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NN, Peter Bouwdewijn

A crisis is described by a number of key aspects. See also: From Crisis Prone to Crisis Prepared: A Framework for Crisis Management

  • High magnitude
  • Require immediate attention
  • Element of surprise
  • Need to take action
  • Out of a company's direct control

The element of surprise is important in relation to prediction. If something is predictable it means that there is no element of surprise. The question leading from this: can you predict a crisis? It sounds contrary since a crisis is a situation that is unexpected. Black swans are even more unpredictable since they are sudden and unexpected. Greater element of surprise. What we possibly can predict is certain future changes in an environment that might, if no action is taken might evolve into a crisis (smoldering). These crisis situations are predictable, we understand the environment and the variables to a degree to which we can say things about possible future happenings. These situations are not 'black swans' a 'black swan' is something that cant be foreseen with the understanding of the environment variables. The degree to which we can predict future events in an environment depends on the properties of an environment. White swans are situations that we can see coming, based on previous experiences and out understanding of the environment. A black swan goes against our understanding of the environment therefore impossible to predict. There are off-course all the situations in between. Changes in the environment that are suspicious but we dont know what the effect will be, we still might be able to act in order to try to stabilize the environment. The more knowledge we get about our environment and the relations beween cause and effect leads to a better understanding. The information available to companies through for example the internet could prove a huge addition to a company's environment understanding. Any type of forecasting could help, like with weather forecasting helps us decide whether to take an extra sweater or not.

The environment a company operates in dictates which management school principles might work. The more uncertain an environment the more the adaptive school will prevail, since the future is uncertain, the environment to complex and uncertain to understand. Adaptive school lends to a mode of monitoring and reacting effectively on important changes in the environment. An environment that is more stable, more linear with less unexpected events over time lends itself for prediction based on the understanding of variables in the environment. In these environments planning school could be useful to plan strategically decisions. Transformative and Control are relatively the same as Adaptive and Transformative although their theory underlines the importance a company has on the environment variables.

The level of prediction and the management mode are dependent on the environment a company operates in. Understanding and collecting important environment variables is important for any management mode whether used for prediction or for decisions. Adaptive approches are more likely to gain popularity because of the increase of complexity and non linearity in environments. Globalization, trends towards more efficiency and increased integration however lead to a more complex world.

Extra information on prediction efforts from big datasets:

Article about the European financial crisis can be read from:

Another interesting article about whether we could have predicted the Global economic crisis, can be found here:


NN, Peter Bouwdewijn