru ment for data collection and analysis, which creates the demand for the investigator to physically go to
view its stakeholders (Merriam, 1998). So, the meth odological procedures of this research range the selection of an organization, interviewing its stake holders and the analysis of the interview’s transcrip tions, as follows.
a. Sample
In order to reach the research’s aims, the Brazilian Electrical Sector was selected because of its turbu lent context in the recent years, caused by several organizational crises, such as lack of energy for the
the hydroelectric power stations and predictions of an electrical collapse in the recent future. In this context, it was selected a company involved with the generation and distribution of energy that has recently faced organizational crises. As the research was mainly conducted in the Brazilian state of Santa Catarina, and there is only one company allowed to distribute energy at that state, the company CE LESC S.A. was chosen to be studied. It is important to say that the company was formally consulted and agreed with this research.
After identifying the organization and with its ap proval for this study, the researchers listed the re cent crises in which the company was engaged. The criteria for chosing a crisis episode for study
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
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were the following: (a) a crisis that reached at least 50.000 consumer units; (b) was solved after at least 48 hours; and (c) happened during the last 15 years, in order to make possible contacts with people that was directly involved in crisis response activities. As a result, 5 crises with big proportions were listed and one crisis was selected.
The chosen crisis was a blackout in the city of Flo rianópolis, capital of Santa Catarina state. The rup ture of one energy transmission line inside a bridge caused a huge power outage and the electricity sup ply was interrupted for the whole city, wich is an
for more than 55 hours. This crisis was unique be
Catarina state, for more than two days, bringing great constraints inside the company and for the
last 50 years that the city ran out of energy for more than 48 hours uninterruptedly.
smaller cities, which were not a state capital. Besides
commented. The other 4 crises were related to nat
waterloggings. Because of that, the organization al ready had a protocol to respond to the crisis and the leaders pursued the response activities that should be conducted on those situations. On the other side, the Florianópolis’ blackout was caused by an infra structural collapse that the organization did not un derstand the reasons. Then, the leaders had to learn about the crisis and develop new mechanisms and leadership processes to solve the crisis.
This characteristic was favorable to this research’s design and the Florianópolis’ blackout was selected because of its dimensions, the need to grasp the cri sis until it unrolls and because it mobilized a great amount of employees to work on crisis response. So, the leadership processes would emerge naturally and could be explored with more emphasis.
After identifying the crisis that would be studied, the research participants were recruited and select ed to represent the leaders and followers involved
snowball sampling strategy and a total of 1 execu tive and 3 managers were selected. All of them were
hierarchical levels.
b. Data gathering
Data were gathered through extensive interviews with the research participants described above and through detailed reviews of secondary data sourc es. The use of interviews in the qualitative research
information for additional insights and theory de
& Corbin, 1998). This approach, its execution, and the drivers behind its use are consistent with argu ments that qualitative methods derive from a com bination of interpretivist sociological traditions and symbolic interacionism (Godoi, Bandeirade Mello, & da Silva, 2006).
A multitude of organizational documents and re ports was consulted, and one researcher performed participant observation inside organizational rou tines for aproximately 6 months, in order to under
contact, the company’s Director of Operations, an executive position, was interviewed and indicated three managers that worked with him during the Florianópolis’ blackout episode. Three interviews were conducted with each informer, totalyzing 12 formal and semistructured interviews, whith more than 600 minutes of dialogue. All interviews were recorded, transcribed and confronted with organi zational reports, local observations and media cov erage about the studied crises. All data was collected approximately four years after the crisis and all re spondents still work in the company.
c. Data analysis
Data analysis steps were conducted with the help of Atlas.ti software, in search for codes. Data coding fol lowed an inductive approach (Strauss & Corbin, 1998), with the codes emerging after data collection. All tran script elements related to the leadership processes dur ing the crisis response were assigned with a code. Each
validation on data and happened in cycles until theo
data analysis processes, such as follows:
a) crisis constraints (kinds of problems caused by the crisis);
b) organizational structure (social coalitions designed to solve and communicate specific problems);
Santos, R. A. S., Mello, R.B., Cunha, C. J. C. A.: The Leadership Process During an Organizational Crisis
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c) cognitive factors (sensing and identifying
problems, establishing priorities and learning
mechanisms);
d) development of solutions (kinds of strategies cre
ated to solve problems); and
e) motivation mechanisms (how the leaders moti
vate their followers).
ations described in the interviews. The media cov erage for the studied crisis was also very important to validate the categories that resulted from data
during the interviews and the second order themes that emerged from the data and were considered the main categories for data analysis.
Figure 1: Example of data structure from concepts to themes
First-Order Concepts Second Order Themes
“Our biggest problem was logistics. We worked with more
than 500 people” (Respondent C).
“At that time, all cellphones ran out of battery. It was a problem because we had to walk to communicate. So,
communication was a great problem” (Respondent B).
“Security was a question that bothered a lot” (Respondent C).
“We didn’t have a specific department to deal with that. Then,
our Director became to call all the people that worked with
transmission lines” (Respondent A).
“There wasn’t any contingency plan. This kind of problem
was quite impossible to happen. But it unfortunately happened”
(Respondent D).
“The groups were divided while people were arriving to help”
(Respondent D).
“I was returning from lunch when the energy was interrupted.
I was driving and all the traffic signals switched off. We didn’t
know what was happening” (Respondent B).
“My secretary counted. I gave more than 100 interviews
during one day and a half trying to explain the problem to the
customers” (Respondent C).
“Then we figured out that the problem was on the bridge”
(Respondent A).
“At the beginning of the night, we decided to build a new line,
but we didn’t know how to do it” (Respondent A).
“The the ideas were coming ... what about an air line? No, it is
impossible to cross the sea! And an engineer decided to walk
through the bridge and figured out that the structure had some
spaces that we could hang the isolators for the new line”
(Respondent B).
“He did the project inside his head and we began to work”
(Respondent B).
“I didn’t noticed lack of motivation. A man, to be on the top
of a lamppost, at three o’clock in the morning, working for more
than 15 hours, risking his life ...” (Respondent C).
“They did it because they respect the company, they are proud
of our organization. Mainly the people we brought from other
cities ... solving the problem was a matter of honour ...”
(Respondent C).
“It was a kind of sinergy ... when anyone arrived and crossed
the bridge to help us, a kind of energy was there ...” (Respondent
B).
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4. MAIN FINDINGS
Through the researchers’ immersion in the data (i.e., through repeated iteration between interview ses
and data analysis), came a set of models used to de scribe how the leadership processes unfolded dur ing the examined organizational crisis. Below are
a. Crisis Constraints
“[...] then we realized that it would take long. It
happen. The city was without energy and we had no plan. Can you imagine what could hap
Having in mind that the examined crisis caused the lack of energy in a whole town during approxi mately 52 hours, a set of problems arose during the crisis response. The leaders decided to build a new transmission line and restore the electricity supply chain and delivery in the city. During the creation of the new structure, a lot of constraints emerged and became a challenge to the leaders, as follows:
tests and sent communications to the media claiming for the electricity back in their homes;
some thieves tried to assault homes, shops and citizens;
restored as quick as possible;
line in a few hours was not easy. This kind of job, when done as usual, takes months. During cri sis response, the company needed to make it in a couple of days. As a result, a lot of technical prob lems arose, such as lack of the adequate equip ment or the absence of appropriate projects;
tion, the employees worked more than 16 hours, uninterruptedly, in order to restore the energy delivery. As a result of the extreme work condi tions, the employees became tired, what could generate accidents;
no energy in the whole city, communicating by phone or email was impossible, once they could not charge their computers or cell phones during the new supply chain creation;
es to solve the crisis were very complex because the communication between executives, manag
of information was slow and sporadic;
straints during the crisis, and the leaders should deal with all of them, there were psychophysio
emotions as the crisis unfolded.
b. Organizational Structure
structure to follow in cases like that ... to make these decisions, call this guy, call that guy ... we didn’t have that. After this episode, we made a contingency plan and we know exactly who should be called. But during that time, we didn’t have such structure.” (Informer A).
informal structure. Then they decided to call
one started to look for the needed items in the
In order to consider all information about the crisis, the organizational structure has changed. Although the company had no crisis mobilization plan, a group of executives and managers was randomly structured to decide how the organization would respond to the crisis. The company stablished the address of an electricity substation that was near to the involved bridge as the Crisis Response Head
the company. In this way, an informal coalition was
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formed to make the strategic decisions. It is impor tant to say that two of the research informers made part of this small group of people that made impor tant decisions, such as the decision to build a new transmission line and the directions that this new line would have. Then, the new supply channel was divided in four parts, and it was randomly designed one manager for each part.
During the operational tasks to build the new trans mission line, the company respected the organiza tional formal structure of directors, managers and employees. So, the organizational structure was
gineers that arrived at the Crisis Response Head
sions about the crisis and its response. Then, four engineers were designed to manage the services at
already work with transmission lines and they fol lowed power relations due to their formal position and hierarchy in the company.
c. Cognitive Factors
the studied organizations or other institutions, con
was the new supply channel as a whole, the priori ties were established by the board of directors and the social coalition formed in the Crisis Response
On the other hand, when the problem sensing and
supply chain that was being constructed, the sense
conducting the sense giving was not formalized and its equilibrium was found during the crisis, in an emergent manner.
d. Development of solutions
The company was not prepared for this kind of crisis and there was not any kind of plan to avert and respond to crises. As a result for this improper crisis management, without crisis prevention and signal detection, the vast majority of decisions and
without any kind of previous deliberation. As the
a possible solution until the constraint was solved. The needed knowledge to respond to the crisis was provided for a vast number of people and the solu tions were being made at the same time as the crisis was being unfolded.
e. Motivation Mechanisms
“When people crossed the bridge and went
... I don’t know why ... and the person had that
working. The guy did not came down until he
The research participants revealed that the employ ees kept all the time motivated, in spite of the long work journeys, without being necessary any kind of
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promotions or others. According to the informers, solving the crisis and restoring the energy delivery was a question of honour for the company and its employees. In this way, they kept motivated all the time, in order to restore the normality for the citi zens as soon as possible. As a result, the participants made clear that the company solved the problem and the employees became more united and friend ly to each other after the crisis.
5. DISCUSSION
In order to analyse the leadership process during the selected event, it is important to understand why the lack of electricity in the town was considered a crisis.
It is important to perceive that all the crisis charac teristics were present in the studied case, as the cable rupture was a low probability event that brought high consequences for the organization and for a great number of external stakeholders, the citizens included. The situation brought with it a lot of con straints that imposed a severe pressure for quickly resolutions, as commented above, and gave great challenges for the organizational leaders. In accor dance with Boin et al. (2005), it was not clear that the crisis was unfolding and the organizational lead ers and stakeholders only perceived the threats af ter the occurrence of the triggering event, the cable
crisis was only decided after the whole city became out of energy. At this point, the organizational lead ers perceived the major problem, the power outage, and decided to randomly create a crisis group that got together near the rupture point to start the sen semaking process, discover the causes of the event
process (Boin et al., 2005), developed by the leaders and employees that were together in the Crisis Re
b. Crisis stages
About the crisis stages, the three major phases were evident. The precrisis stage (Fink, 1986) can be rep resented by the whole period of time prior to the ca ble rupture, in which no crisis signals were detected and no crisis prevention procedures existed. In this
and had no abilities to identify any information that could demonstrate the critical stage of the existing electricitydistribution system and the escalation of the crisis. Maybe the crisis could be averted if the organization had such mechanisms.
The critical period (Stein, 2004) started with the trig gering event, the rupture of the cable rupture. This stage, also known as acute crisis stage (Fink, 1986),
event. A lot of contingencies became relevant and, in accordance with Hale et al. (2005), the communica tion’s channels options reduced immediately after the cable rupture. At the same time, all stakehold ers, internal and external, became involved, in ac
the citizens and the media. Because of the social problems, time became relevant and the decision making should be done as quick as possible. So, this stage existed for 6 hours, until the main decisions were made and the leaders agreed in the causes of the crisis and what should be done.
The chronic crisis stage (Fink, 1986) started when the
new transmission line was ready. This period, when the city was out of electricity, also can be considered the crisis aftermath (Garland, 1998).
c. Crisis Management
In the studied event, the majority of crisis manage ment practices were situated in the crisis response stage (Boin et al., 2010; Hale et al., 2005; Leidner, Pan, & Pan, 2009). The crisis prevention stage could not be observed, as the company had not any kind of plan to avert and respond to crises. Incubation processes thus remained latent and undiscovered. Although, the recovery from the crisis could be ob served as the participants mentioned the creation of a contingency plan after the crisis, in order to pre pare the organization for future crises. This means that the organization is trying to learn from the crisis
future problems.
This paper focused in the response stage because the majority of crisis leadership tasks were related to this crisis management phase. As the studied cri sis developed, a number of constraints appeared
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to them. These unfolding circumstances were pre sented to the leaders as challenges to act upon. After
In this way, the crisis leadership tasks assumed by the leaders were realized in order to address these
d. Crisis leadership
All the crisis leadership tasks presented by Boin et al. (2005) were present in this study. Sensemaking processes were necessary to understand the causes and the consequences of the electricitydistribution cables. In this occasion, leaders and employees that were together in the rupture point, after the trigger ing event, grasped the crisis as it unfolded. The sen semaking task took place at the same time that the decisions were being made. These two tasks, sense making and decision making, took place together
discussed the possible reactions to the crisis events, creating the decisions in an emergent manner. After deciding what to do, the meaning making task took place and the crisis explanations were distributed to internal and external stakeholders by the communi cation channels still available. Finally, when the crisis constraints were controlled and the organizational ordinary state was back, the terminating task ended
and gave place to the learning task, when the organi zation started to make a contingency plan based on the lessons learned with the crisis.
Besides, it is important to comment that the follow
ing the crisis, as the employees were more likely to acquiesce to their leaders and agreed to keep work ing for long periods. These results are in accordance with Halverson et al. (2004), whose work discussed that followers are more likely to acquiesce to their leaders under stress and are more receptive to in formation provided under stress. For this reason, it was not necessary to develop any kind of motiva
motions or others. According to the managers inter viewed, solving the crisis and restoring the energy delivery was a question of honour for the company and its employees. In this way, they kept motivated all the time, in order to restore the normality for the citizens as soon as possible. This fact demonstrates that the meaning making task was successful.
– sensemaking, decision making, meaning making, terminating and learning – were developed to ad
in the crisis response – crisis constraints, organiza tional structure, cognitive factors, development of solutions and motivation mechanisms – as summa rized in Table 1.
Table 1 – The crisis leadership tasks through the crisis response’s leadership challenges.
e. Responding the crisis constraints
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Beyond the lack of electricity problem, the crisis brought a lot of constraints that the leaders had to respond immediately. The main problem, allied to these constraints, forced the leaders to practice all
constraint. In this way, for each separate problem, the leaders had to understand what was going on, decide what to do, convey the internal and exter nal stakeholders that it was the correct decision, act upon the problem and learn with it for the future. The leadership tasks related to the response to the crisis constraints took place during the critical pe riod stage and the chronic crisis stage.
f. Adapting the organizational structure
The crisis leadership tasks related to the organi zational structure were only two, decision making
by the leaders was to randomly select some em ployees, forming a technical group to deal with the crisis. This decision divided the organizational structure for decision making in two: an informal structure for strategic decisions related to the cri sis and a formal one to deal with operational deci sions related to the construction of a new trans mission line. The leadership tasks related to the organizational structure took place only during the critical period.
g. Dealing with cognitive factors
Dealing with cognitive factors was at the heart
the crisis – sensemaking – and propagating this meaning through all the stakeholders – meaning making – were not easy tasks. It is interesting to remember that these two crisis leadership tasks
subject was the new supply channel as a whole, the priorities were established by the board of di rectors and the social coalition formed near the lo cale of the cable rupture. On the other hand, when
being constructed, the sense giving was conduct
with cognitive factors took place during the criti cal period and the chronic crisis stage.
h. Creating and developing solutions
The decision making task was always in the cen tre of the crisis response stage. Unfortunately, the company was not prepared for the crisis and it had not any kind of crisis management plans. Because of that, the decisions were taken so far as the sen semaking processes were developed. This is true for the major crisis, the lack of energy, and for the numerous crisis constraints that unfolded with the crisis. In this way, the vast majority of decisions and
To address this leadership challenge, it was used the decision making task during the critical period and the chronic crisis stage. After the solution of the con straints, the leaders tried to learn with them in order to avoid similar problems in the future.
i. Developing motivation mechanisms
To address this leadership challenge, the leaders used two crisis leadership tasks: meaning mak ing and terminating. By communicating the crisis
ulate a culture where restoring the energy delivery was a question of honour for the company and its employees. For each constraint that was resolved, the employees had become more united to resolve the other problems. So, disseminating the correct
constraints were enough to keep the employees mo tivated, in spite of the long work journeys, without being necessary to create other motivation mecha
6. FINAL CONSIDERATIONS
This paper analyzes an organizational crisis in the Brazilian Electrical Sector, focusing on the lead ership challenges during the crisis response and identifying the mechanisms used to mobilize peo ple and respond to the crisis. As a result, it was pos sible to identify that, prior the studied crisis, the company had not any kind of crisis management preoccupation. Then, the crisis got the organiza tion unprepared. Happily, the company responded successfully to the crisis, although in an improper manner. So, the importance of being prepared to an organizational crisis was demonstrated. Besides, it was documented the leadership challenges brought
oped to analyze the crisis leadership tasks during the crisis response.
Unfortunately, the occurrence of crisis leadership
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tasks during the crisis prevention stage could not be observed, as the organization had no signal de tection mechanisms to identify and avoid possible crises. In this way, the precrisis stage was not anal ysed. On the other hand, the critical period and the chronic crisis stage were observed and it was pos sible to analyse the crisis management’s response stage as a whole, focusing the leadership challenges presented by the crisis, such as the crisis leadership tasks used by the leaders to respond to the crisis and lead the organization back to its ordinary state. So,
sented by Boin et al. (2005) – sense making, decision making, meaning making, terminating and learning – to address the challenges brought with the crisis.
ent crisis leadership tasks, as summarized in table 1.
This study brings important theoretical contribu tions, as it corroborates with previous research on crisis management and crisis leadership, such as
and Hale et al. (2005), showing that: (1) key decisions were made by a small, tightly knit group of individu als; (2) all stakeholders, internal and external, became involved; (3) the communication’s channels options reduced immediately after the precipitating event; (4) the relationship between leader and followers has changed, as followers were more likely to acquiesce to their leaders under stress and were more receptive to information provided under stress; (5) the leaders
sis after the critical period. Besides, it illustrates the leadership processes that were undertaken in order to respond to an organizational crisis.
On a practical basis, it was important to present a descriptive case study, which showed real prob lems, faced by an organization during the response of a huge crisis. The main categories that emerged from data are important to help other companies to plan crisis management systems and procedures. However, it is important to say that this study was restricted to observe one crisis episode. As a sugges tion for future research, other crisis events can be studied in order to validate these contributions and observe if the main categories of this research will also be present.
Finally, it was possible to observe practically the paradoxical nature of crisis (Nathan, 2000), as there were positive and negative outcomes to the stud
ied event. In one hand, the negative aspects of the crisis were present because of the lack of energy in the whole town and with all the constraints brought with the crisis and already discussed in this paper. On the other hand, a very positive outcome was achieved, as the employees became more united and friendly to each other after the crisis. This fact dem onstrates that a crisis can have positive outcomes if the organizational leaders use the correct leadership tasks during the crisis response. In this way, facing a crisis situation may not be so bad if the organization is well prepared.
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