Crisis Responses of Competing Versus Non-Competing Organizations

The purpose of the paper is to identify responses of organizations undergoing crisis when they are subjected to either much competition or little competition. In this paper, the literature on organizational crises and responses to them is surveyed to identify main organizational responses to crises and to differentiate the responses to internal crises such as induced by sharp intra organizational conflicts, mismanagement, or non cooperation of personnel, versus responses to externally induced crises such as arising from a credit squeeze, or non availability of crucial raw materials, or shifts in government policy or legislation that gravely hurt the organization. The literature on organizational responses to competition is surveyed to identify the principal responses to a competitive environment. Based on the identification of responses to external crises, internal crises, and competition, a series of hypotheses incorporating a large number of predicted organizational responses are developed. These are then tested by recourse to data gathered from the senior managements of 165 North American companies. Finally the implications of the findings are discussed.