Companies the world over rely on strong leadership and business practices to avoid negative situations, but sometimes external factors can result in a crisis which cannot be avoided. It is why companies should be prepared to meet crises head on and why, in recent years, scholars and business professionals have discussed the relevance and validity of weaving crisis management into MBA programs.
Crisis is defined as an unexpected emergency situation which causes unrest and instability within a business. It could include technological failure and breakdown of machines, boycott and strikes, digital and physical terrorism, natural disasters and economic turmoil; from a loss of internet connection to the Global Financial Crisis and everything between.
The value of Crisis Management
Crisis management prepares business professionals to face unexpected developments and adverse conditions in the organisation with courage and determination. It can help towards teaching employees how to adjust well to sudden changes, and to understand and analyse the causes of crisis and cope with it in the best possible way.
Crisis management also gives managers the thinking patterns to devise strategies to come out of uncertain conditions and also decide on the future course of action. With a trained eye for potential crises, managers can also feel the early signs and take the necessary precautions to ensure the business and its employees weather the potential storm with minimal impact.
Crisis Management today
No matter the crisis, businesses must be able to meet the challenge head on and have the know-how to successfully circumnavigate uncharted territory to come out the other end without significant damage. It is why there are a number of business schools around the world that incorporate a crisis management element in their MBA programs today. There are also a number of international competitions that exist across the world, where MBA students compete in teams to achieve a resolution in the face of a simulated business crisis.
However, in many schools and parts of the world crisis management is not a mainstream concern for MBAs. According to Rotterdam School of Management Professor of behavioural business ethics David De Cremer, this is because business education and the MBA are associated with the idea of striving for excellence and enhancing one’s strengths.
“Such a philosophy is in line with the typical business school student profile: self-confident and possessing an awareness of the strengths needed to succeed in business,” he said in the Financial Times.
In other words, most business schools tend to encourage leaders to focus more on things like professional development and organisational and employee growth, rather than looking back over their shoulder in case the worst should happen. And while these are qualities that MBA students should certainly develop and build upon, it leaves a potential gap in knowledge regarding how to handle crises and potential failures they may encounter in the future.
Vidotto Group CEO Alison Vidotto, who several years ago penned her thoughts on the subject, said crisis management is not the recommended way to run a business, although there are situations where it is the natural order of the day.
“As a leader, a crisis will test your competency on many levels. How quickly can you adapt and improvise? How well do you reassure your team and steer them in the right direction? How well do your team members respond and adapt?” she said.
It stands to reason that MBA students should not be taught to think that business is nothing more than a bleak landscape where a crisis is always around the corner. However, adequate crisis management knowledge could be a step in softening the blow of the inevitable and creating a more positive future.