The paper provides evidence-based managerial advice for preparing the organizations to find successful pathways through crises by priming the managerial decision-making towards either entrepreneurial thinking or resource conservation, and hence cascading the inventive or rigid state of mind through all management levels.
The general review is based on summarizing the peer-reviewed academic studies of organizational decision-making and acting in crisis situations, illustrated using the turnaround cases of Corticeira Amorim (reinventing itself when faced with emerging technological threats) and Kiddiegarten School (adjusting to the pandemic shock of social/human nature)
This study reveals that a set of dimensions in the crisis situation’s cognitive framing determines the firm’s response to adversity, freezing it in a rigid state or unfreezing it to stimulate an organization-wide entrepreneurial search for turnaround strategies. If managers sense having a lack of time to deal with adversity, or a lack of predictability, they become paralyzed with threat-rigidity mechanisms, stubbornly pursuing the established methods of doing business, which often were the cause of crisis in the first place. Hence, in situations requiring an immediate response, the dual threats of urgency and unpredictability become cognitive blinders, preventing organizations from pursuing new opportunities, exposing firms to the risk of being too slow, eroding their competitive advantage and, ultimately, going out of business.
Integrating the insights of three decades prior research of the topic of managerial decision making in crisis situations, this study proposes the novel leadership framework allowing to stimulate entrepreneurial behavior in adverse contexts.
