CRISIS MANAGEMENT IN ECONOMIC BOTTOM THROAT

“Concordat” is a terminology that we have been hearing a lot in the news lately. It was called “Postponement of Bankruptcy” before the pandemic or “Chapter 11” in the West. The legal legislation that is the basis of these terms is the Enforcement and Bankruptcy Law No. 2004. “Enforcement” and “Bankruptcy” are two terrifying words that none of us would want to encounter in our lives and that make people uneasy. Enforcement and bankruptcy are not outcomes that can happen in one day, but the final result of a process that progresses by giving its signals. The negative outcome in question is the final point of an unpleasant path that develops over a certain period of time and contains dynamics that are completely different from normal functioning. For this reason, such situations are called developments that necessitate Crisis Management in the literature . As in many subjects, Crisis Management has two different faces, the theoretical part explained in books and the practical part that is not explained in theory and occurs in real situations. In this article, I will tell you about the theoretical part of Crisis Management in the literature. In the second article of the series, I will explain the practical part of the subject from my past personal experience. I hope it will shed some light to professionals and business people who have to face many problems every day in a deteriorated economic structure.

CRISIS MANAGEMENT IN LITERATURE 

There is no consensus on the definition of the concept of crisis in management literature. For this reason, researchers working on the subject make different definitions of crisis. One researcher defines a crisis as a situation that potentially threatens the existence of the organization it affects (Reilly, 1987:80). According to Brewton, if a situation causes serious disruption in activities, an increase in the regulations carried out by the state in the institutional field, a negative perception about the company in the public, financial difficulties, inefficient use of management time, and a weakening of employee morale and support, it can be described as a crisis (Brewton, 1987:10). Shrivastava and Mitroff accept that the crisis that occurs in businesses threatens the most important goals of a business, which are to continue its commercial life and profitability (Shrivastava and Mitroff, 1987:6). *

In order to speak of a crisis situation, the situation in question must threaten one or more of the organization’s important goals, allow for a short decision period before undergoing significant transformation, and emerge as a surprise (KeownMcMullan, 1997:4). According to another definition, a crisis is a tense situation that threatens the high-level goals of an organization, sometimes endangers the organization’s life, and requires an urgent response; and where the organization’s crisis prediction and prevention mechanisms are inadequate (Can, 1997:312). *

There are many factors that cause incompatibility between the organization and its environment, in other words, a crisis. These factors can be considered under two headings: external environmental factors and internal environmental factors. (Ataman, 2002:243). Among the external environmental factors that cause a crisis;

• sociocultural environmental changes,
• changes in the political and legal environment,
• changes in the technological environment,
• changes in competitive conditions and natural disasters

On the other hand, among the internal environmental factors;

• the size of the enterprise,
• the life stage of the business,
• characteristics of the job,
• inadequate communication, coordination and control,
• rigid organizational structure,
• the degree of centralization of the organization,
• inadequacy of management

There are topics such as. *

Crisis management has its own characteristics. Some of these characteristics are as follows:

(Hasit, 2000:65):*

• Crisis management primarily aims to create businesses that can foresee crises, distinguish their types, take the necessary precautions accordingly, learn new things from them and recover as quickly as possible.
• Preventing crises varies depending on how managers perceive crises. When managers perceive crises as threats, the probability of success in preventing crises increases.
• Crisis management is a practice that has no beginning or end and requires continuity.
• Crisis management is created according to the type of crisis. Since each type of crisis has its own signs and solutions, crisis management is shaped according to the types of crisis.
• Achieving success in crisis management will increase managers’ self-confidence and boost their morale.
• Since crisis management is an important, necessary, difficult, complex and time-consuming process, it requires being flexible, creative, objective, aggressive, courageous, fond of group work, ready for action, open to innovation, and ready for the unknown or unwanted in unexpected situations.
• Factors such as communication, regulation, control, cost, culture, contingency, planning, complexity and interconnectedness of systems are important in crisis management.
• Crisis management requires certain skills and a certain level of tolerance.
• Since crises also threaten strategic goals, crisis management is included in the scope of strategic management.
• The crisis management team should be trained both physically and mentally.

* Murat, Prof. Dr. Güven and Kamuran Mısırlı, (2005); “Crisis Management in Small and Medium-Sized Enterprises: Çaycuma Example”, ZKU Journal of Social Sciences, Volume 1, Issue 1, pp. 3-4, 6-7.