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= Literature =
= Literature =
[[Environmental uncertainty, foresight and strategic decision making]]
[[Environmental uncertainty, foresight and strategic decision making]]<br />
[[Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success]]
[[Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success]]

Revision as of 09:36, 8 June 2012

Introduction to the subject

How can enterprises use information to be prepared when a crisis comes?
Now-a-days enterprises are gifted with powerful technology, however, they are also damned with a fast-pace constant changing market. The whole market evolution and product cycle are faster, new technologies overcome old technologies almost in a monthly basis. It is very hard for a company to keep on the top of the edge, without falling into disaster.

Companies need then, to be able to understand the market, learn it and - most importantly - react to it. The extra mile on the path to organizational success might reside in the information we get from the market every moment of the day, the enterprise internal and external information, and in the analysis put on both of the information together.

If enterprises are able to capture the small changes that take place every day, record minimal evolutions in the market, and notice the competition moves, they could be always one step ahead of any crisis.

Our group is interested in analyzing how can enterprises be better prepared when a crisis comes, through the use information?


The Institute for Crisis Management defines crisis as:

A significant business disruption that stimulates extensive news media coverage. The resulting public scrutiny will affect the organization’s normal operations and also could have a political, legal, financial and governmental impact on its business.[1]

There are two types of Crisis. Sudden Crisis and Smoldering Crisis.

Sudden Crisis

Sudden Crisis are circumstances that occur without warning and beyond an institution’s control, usually the company is not to blame for this. This type of crisis is impossible to predict, the variables affecting it are out of scope, and modeling it is simply too complex.

Smoldering Crisis

Sudden vs Smoldering Crisis and the Crisis Origins over the last years.

Smoldering Crisis are “events that start out as small, internal problems within a firm, become public to stakeholders, and, over time, escalate to crisis status as a result of inattention by management." [James and Wooten, “ [2] This type of crisis is possible to predict/anticipate, the variables affecting it are manageable although it is still very complicated. As shown in the graphs with data from The Institute for Crisis Management [3], smoldering crisis are a huge threat for organizations. Normally, organizations have contingency plans, crisis management plans and/or other mechanisms to prevent organizational collapse during and after a crisis. Before a crisis starts to happen is almost impossible to predict it. However, it is possible to identify the crisis in a very early stage, being easy to mitigate the threat. This is the goal of our presentation.

Smoldering crisis classification [4]

Level 1 Level 2 Level 3 Level 4
Description An internal business problem or disruption that can be dealt with and resolved by management responsible for responding to this kind of situation. An internal problem that can be managed by those who are responsible for this area of business, with support from other management or employees who may have to be brought in to assess the situation and help resolve it. An internal problem that has the potential of going “public” via the news media and generating negative reactions from government officials, plaintiff’s attorneys, competitors, investors consumer activists, labor unions, etc. The crisis can still be contained but will require specialized assistance beyond the management capabilities in place to deal with normal business problems. This assistance may be from corporate headquarters, outside legal counsel, and/or consultants who specialize in resolving this kind of problem. The situation is very serious and is likely to be disclosed publicly in the very near future. The public reaction will have a significant adverse impact on the business for a period of weeks or months and top management along with numerous employees and outside consultants will have be diverted from their normal activities to resolve this situation. The financial impact will be substantial and will have a direct and indirect effect on operating results.
Example Employees of an organization are upset with bad work conditions. They talk with their boss to find a solution for this problem. Employees decided to boycott their work temporarily until their problem is solved. Their boss and other higher management discuss the problem with them. Employees decide to stand in demonstration to achieve what they asked for. They also decide to send a letter to their syndicate to find a resolution for their problems. Employees are resisted and don’t have the chance to manifest dissatisfaction. However, they decided manifest. There’s high friction between them and the management, it draws the attention of media which makes the whole story public. Sales go down.

Using Data for Prediction and Monitoring

The world around us is full of data and the amount of data is increasing steadily. This development is due to

  • an increase in (decentralized) data sources,
  • digital trace we leave,
  • increasing rates of data generation, and
  • increasing interconnectedness and data exchange

By systematically collecting data, managing, analyzing and interpreting it, organizations can gain knowledge about themselves and their environment, and might forecast internal as well as external processes and developments. This can help organizations to increase performance, and to predict and manage crisis situations. This section provides information on how data can be used intelligently within organizations.

Data Mining

Data Mining is the general process behind the analysis of data for organizational purposes. Data Mining stands for finding and interpreting relevant patterns in data. Information concerning Data Mining and Data warehousing can be found here: Data Mining

Business Intelligence

When organizational data is used to monitor and improve internal operations as well as the communication with, and management of customer one also speaks about Business Intelligence. See the following page for more information on Business Intelligence

Data Mining and Socio-Economic Crisis

We argue that Data Mining can be used for predicting and managing organizational crisis. All organizations are complex systems themselves, but they also operate in even more and highly interconnected non-linear systems. This pages elaborates on the nature of socio-economic crisis and how data mining can be of use in predicting as well as managing such cries. See the following link: Data Mining and Socio-Economic Crisis

Organizational Environment

As mentioned before, every organization operates within other socio-economic systems. These form the organizational environment. Information related to the organizational environment can be found on the following page: Organizational environment

Sorts of Data and its Sources

Everything related to the different kinds of data and their origin can be found by clicking to the following page: Sorts of data and its sources

From Data to Knowledge & Action

Can data help us take more intelligent decisions? The answer is no. To take better decisions one needs to discover and understand the underlying patterns from these data. Data mining can provide the answers to all kid of organization-related question. Data mining can help organizations to have useful insights into its business from the data it has collected over the years and take better decisions to achieve new heights. But in order to come from data to Action, one needs to follow various steps of analysis and sense making.

See the following page for information on the process from deriving Knowledge and Action from Data: From Data to Knowledge & Action

Data Analysis

Information on the different kinds of statistical methods used in data mining can be found on the following page: Data Analysis

Strategic Management Schools & Prediction

To what degree should organizations use the environment as input for corporate decisions? See the following page for more information on this topic: Strategic management schools

Assembly: Is a crisis predictable?

See the following link: Assembly


If you want to read more articles whether a crisis can be predicted or not, follow the discussion page by clicking Discussion

Are Crises Predictable?

Article about the predictability of the European Financial Crisis

Examples, Lessons and Curiosities

Crisis related examples can be found in the page Crisis: Examples, Lessons and Curiosities.

Case Study

The overview of our case study, the questionnaire and other info can be found at Case study Group 6.

Group and Work Plan overview

Our group is formed by the following students:

Details about our work plan evolution can be found in Group 6 Work Plan page.


The handouts for the IMOC Group 6 presentation on "Predicting a Crisis" are available here:


  1. Institute for Crisis Management - Crisis Definition, http://www.crisisexperts.com/crisisdef_main.htm
  2. Leadership as (Un)usual (2007) [142–143]. Leadership Review, Kravis Leadership Institute, Claremont McKenna College, Vol. 7
  3. http://www.crisisexperts.com/04report.htm
  4. Institute for Crisis Management - Crisis Definition, http://www.crisisexperts.com/crisisdef_main.htm


Environmental uncertainty, foresight and strategic decision making
Sales, Marketing, and Research-and-Development Cooperation Across New Product Development Stages: Implications for Success