Page 322 - Managing Change in Organizations

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The management of crisis and turnaround
6 Expansion internationally: as growth slows down in traditional markets, it is
necessary to expand internationally, sometimes into politically risky areas.
7 Personal negotiation: the restructuring and rationalization that is taking place
demands political skills of a high order and the ability to negotiate with
employee representatives, with pressure groups and with government bodies
both at home and abroad.
8 Innovation and risk taking: there is a recognition that firms must adopt and
develop the new technologies or ‘go under’ – introducing new products and
processes and pioneering new businesses. With the above this also forms part
of the management of turnaround.
The key problem is to manage the contraction of traditional activities while at
the same time expanding new activities. This must be achieved quickly and with
limited resources, often under significant pressure from curious, demotivated
staff and problems with the media. Turnaround strategies often include the fol-
lowing:

■ Mergers and cooperative supply, design or manufacturing/assembly agree-
ments.
■ Sales of assets.
■ Programmes aimed at reducing overheads.
■ Improved systems of cost and budgetary control.
■ Value-for-money programmes.
■ Productivity improvement programmes including closing old-fashioned plant,
concentrating on few facilities, automation, quality improvement and new
technology.
■ Developing new corporate strategies.
While ‘turnaround’ is often discussed in connection with private sector compa-
nies, it is worth noting that similar pressures have been faced in the public sec-
tor. Strategies for change in the public sector may include the following:

■ New systems of management (e.g. the introduction of general management in
the health service in the UK).
■ New strategies and approaches (e.g. the development of commercialization
programmes and marketing in higher education).
■ New systems for human resource development (e.g. appraisal systems in edu-
cation).
■ Rationalization, simplification, automation and reorganization (across organi-
zations, both public and private).
From what I have said so far it is clear that crisis situations are likely to have had
a long and identifiable history, with clear signals of decline along the way. It is
also clear that decisive action is needed and that turnaround strategies include a
characteristic range of techniques, systems and approaches. Does the time and
resources pressure created by crisis mean that the ‘role model’ for facilitative
management is not relevant?

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