How Organizations Deal With Wars, Famines, and Pandemics
Crises may not be part of the everyday life of organizations but they occur again and again. Suddenly, sales markets collapse because a product is no longer in demand, causing cash flow problems. A group of essential employees leaves a research institute together, creating a huge gap in expertise. A legal ruling prohibiting a prestigious transport project raises questions not only about the competence of the responsible minister but also about the quality of his ministry as a whole.
In some cases, such crises can be dealt with, but in others the circumstances can even lead to the failure of an organization. In modern society, such failures are the norm. Businesses come and go; research institutes are founded and disbanded; ministries are formed and, if necessary, transformed again. For the employees the disappearance of an organization may be a decisive moment, but for society at large the consequences are minimal. Another organization fills its place.
The situation is different when it is not an individual organization that enters into a crisis but a state – or even a whole society. We need only think of civil war, famine, or a pandemic, where it is not a case of an individual organization experiencing a crisis but more or less all organizations facing an emergency together.
As far as organizations are concerned, three thematic areas are of particular interest in relation to such scenarios. First, crises reveal how strongly organizations have been streamlined and how much of a buffer they have left. Here, the story is always the same: in normal times, the hour of the rationalizers has come. Buffers – the slack within organizations – are continually reduced, and organizations are streamlined in the interests of efficiency. In times of crisis, the cost of these rationalization processes becomes visible. The necessary interim storage space for the fast delivery of spare parts is lacking; there are not enough hospital beds; and the necessary personnel to ensure civil peace are thin on the ground. Once the crisis hits, there are frantic attempts at mitigating the consequences of the absence of a buffer, and additional resources are mobilized without regard for cost. Once the difficult times are over, you can bet that think tanks and expert consultancy firms will soon be loudly making the case for reducing capacity in businesses, hospitals, and public administrations.
Second, crises reveal how tightly processes are linked together. A factory ceasing to operate in a region hit by crisis often causes problems not so much because its products are needed in that region but because it produces a part that plays an important role in a tightly connected global production process. Scenes of parts being delivered by helicopter in order to avoid car production coming to a standstill after catastrophic flooding are a concrete illustration of the principle. In times of crisis, looser coupling is often advantageous because it allows an organization to continue working even if many other organizations break down.
Third, crises frequently reignite discussions about what levels of centralization and decentralization are useful. Of course, during a crisis there are immediate calls for more centralization, because this allows for the faster and more comprehensive implementation of measures. Yet it is also frequently emphasized that the authority for decentralized decision-making enables a way of proceeding that is more closely adapted to local conditions. The more developed a crisis, however, the clearer it becomes that the question of centralized or decentralized decision-making does not make as big a difference as had been assumed. If a state closes its borders, others will follow suit before too long. If one federal state closes universities and schools, it will shortly be followed by others. We do not know whether these decisions are right or wrong. But in times of great uncertainty, we do not usually take our bearings from our own evaluation of the situation; we follow what everyone else is doing – just to be on the safe side.
The crucial question in times of social crisis is that of whether organizations are able to maintain their capacity to function. The reason for this is that organizations are the central institutions for guaranteeing that segments of society are able to function. The economy does not function without businesses; politics cannot do without administrations, the police, and the military; the law needs courts; science and scholarship depend on universities; education requires schools, and medicine hospitals.
During a social emergency, it soon becomes clear which organizations are essential and which we can do without for quite some time. Businesses can go belly up, but that is socially irrelevant as long as it does not trigger a whole series of bankruptcies that seriously undermines economic activity. Whether a university closes for two or three months and ceases to hold conferences does not matter, except for the few areas of research which are immediately relevant to solving the crisis. In some areas, being forced to have less contact with others will presumably even be helpful, because it enables a more focused mode of working. Whether pupils lose two or three months of learning is irrelevant to the corpus of knowledge they will have acquired at the end of their schooling. What is revealed during times of crisis is rather that schools serve a function that is usually not much talked about – looking after kids so that parents can go to work.
You do not need to be a scholar of organization studies to identify those organizations that are considered essential for coping with a crisis. The political authorities very quickly provide them with the resources which they had sought in vain for many years, and they are given the personnel necessary to secure their functioning. Which organizations belong in this group depends on the type of crisis. But in most cases, the police, military, hospitals, and those businesses essential to the supply of food are among them. At the end of the day, these are the organizations that prevent a dedifferentiation of society into clans and tribes which merely fight for their own survival.
