Orientation: Crises that threaten an organisation’s continued existence cannot be seen in isolation when considering the perception of threats to individual job security. These threats often go hand in hand with employee panic.

Research purpose: The aim of this study was to establish a model to assist organisations in managing employee emotionality and panic during times of crisis.

Motivation for the study: Environmental crises threaten organisations’ existence, threatening employees’ livelihood and resulting in employee panic. Panic reduces employees’ contributions. Organisations that are successful harness employee contributions at all times.

Research design, approach, and method: A modernist qualitative research methodology was adopted, which included a case study as research strategy, purposive sampling to select 12 research participants, semi-structured interviews for data gathering, focus groups for data verification, and the use of grounded theory for data analysis.

Main findings: An organisation’s ability to manage employee panic depends on the relationship between the foundational elements of authentic leadership, crisis readiness, resilience practices, versatile and committed talent, strategic management, quality management, and coherence actions taken during the crisis, which include crisis leadership, ongoing visible communication, mindfulness, work flexibility, and decisions based on the greatest financial need and social support.

Practical/managerial implications: The study provides a best-practice option for managing emotionality during crises for the case organisation and other organisations within the vehicle components and other manufacturing industries.

Contribution/value-add: The Coherence Hexagons Model is presented as a tool to manage employee panic during crisis.

Introduction

Key focus of the study

‘I couldn’t sleep last night but stayed up talking about what was going to happen’. ‘It is terrible. Death. It’s like a massive earthquake’. A person can be forgiven for thinking that these are lines from a disaster movie. The comments are, in fact, from Lehman Brothers employees Duo Ai and Kirsty McCluskey after the news of the potential collapse of the bank broke (Teather, Orr & Hopkins, 2008, p. 1). These are also the kind of reactions that may become commonplace in the future as the pressure on organisations increases because of higher levels of competition and environmental volatility. Unmanaged, these reactions could spread panic through organisations, which, in turn, could cause their collapse. Modern managers therefore have a duty to find ways of dealing with emotionality and panic.

Background

The metaphor of the ‘perfect storm’ has been proposed to capture the essence of the post-2000 business environment (Dotlich, Cairo & Rhinesmith, 2009). Contributing to the perfect storm environment is the increase in the scale of crises. The simple truth is that modern crises have no respect for national boundaries (Beck, 1992). The interconnected nature of the modern globalised society exposes a variety of systems to what is termed the transboundary crisis (Boin, 2009). Boin (2009) described a transboundary crisis as one with no clear beginning or end that threatens a range of system elements in the absence of clear-cut plans of action to remedy the consequences.

Organisations and their leaders operate within a crisis-driven context, where discontinuity and unpredictability are the norm. The leadership reality is one that is increasingly complex, diverse, and uncertain. The world has become a place where it is impossible for leadership to keep up with an operating environment that is flat, fast, interdependent, and risky (Dotlich et al., 2009). Crises are, in essence, a business reality, inseparable from day-to-day operations (Elsubbaugh, Fildes & Rose, 2004).

Purpose

The motivation for the study was based on the contention that environmental crises will continue to threaten organisations’ existence, posing a threat to employees’ livelihood resulting in panic. Unmanaged employee emotionality and panic have the potential of putting a marginal business over the edge.

It is in light of these issues that the primary research question was: Which organisational elements contribute to or detract from coherence during perceived organisational crises?

The following supporting sub-questions apply: Which emotions do employees display during perceived crises? Which organisational elements contain or fuel employee emotionality and panic during perceived crises?

Trends gleaned from the literature

Framed by a set of circumstances where the environment will vacillate between crises, organisations and their leadership have to carve a market niche to serve a customer base that is increasingly informed and less loyal (Alrubaiee & Al-Nazer, 2010). In order to cope with these potential environmental changes, organisations have embarked upon strategic management. Strategic management is the integration of functions and resources with strategies to maintain alignment with the external environment and ensure future return in competition and stakeholder value (Ehlers & Lazenby, 2010).

Whereas strategic management’s focus is on the offensive aspects of competing in the marketplace, crisis management centres on the defensive capabilities of the company (Penrose, 2000). The aim of crisis management is surviving events threatening an organisation’s existence (Mitroff, Diamond & Murat Alpaslan, 2006), as opposed to the strategic management focus of dealing with opportunities and threats.

The overarching theme of crisis management activities is the use of formal organisational arrangements – systems, structures, and procedures – to secure the continued survival of an organisation during and after a crisis (Elsubbaugh et al., 2004; Massey & Larsen, 2006; Mitroff et al., 2006). The potential shortfalls of the formalised approach to crisis management is highlighted by the definition of a crisis provided by the London School of Economics’ Crisis States Research Centre, which suggests an inability on the part of institutions or organisations to cope with environmental challenges powerful enough to disrupt and even threaten the continued existence of established systems (Porfiriev, 2005).

Threats to established systems that have the potential for creating real panic are those where the logic in the universe is brought into question, because understanding and processes linked to understanding collapse (Weick, 2006). Weick (2006) contended that the elements that hold an organisation together are, in many instances, far more tenuous than managers believe, especially when people are required to fulfil unfamiliar roles in completing ambiguous tasks, in circumstances where key roles are neglected. These kinds of threats have the potential to cause significant psychological suffering (Miller, 2006). This aspect of broader organisational crisis management has largely been neglected in research.

Research design

Research approach

Elliott, Fischer and Rennie (1999) stated that qualitative research aims to understand incidents, encounters, and actions engaged with, and lived through by an individual. The focus of qualitative research is therefore to create an understanding of the phenomenon being investigated, by incorporating the perspectives of the participants (Elliott et al., 1999), that is, elucidating human environments and experiences (Hay, 2005).

A number of factors played a role in opting for a modernist qualitative approach in the present study. These included our need to reflect individual experiences, the ideal of creating accurate theory based on an in-depth literature review, the use of multiple methods and rigorous questioning and analysis, and accounting for a full range of eventualities in a structured manner.

Research strategy

A case study as research strategy was used. Case studies are, first and foremost, descriptive; secondly, they allow for the generation of rich information about people and particular contexts; and, finally, they create opportunities for the emergence of new ideas and hypotheses (Terre Blanche & Durrheim, 2002).

The value of using a single exploratory and intrinsic case study lies in its ability to draw attention to pertinent aspects of human behaviour (Schram, 2006). The value of using an intrinsic case study has to be questioned, especially if one considers its limitations in terms of transferability and in creating theory (Stake, 1995). Silverman (2010), however, countered this opinion by providing the following as guidelines to producing explanations that are transferable: firstly, combining qualitative research with quantitative measures of populations; secondly, following a process of purposive sampling, informed by time and funds; thirdly, using theoretical sampling; and finally, using a model to analyse the case, which shows cross-case transferability.

We followed a single exploratory and intrinsic case study method to examine and describe the reactions of staff to the significant drop in demand for automotive products, with the intention of identifying those organisational realities that impact these reactions.

Research method

Research setting

The case organisation was a privately owned engineering firm that provides components and equipment locally and globally to the automotive, construction, and related industries. We refer to the firm as ‘David’, based on comments from a number of research participants who described the firm as small but tough.

Employees of David live by the motto of ‘Our customers come first’. Managers, employees, and teams alike are held accountable for their performance with continuous improvement. They interact on a first-name basis, from the CEO to the sweeper. This, however, does not suggest a lack of respect. Finally, an open-door policy exists at all the management levels.

The year 2011 posed significant challenges to the continued survival of David, which accurately reflects a crisis-driven environment. The specific events that had caused this included the tsunami that hit Japan in March, the floods in Thailand between March and August, air travel over Europe being disrupted by the eruption of Iceland’s Grimsvotn volcano in May, strike action locally affecting international freight and transport, snowfalls in August causing the road between Gauteng and Durban to be closed, and global shortages of required raw materials such as nylon. The crises David faced had impacts both individually and collectively on its performance.

Entrée and establishing researcher roles

We established initial contact with the managing director of David. Formal permission to commence with the research was granted in writing. Acknowledging and accounting for the influence of the researcher, although important, is not sufficient to ensure quality research. In light of this, we treated the information that the research participants offered with an open mind. We also subjected our own preconceptions to ongoing, intense assessments, and we intermittently discussed key research decisions amongst ourselves and a person previously employed by David, which served as peer debriefing exercises (Terre Blanche & Durrheim, 2002).

Sampling

Although there is no consensus regarding the correct qualitative sample size, the ideal is to strike a balance between a population not too large to prevent the extraction of thick, rich data, yet large enough to allow ‘for data saturation (Flick, 1998; Morse, 1995), theoretical saturation (Strauss & Corbin, 1990), and informational redundancy (Lincoln & Guba, 1985)’, originally stated by Sandelowski in Onwuegbuzie and Leech (2007, p. 242). We decided to select employees who potentially had direct and intimate knowledge of the potential ramifications of the recession. Furthermore, we selected employees across all functional areas, and drew participants from the operations and management structural levels. We took special care to include employees who were involved in consultative processes with management.

Whereas the initial sampling we applied was purposive, we thereafter used theoretical sampling, to allow for groups or categories relevant to the research questions, as well as attempts to explain the data (Silverman, 2010). We also used chain-reference sampling to identify new categories of data, until saturation was reached. Here, one identifies critical cases or informants who are well informed, that is, who have a great deal of information about a phenomenon (Cohen & Crabtree, 2006). We asked the managing director and interviewees to identify individuals who could contribute critically pertinent information.

In light of the above, the research participants indicated in Table 1 were drawn from the three main levels of the organisation’s structure.

Data collection methods

In line with the usage of multiple data collection methods in the modernist tradition, we used interviewing, focus groups, documents, and participant observation.

Face-to-face interviews: Our primary method of data collection was unstructured interviews, utilising an open-ended question format. Also referred to as in-depth, intensive, focused, or ethnographic interviews, this format allows one to obtain detailed information, clarify reasons for behaviour, and uncover the issues behind interviewees’ answers, opinions, feelings, or emotions (Van Rensburg et al., 2009).

We first conducted a pilot interview with one participant. Thereafter, we adjusted the interview guide to ensure that information-rich data could be collected during the interviews. The three main open-ended questions that were posed to the interviewees were:

Focus group interviews: Focus groups are particularly useful for providing qualitative data. The interaction is considered more natural than interviews, as they reflect the real-life influence that people have on one another (Krueger & Casey, 2000). We specifically used focus groups, firstly, to confirm our interpretation of the findings from the interviews and, secondly, to construct deeper meaning from the emerging findings. To ensure anonymity, the different levels of employees were kept apart in the focus groups, and we did not share the original interpretations or words used during the interviews.

Additional data sources: A number of additional sources were used, such as process documents detailing issues like tracking and correcting faults, strategies related to cost saving and efficiency, and time sheets. We were also taken on a tour of the facility. We took particular interest in flowcharts indicating the manufacturing processes, the use of buckets to measure waste at the end of shifts, and the large number – comparatively speaking – of female operators on the production line. We also noted other tours being conducted. David’s management actively promoted information and knowledge sharing with other manufacturers as part of their own skills development. This data were captured as field notes.

Recording of data

When recording data, the following are important considerations: the organisation under study, data entry, data backup, and data safety (Bogdan & Biklen, 2007). All the interviews and focus groups were recorded using two separate digital devices.

Transcribed interviews: Interviews were transcribed. In order to accurately capture the perceptions, emotions, actions, and words of the interviewees and focus group participants, we used field notes to supplement the digital recordings (Hahn, 2008). The field notes and voice recordings were used jointly in finalising the transcripts. We paid specific attention to capturing the full narrative of the recording during the transcription process, making additional annotations to reflect pertinent non-verbal communication such as emotions and facial expressions. Insights recorded during the interviews and focus groups on the written notes were included in the transcripts.

Field notes: Field notes are primarily used to account for the researcher’s experiences in collecting and reflecting on data (Bogdan & Biklen, 2007). We attempted to accurately reflect, through the field notes, from both a descriptive and reflective point of view, the content of both the focus groups and the interviews. We kept these field notes in a transcript file. A personal log was completed directly after each interview or focus group, in order to assess and refine the data collected during the interviews. We also maintained an analytical log to keep track of any ideas that related to theories encountered in literature (Minichiello, Timewell & Alexander, 1995).

Data analysis: We selected the process proposed by Merriam (2009) to complete the data analysis, namely category construction, sorting categories and data, naming the categories, and deciding on the number of categories (Merriam, 2009, pp. 178–193).

The process of constructing categories starts with studying the transcripts, field notes, and any other documentation associated with the interviews. The research question acts as the backdrop against which initial observations are noted. The codes aim to highlight data that may have specific value beyond the mere description of the setting within which the data were obtained (Lowe, 1996). Our open coding involved coding by sentence or paragraph, using interview transcripts. We used the open codes as the first step in constructing categories.

Next, we reviewed the transcripts in order to identify common descriptions, and to group these together. This grouping process can be referred to as axial coding. Strauss and Corbin (1990) explained axial coding as the process whereby data are connected in fresh ways, under created categories or subcategories.

We repeated the process described above with all the sets of interview data, with the aim of identifying patterns and regularities, which became the overarching categories and themes within which items were logically grouped (Merriam, 2009, p. 181). The category itself is an abstraction drawn from the data, and, in essence, takes on a life of its own, separate from the data (Lincoln & Guba, 1985).

Even though naming the categories is largely an inductive process, the reality is that this is guided by the study’s purpose, a researcher’s mindset and current knowledge, and the views of the research participants as interpreted by a researcher. We allocated names to the categories that reflected the detail we saw in the data.

We used Merriam’s (2009) suggested four guidelines for creating comprehensive and descriptive categories. Firstly, the frequency with which something is raised, that is, the number of times an item is mentioned by research participants, guides the development of a category. Secondly, audiences may indicate the categories they consider to be more credible. Thirdly, some categories may, on the basis of their uniqueness, be retained. Finally, some categories may be unique in their ability to provide unique insights into common problems.

Strategies employed to ensure quality data

Sharing, interpreting, and representing other people’s experiences is, at the same time, a great privilege and a responsibility (Stake, 2010). In order to increase understanding of the complex phenomena encountered (Malterud, 2001), we used the four types of triangulation for purposes of credibility, transferability (Lincoln & Guba, 1985) and dependability (Ryan-Nicholls & Will, 2009) in the following ways (Pelser, 2014):

Findings

The period researched – between the tsunami in Japan in March of 2011 and the floods in Thailand in September 2011– and the objectives of the research, guided the questions of the initial interview guide. The coding process progressed from open coding through axial coding, resulting in 21 categories across the four data sets, as illustrated in Table 2.

We combined the categories through the process of selective coding to create the initial story line. Selective coding is the process through which theory is integrated and created (Strauss & Corbin, 1998). Developing theory starts with the generation or clarification of a storyline (Pandit, 1996). The analysed storyline becomes the core category of the theory being developed.

We believed that it was apparent from the sheer volume of responses that was grouped into the ongoing communication category that the core category would include a reference to this process. The second element that we believed needed to be linked to the process of ongoing communication was that of transparency. The central category was described as follows: Ongoing visible communication, trust, and transparency are central to managing employee emotionality during organisational crises.

Grounded theory has as its essence the emergence of theory from raw data. Strauss and Corbin (1990), however, considered it appropriate to use those resources that relate to emerging theory as a way of validating the accuracy of findings.

As the basis of grounded theory is the emergence of theory from research, we opted to conduct the review by theme or construct. Mouton (2009) indicated this option as appropriate for both quantitative and qualitative exploratory studies. The central category we developed via the selective coding process, as well as the categories and themes that emerged from the open- and axial coding processes, i.e. the emergent theory, framed the review. From the data, we developed the Organisational Coherence Hexagons Model (Figure 1).

The first column of Table 3 presents a summary of our first-order constructs, derived empirically; the second column presents the relevant second-order constructs, drawn from literature; and the third column indicates the elements included in the model to account for the first- and second-order constructs.

Discussion

The Coherence Hexagons Model identifies the organisational aspects that have to be in place to manage emotionality and maximise employee contribution during times of crisis. These were expanded on in Table 3.

Why hexagons?

In his writings, Charles Darwin referred to the honeycomb as a masterpiece of engineering, maximising levels of efficiency in terms of labour and wax (Zhang, Duan, Karihaloo & Wang, 2010). Pappus of Alexandria, the 4th-century geometer, suggested that the value of the hexagon lies in the fact that it holds more honey for the same amount of wax used than any other shape (Zhang et al., 2010). In addition to their levels of efficiency, beehives are, by their very nature, also incredibly robust and resilient.

Modern organisations, as do modern employees, have to be efficient, robust, and resilient to survive the crisis-driven environment. The Coherence Hexagons Model identifies the elements required to promote the development of these characteristics.

In addition to suggesting efficiency, robustness, and resilience, the hexagon shape also allows for each of the major elements to be expanded on through the use of additional interconnecting hexagons. The hexagons could be at the centre or form part of an evolving theory.

Interpreting the hexagons

Several elements have to be embedded in an organisation to provide the foundation for managing emotionality and maximising contributions during times of crisis. These elements, although represented as different sides of the hexagon, are interrelated. Leaders are therefore expected to ensure that these sides remain congruent with each other. The sides opposite each other indicate elements that feed into, and off of, each other.

The coherence hexagons’ foundational elements and sub-elements

Authentic leadership makes up the first side, and, because of its importance, is placed at the top of the hexagon. Modern employees expect to have leaders who they can trust, who maintain high levels of ethics, and who are emotionally intelligent. The presence of these qualities will ensure that employees respond positively during times of crisis when leaders deploy specific crisis-related actions.

Crisis readiness makes up the second side of the hexagon. Leaders who adopt a mindset of ‘anything can happen’ are in a better position to remain calm during crises. Calm leaders are essential to ensure calm employees. Crisis planning as the second sub-element of crisis readiness anticipates possible contingencies and provides plans of action to deal with these. These plans promote the perception of leaders being in control.

Resilience practices make up the third side of the hexagon. Organisations with a positive track record of effectively coping with, and rebounding from, previous crises have stories to share of ‘how we have done this before’. These stories serve as a reminder to employees of the potential of the organisation to bounce back. Sharing these stories forms an essential part of managing emotionality. Resilience practices are underpinned by the sub-elements of speed, transparency, and accountability. Speed refers to issues that relate to, amongst others, the turnaround time to recover from previous crises. Transparency refers to the extent to which stakeholders are able to understand the internal workings of the organisation. Accountability refers to the extent to which leaders accept responsibility for their own actions.

Situated opposite to authentic leadership is versatile, committed talent. Along with authentic leadership, versatile committed talent represents the human element of the model. The sub-elements – corporate social responsibility, wellness, talent management, lifelong or wide learning, and multiskilling – each contributes to the presence of versatilists in the organisation. Versatile employees appreciate the importance of employability, as opposed to employment. Versatilists also panic less during crises.

Strategic management and crisis readiness make up the planning component of the model. Strategy formulation, as the first phase of the strategic management process, provides a number of essential factors to guide behaviour during crises, such as the organisation’s vision, mission, and value statements, along with strategies to counteract the impact of crisis events. Developing and creating an appropriate culture and structure to, if necessary, frame crisis management activities form part of the strategy implementation phase. Finally, strategic evaluation and control is essential to verify whether the strategic plan has unfolded as intended, and if necessary to initiate corrective action.

Quality management and resilience practices combine to form the systems element of the model. Quality management and its sub-elements of a quality management system, continuous improvement, and innovation contribute to an organisation’s competitive advantage. During times of crisis, these sub-elements are used to focus employees who are distracted because of stress and emotionality.

The coherence hexagons’ action elements

The success of the coherence actions undertaken as per the central split hexagon depends on the quality of the foundational processes of the coherence hexagons. The elements are split into those that relate to the behaviour of crisis leaders and those that specifically accommodate the needs of employees.

Crisis leadership, as the top of the central hexagon and linked to authentic leadership, relates to those actions undertaken by those in authority to maintain employee contribution. Successful crisis leaders are calm and visible, and take charge of situations as they occur.

Intimately linked with crisis leadership is the need for those in positions of authority to engage in ongoing visible communication. Leaders are expected to remain up to date with events as they unfold, deal with rumours as they spread, and to truthfully communicate actions taken to deal with the crisis as it evolves.

Mindfulness is a practice that allows leaders and followers to focus on the immediate, despite the large number of emotional and other distractions that may compete for attention during times of crisis.

Intimately linked with the presence of versatile committed talent is the need for organisations to be flexible to accommodate and capitalise on these employees and their competencies. Work flexibility refers to the opportunities available to employees to move between sections in the organisation and/or to move to other organisations to make up for income lost as a result of actions like short time or layoffs. This aspect plays a key role in retaining talent in the long run.

Organisational crises, especially those with an economic basis, are often associated with actions such as short time and layoffs. Organisations can manage employee panic by basing their staffing decisions on the principle of greatest financial need. Employees who fall into the category of greatest financial need are often single parents or from single-income families.

Finally, people need to feel that they have someone in their corner during times of crisis. Social support can come in many forms, including prayer groups, counselling or therapy, and team members supporting each other. Organisations have to make these opportunities available during times of crisis.

Limitations of the study

Firstly, one of the potential drawbacks related to the selection of the research participants for the present study is that we drew people from different levels in the organisation’s structure, that is, manager, group leader, team leader, and operator. Even though we did not observe anything in particular in this regard, the use of people who report to each other may have constrained the research participants in fully contributing during the interviews.

Secondly, a lack of generalisability is often considered the greatest drawback of using a single case study (Bryman & Bell, 2007). Even though some writers argue that the process of theoretical sampling should create a theory that is exportable (as opposed to generalisable) to situations where circumstances similar to the case exist (Flyvbjerg, 2006; Morse, 1999a; Popay, Rogers & Williams, 1998; Yin, 2003), we believe we have to acknowledge the limitations imposed by using a single research setting.

Thirdly, Merriam (2009) identified the selective use of data by the researcher and potential researcher bias because of researcher subjectivity as another limitation inherent in qualitative research. Even though we believe that, through the use of reflexive practices, peer reviews, member checks, peer debriefing, audit trails, and rich, thick descriptions, we may have addressed this issue, we acknowledge this as a potential limitation.

Fourthly, grounded theory is not immune to criticism. The most common criticism is a lack of scientific (deductive) analysis (Gasson, 2004) and its inability to render testable theory (Goldthorpe, 2000).

The final limitation relates to the actual outcome of the crisis period used to frame the study. The opportunities presented by the subsequent flooding in Thailand ensured a positive outcome. No jobs were lost, and additional overtime made up for loss of income. It would be naive not to think that the research participants’ experiences may have been different, had the outcome been negative, that is retrenchments, et cetera.

Recommendations

Additional research needs to be conducted on the areas depicted on the external sides of the hexagon. The research should focus on identifying the support elements required in the areas of authentic leadership, crisis readiness, resilience practices, strategic management, and quality management. The research should be based within the context of the crisis-driven environment.

Another area of research could be the implementation of the Coherence Hexagons Model, specifically ways to diagnose an organisation’s existing design and the processes to transform the organisation to meet the requirements of the model.

Finally, a study should be undertaken to identify those elements that signal coherence, that is, the point at which employee emotionality and panic have been addressed. At this stage, managers can refocus their leadership on addressing ongoing strategic and operational issues.

Conclusion

The world is changing at a rapid pace and turmoil is becoming the norm. The management of employee panic in times of crises is fast becoming one of the competitive advantages of any business. The Coherence Hexagon Model presented in this paper provides a practical way of addressing coherence when all else may seem out of control.

Acknowledgements

The authors declare that they have no financial or personal relationships which may have inappropriately influenced them in writing this article.

H.J.P. was the PhD student, A.B. was the supervisor, and W.S. was the co-supervisor of the study which this article is based upon.

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Original Research

An organisational coherence model to maintain employee contributions during organisational crises

Hendrik J. Pelser, Anita Bosch, Willem Schurink

Abstract

Introduction

Key focus of the study

Background

Purpose

Trends gleaned from the literature

Research design

Research approach

Research strategy

Research method

Research setting

Entrée and establishing researcher roles

Sampling

Data collection methods

Recording of data

Strategies employed to ensure quality data

Findings

Discussion

Why hexagons?

Interpreting the hexagons

The coherence hexagons’ foundational elements and sub-elements

The coherence hexagons’ action elements

Limitations of the study

Recommendations

Conclusion

Acknowledgements

Competing interests

Authors’ contributions

References