The Importance Of Resilience In Business Organisations

This report is to critically analyse the dynamics that contributes to how resilient organizations remain resilient during disruptive times. The first part of this report will define and explain the conceptualization of organizational resilience whereas the second part will focus on providing critical discussions of the features of resilient organizations. According to the BSI group, Organizational Resilience is defined as “the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper.” (Bsigroup.com, 2019).

In this ever-changing world, things change fast and so do workers in various sectors and requires internal changes to cope with external changes and demand. These internal changes therefore represent only part of the challenge as external changes are increasingly felt by employees who now have more responsibilities dealing directly with the outside world (Dess & Picken,2000). As workers become more energized, more independent decisions are often made considering the pressure of the times (Mallak,1998).

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MAIN BODY

The conceptualisation of organizational resilience has been applied in different fields to mean different things but in management science has been applied to mean the adaptability and responsiveness of an organization to shock and unforeseen circumstances (Pęciłło, 2016). According to Barasa et al 2018, there are two dimensions of resilience; planned resilience, and adaptive resilience. Organizations show planned resilience when they employ pre-existing plans to avoid or minimize an impact of a crisis. These include business continuity and risk management plans that outline pre-disaster activities required to keep organizations running during and after a period of disruptions such as natural (earthquakes, floods, disease outbreaks) and man-made disasters (terrorist attacks, fires) (Barasa et al., 2018). According to Longstaff, et al, 2010, Adaptive resilience on the other hand occurs during the post-disaster (natural and/or man-made) period as new functions are developed by organizations in order to respond to emergent situations. It was further asserted that while planned resilience is important, adaptive resilience is more important since it is more feasible and efficient in looking at uncertainty in the future (Carlson et al., 2012)

On the issue of conceptualization of this model, there have been several other views on this matter. According to Denyer, 2017, Organizational Resilience has been studied for the past 40 years and have been put into five distinct phases with five contrasting viewpoints. The five viewpoints are preventative control, mindful action, performance optimization, adaptive innovation and paradoxical thinking. The two perspective which are the preventative control and adaptive innovation action are conceptually similar to the planned and the adaptive resilience models (Beermann, 2011). These models are put into a quadrant that are split between defensive behaviours (stopping bad things from happening) and progressive (making good things happen), as well as between behaviours that are reliable and those that are flexible (Mullins, 2007).

Some features of a resilient organization will be discussed to see how such organizations are able to cope with changing needs both internally and externally. One feature of resilient organizations is an access to external resources (resources other than ones that are immediately available for use) in the conduct of one’s work. Such external resources include but not limited to financial resources, information, emotional support, advice, practical help etc. If these external resources are needed in problem solving, not only does the adequacy and availability influence primary and secondary appraisal but it reinforces coping behaviours. The classic example of this resilience principle in action is Ritz-Carlton Hotels. Each employee, from housekeeping staff to CEO, has the discretion to spend up to $2,000 (each time) to ensure the guest has a quality stay at their hotel. This can mean bringing tea to a guest with a cold or sending a tie left behind to the guest’s next destination, all without seeking approval. (Mallak,1998).

One of the most important features of resilient organizations is the ability to expand the boundaries of decision making not only for top management executives but also employees too as this brings along element of empowerment, ability to take initiatives in preventing and dealing with problems that may arise (Lengnick et al, 2002). This principle works together with ensure adequate external resources. Resilient individuals need the ability and authority to make decisions on the spot in a variety of situations. (Lengnick-Hall et al, 2011). However, the difficulty of this feature was how inconsistency in terms of the application of certain decisions and the problems this can bring but this is another feature that makes organizations resilient in difficult times as many decisions referred up to the management chain merely serve to reduce service to the customer, frustrate employees, and needlessly occupy management time that could be spent on issues more relevant to their level of responsibility (Mallak, 1998). For example, at Virgin Atlantic, senior executives work in a corner of an open-plan office on the second floor. Thoughts of associates are welcome and of vital importance, there is a no-blame culture. In quoting the head of internal audit who happened to have been on secondment, “There is an executive team who do not really have egos. They are happy for you to go and have an honest conversation with them.” As a result, vital risk and security information travels around the company and the board make well-informed decisions (The Mackenzie Institute, 2019).

One other factor that contributes to resilient organizations is for organizations to develop tolerance towards uncertainty. According to Jay Galbraith’s concept of uncertainty is a case where the amount of information an organization needs is greater than the information it holds. (Tushman & Nadler, 1978). This gap in information available to people to make informed decisions about their work poses a frustration whenever they want to make good decisions as they do not have the bigger picture and the strategic importance of the information (Mallark, 1998). The open-book management practice was to reduce these uncertainties in making information available to workers for them to make certain decision in periods of uncertainty and risk of business decline. This was to help workers reduce indecision by making financial and product information available to all employees. However, in times of decision making, there is a fixed amount of information available regardless of what interventions are put in place (Singh et al., 2012). Resilient organizations can build capacity to make good decisions under these conditions, there stand a higher chance of surviving disruptive times as compared to organizations that do not bridge the gap between the information needed and the information provided (Weick & Sutcliffe, 2011). For instance, JP Morgan Chase & Co, a successful global bank, has applied a ‘Global Resiliency’ program designed to provide resiliency aligned to its business strategy and principles. It does this by engaging senior management on all aspects of the program, including determining the resiliency risk appetite, strategy, leadership (The Mackenzie Institute, 2019).

CONCLUSION

To conclude, for organizations to be dynamic and resilient during disruptive times, such organizations are mainly dependent on some of the factors that have been discussed in this essay. The concept of resilience in organizations have been explained to be able to understand how that can be taken into account before, during and after disruption in any business. Although Planned resilience is important, Adaptive resilience is more important since it is more viable and effective in looking at unforeseen circumstance. For businesses to be resilient, it should be able to cope with changes both internally and externally, the boundaries of decision making should be expanded to go beyond just management to include the general team for some decisions to be made during difficult times of any business life. Information provision should also be structured in a way whereby workers do not lack information on certain issues to not be able to act upon it during challenging times.

REFERENCE

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