Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2018 Vol: 17 Issue: 5

Impact of Strategic Planning on Crisis Management in the Profit and Non-Profit Sector in Jordan

Abdullah Abbas Al-Khrabsheh, Al-Balqa Applied University

Keywords

Strategic Planning, Crisis Management.

Introduction

In the highly competitive environments of the modern world, the practice of commerce has been subject to more challenging and complex pressures. Therefore, any type of work of any extent that is not handled in a strategic manner will be severely weakened (Ocloo, et al., 2014; Nickols, 2016). Moreover, firms must locally practice suitable techniques in order to adopt a more dynamic profile (Ocloo et al., 2014). As well, the aim of devising strategies is to overcome competition and make useful distinctions within markets (Papulova & Papulova, 2006; Madu, 2013).

As a result, strategic management involves retaining the idea of achieving corporate objectives and purposes while viewing the growth of a firm in terms of the corporate resources used (Madu, 2013). Given the internal significance of strategic management to the typical firm, several researchers have demonstrated that most corporate objectives need to be handled deliberately in order to fulfill their purposes in the end (Nickols, 2016).

Consequently, the idea of strategy-focused management was conceived in terms that reflect more of the societal controls approach of the discipline (Fitzroy et al., 2012). Strategic Management (SM) as fully described by various researchers (e.g., Johnson et al., 2013; Ridwan, 2015) comprises three primary elements: strategic formulation, application, and analyses . In addition, the key practice of the SM technique comprises Strategic Planning (SP), which establishes grounds for opposing steps, including: strategic formulation, application, and analyses (Julian, 2013). As a result, SP is critical to firms for its ability to make contributions to enduring success and influences on the advance of SM (Elbanna, 2016).

Specifically, the practice can reveal newer prospects for a company as it enables defensive measures against all crises that may burden it externally or internally (Bryson, 2011). Moreover, reports (Vargo & Seville, 2011) have directed the establishment of an Associate in Nursing license that recognizes the significance of SP as a means for marshaling organizational strength to manage crisis and risks that would otherwise degrade the company and undermine its position.

Organizations are confronting changing difficulties at various times in this new millennium. Consequently, the world is becoming smaller in operational extent due to progress in information and communications technologies and other modern advances. The fractious cultural movements that induce successive crisis are confronted by organizations that risk their property, and therefore their on-going prospects. These have lately presented themselves in a variety of failures that range from financial failure, epidemics, and other natural calamities; violent actions among staffs and from terrorist factions as well. The private sector is confronting change as varied organizations experienced transitions, as a result of strong competition and compelling technological advances that arise during periods of socio-economic and political progress. Firms do not manage these factors by themselves but will respond to changes if they are required to strategically devise schemes. It is now vital to regard potential adverse conditions right from the planning and therefore the preparations required to manage them (Hasan et al., 2017).

To be clear, the management of a crisis must still be subject to good (Coombs, 2014) planning for appropriate responses. This will help company workers to improve their skills and allow the firm to survive as well as prosper (Vargo & Metropolis, 2011; Pal et al., 2014). Therefore, Vargo & Metropolis (2011) stated that Crisis Management (CM) emphasizes the handling of threat factors. Although SP also pursues the discovery of opportune prospects, the use of SP during periods of crises can be of considerable profit to the company by affording it the ability to work and compete as well as own strength in dealing with risks (Pal et al., 2014). Moreover, to be resilient, firms should use intensively SP in unsettled and dynamic issues in order to survive as well as prosper (Vargo & Metropolis, 2011; Ismail et al., 2011). As a result, Service Sector Firms (SSFs) present far more adaptable LE than alternate firms. As they require a grounded sense of strength, they will effectively handle any crisis in all places and at all times (Ocloo et al., 2014). Although several firms, particularly those in service sectors, scheme and operate poorly, numerous such organizations have prospective opportunities to grow and evolve various means of handling unanticipated challenges in a highly skilled fashion (Kraus et al., 2013). Although the significance of service sector firms in creating value and increasing employment was considered, the functions of these organizations as suppliers of key resources to services and producers were usually neglected and not fully covered (Damuri, 2014).

Strategic planning is critical to make sure that the organization is prepared to meet future difficulties. Modern strategy-oriented planning comprises a lengthy system for realizing a vision or managing future environmental conditions. The processes are neither fully prescriptive nor fully clear (Mintzberg & Waters, 1985). Given this assumption, we typically characterize strategy-oriented planning processes in terms of structured activities that continually cover objectives and mission, survey the competitive environment, analyse strategic options, and coordinate implementing activities throughout an entire organization (Andersen, 2004). The aim of effective strategic planning technique is to investigate competitive means that transform and enable organizations to attain viable positions within the marketing environments entered into by the organization (Proter, 1979).

SSSFs are exposed to the undesirable influences of various critical problems, being subject to fast-evolving market conditions and customer needs (Vargo & Metropolis, 2011). Their responses are therefore collectively affected to an extreme during crises due to constraints in human resources and funding (Bourletidis, 2013). The typical SSF actually has preparative potential to apply strategy-oriented planning in order to address risks (Ismail et al., 2011; Pal et al., 2014). This research offers a pioneering and hopefully key report on the corporate environment that addresses the limited array of research on strategic planning that is currently available in Jordan.

Literature Survey

Crises and crisis management is summarized as “the technique that enables attempts to identify and predict critical problems during activities or measures that are designed to end a crisis, or to prevent events from developing into further crises, while minimizing the effects of disruption such crises as may be unpreventable” (Preble, 1997). Hermann (1963) define the Crisis As depicted is something that: (1) debilitates high-need estimations of the association; (2) shows a confined measure of time in which a reaction can be made, and (3) is startling or unforeseen by the association. Weisath et al. (2002) contend Crisis management is a composed and deliberate process that the association endeavors to distinguish and anticipate the potential emergency and afterward utilizes a protection capacity against them to limit its belongings. Emergency administration can be led on these levels, for example, political level, key level, strategic level, agent level and specialized level.

The practice may be described as a means of proactively preparing organization for probable worst-case situations. SM involves devising strategies that can minimize adverse effects on operations in both the long and short run. Crisis management comprises disciplines for readying those resources and services that are required for successful responses during periods of crises and successful recovery afterwards (Vargo & Seville, 2011). The practice involves development of the aptitude to identify close threats to the firm and arriving at plans for meeting those threats. Crisis management involves those actions carried out for those things to be established beforehand, managed during, and assessed following crises (Wang & Ritchie, 2012). Crisis descriptions are typically presented in explicit contexts that validate selected crises interpretations; these typically comprise 3 elements that are common to the majority of crises definitions: (1) serious threats to the on-going prospects of organizations; (2) elements of uncertainty; and (3) brief decision intervals for responses (Racherla & Hu, 2009). As well, most sources support formal descriptions of crises as forming part of techniques in place of event timelines, due to their development. Subsequently, most researchers viewed it as a useful technique, with most coverage of such models comprising totally different phases of developments. As a minimum, the practice can be separated into three steps: (1) Beforecrises (crisis plans); (2) During-crises (crises-response); and (3) After-crises (crises analyses and learning). Nevertheless, some researchers will separate the steps into sub-steps (Ghaderi et al., 2015).

Much in the literature addresses the threatening aspects and dismal outcomes of the typical crisis. However, opportune prospects can be present at times. Most of research presented 7 opportunities that can emerge during crises: (1) emerging leaders; (2) fast- developing transitions; (3) confrontations of emerging problems; (4) transforming workers; (5) developments of novel strategies; (6) establishment of early warning schemes; and (7) novel competitive strengths. As noted by Mogendorrf, some positive prospects include: reworking the concept of services to innovate goods for modern markets or to differentiate products, refocusing on varied market segments, rescaling structures and operations to more manageable levels, relocating to safer sites, modifying processes, mixing actions or departments for delivering better client services and pricing, updating assets, redefining worker skills and benefits, and retraining staffs. Generally, there are a number of schemes for managing crisis jointly, in terms of reactive and proactive strategies. With proactive stances, selected plans are implemented before crises occur. Decision makers would anticipate varied crises from vulnerability analysis and would have evolved planning to manage risks. With reactive stances, selected plans are presented during critical events, with planners having the aim of containing and recovering swiftly from the harm suffered by the organization (Hough & Spillan, 2005). In detail, there are four schemes for managing crisis (Abd-Elaal R, 2008). The escape approach is a negative strategy wherein managers of the organization exit crises and their influences completely, even as they acknowledge weaknesses in order to cope with the issue in the future, with explanations given for the weaknesses that relate to worker performance. The containment approach is applied whenever management attempts to lessen the disruptive outcomes stemming from crises. Once crises are diminishing at that point, the approach seeks to mitigate the pressures produced in passing then mitigate damaging effects. The cooperative approach is resorted to wherein every member of the crisis team helps to coordinate responses once crises emerge, with all members assigned specialized duties. The project approach is applied wherein management with assistance from staff work in a highly methodical manner that supports the practical prediction and recognition of crisis functions and tasks, in a swift manner through critical phases while seeking to mitigate undesirable influences and return the organization to the level of stability it enjoyed.

Concept Of Crises

The means for recognizing and handling crisis have changed these days and present huge challenges, as these are not used only to heed the issues, but also to collectively consider their aspects in a timely manner (Darling et al., 2005). “Crises” can vary in effect from one company to another. Nevertheless, the term is not all that important, and what matters is that any general strategy devised by the company should be thoroughly and often re-examined in its operational matters and planning and be appropriately handled (Darling et al., 2005). Millar (2004) saw crises as incidents that suddenly occur and demand quick responses that bring risks and pressure, can undermine the reputation and may basically transform the company (Ulmer et al., 2014). The different classification schemes used in the research can justify their rationalization in accordance with the incidence of crises as well as their qualities and scope of impact. The trio of dimensions comprises the critical elements of the crises-type triangle depicted in the figure (Figure 1).

Figure 1: The Triangular Model Of Crises Management By Alas (2009) And Gao (2009)

To summarize Mitroff (2005), compartmentalization presents the classifications of various researchers and was the obvious approach that suited this report. It remains the responsibility of corporate management to consider in these a range of critical potentials that present strategic methodological schemes, that any crisis may be swiftly resolved or stopped from growing. Moreover, Mitroff’s classifications of crises were excellent, as it is backed by Sher (2006), and evolved by Alas (2009). In prior reports as with (Gao, 2010), over 50% of crises reported were economic or financial in nature, the second most common were reputational, while the third most common involved human resource issues. Physical as well as communications crisis, natural calamities and psychopathological acts occur in three primary crises types. Goa summarized those three major types of crises: socio-economic, reputational, and human resources and defined the links between these by providing guidance on a means for innovating social shaping schemes that mitigate undesirable influences.

Table 1
Primary Types Of Crises
  Mitroff
(2005)
Sher
(2006)
Kay
(1993)
Hilbert
(2009)
Dowling
(2002)
Alas
(2009)
Economic/Financial      
Reputational  
Human Resources    

A further type of crisis, imputed by the researcher as a further explanation in this report, is the term “geopolitical crises”. The focus can be as important as that of other kinds of key crises in organized and established workplaces. Critical geopolitical issues with fractious Palestinians concern neglect by local politicians and decision makers. Geopolitical as well as religious considerations should not be dismissed as these can accompany the most important types of crises in this view.

Jordanian Trends in Regional Governance

Territories are partitioned into dual and widely separated regions: Jordan subordinate and mandated geographical regions, with both subject to socio-economic catastrophes and severe limits on daily life (Friedman, 2009). Jordan instability remains a dismal case under examination but nevertheless indicates the fractious politics that have evolved to affect the inhabitants’ quality of life. From the 2011 blockade on Jordan, matters worsened with militant uprisings and most aspects of life are still affected as a result of the political divisions. It is believed that a rational view of this divisive environment can further prior research, with contributions that can further distinguish the company and avail it of unique and successful means for managing crisis in both the long and short term. As explicit validated by Pollard and Hotho (2006), the more a company is prepared for crises, the better it will be able to handle the same, from decisions made to minimize negative influences once crises occur. A descriptive scheme is depicted in Figure 2. Government agencies (2010) declared with regret that on-theground studies of alternative markets will involve expanded reporting on the appropriate environmental issues under study, to follow in the coming years.

Figure 2: The Evolved Figure Of Types Of Crises Definition Of Strategic Planning

The idea of Strategic Planning (SP) developed over several decades and is an important element featured in strategic management sources (Brews & Purohit, 2007). The field of strategy-oriented planning has drawn important attention from both researchers and practitioners, for the benefits of involvement in systematic strategy-oriented planning are highly recognized (Rudd, 2005; Brews & Purohit, 2007). Stonehouse & Pemberton (2002) report that strategy- oriented planning comprises the establishment and design of organizational schemes that establish the flexible and general goals, techniques, and policies of a firm, which can bring the company what its leaders envision in the long term (Aldehayyat & Anchor, 2010). Moreover, strategy-oriented planning is seen as a required management tool in firms that intend to ensure that a suitable resource base is available to them, along with desirable places and times for achieving corporate goals.

Strategy-oriented planning is a key to the effectiveness of an organization, as it addresses the weaknesses and threats as well as the strengths and opportunities afforded. Strategic planning can be summarized as a “method of devising and implementing options that concern organization’s future directions. The technique is significant to each organization’s prospects in terms of the methods used by its people to adapt dynamically to the environment, and thus the technique applies at each management level and in every form of organization” (Boyle, 2001) summarized strategic planning as a technique that involves: a) establishing objectives or purposes; b) assessing claims about external environments; c) devising plans and assessing varied courses of actions along with analyses of prospective risks/rewards; d) selecting the most direct courses of action; and e) assessing effects as the actions are implemented. Strategy-oriented planning is a systematic technique that involves a series of phases that can enhance the standing of a firm as it pursues its missions, envisioning in the long term its needs, goals, activities in terms of strategic priorities, action plans, and programme analyses. The technique forms a critical component of strategic management (Sotirios & Nikolaos, 2016). It should be noted that a general source consensus exists on treating strategy-oriented planning as a technique, including methods for formulating, implementing, and assessing systematic approaches. As well, in business sectors, strategyoriented planning can be especially important as its practice was known to be linked to better performances in commercial organizations. Strategy-oriented planning allows established companies to every socio-economic and non-economic aim they pursue. Strategy-oriented planning remains important in the success of strategies for management (Sotirios & Nikolaos, 2016).

Modern developments in strategic planning processes and methods are critical to strategy-minded leaders (Frost, 2003). The technique comprises the key step in the discipline. As Bryson (1995) stated, the primary objective is to encourage established decision makers to accept that strategy-oriented planning is required and is in the interest of firms. Similarly, the significance of strategic planning methodology has led to numerous tools being devised to assess effects and identify organizational strengths, opportunities, weaknesses and threats (Murphy, 2011). As well, Gates (2010) believes that regular strategic planning processes should examine the related extent of an organization’s current environment (organizational status of its missions and guiding values), as well as expectations of growth and evolution (desired horizons), its corporate goals (what it is attempting), and its plans for progressing (how it attempts its goals). This clarification largely ends up in a more complete overall understanding of the discipline.

Crises And Strategic Planning

In the modern corporate setting, the key challenge found in the handling of a crisis is that management should be prepared to assume risks (Vargo & Sevllie, 2011). As an example, the management of a UN agency failed to heed oncoming crises as they were not guided into realizing that they would be subject to serious difficulties. Critical issues can otherwise lead to a company’s continuing decline if these are not addressed by management, as in the UN agencies that were accountable. Pollard & Hotho (2006) stated that the more a company is prepared for crises issues, the better it will be able to handle them. As a result, they emphasize the significance of managing strategic schemes that encourage total readiness for any crises that might occur. Additionally, (Reilly, 2008) demonstrated that external and internal strategic planning is actually necessary during crises. Consequently, successful crises frameworks are prepared to end every prospective difficulty while handling any crisis that is harmful in a way that can imbue the company with a better reputation than it enjoyed prior to the events (Ulmer et al., 2014). Crisis management will not succeed without effective plans. As a result, crises strategy must be conducted appropriately during such times. In similar contexts, strategic activities for handling crisis issues require practicable techniques that are supported by pre emptive strategy-oriented planning. The activities that organizations perform during crises must reflect the realization that the subsequent prioritizing of responses should support corporate needs and desires, characterize useful aspects based on crisis incidence and severity, provide required facilities to handle crisis, and mitigate undesirable influences. Crisis Strategic Planning (CSP) has thus become essential to supporting resilient behaviors, i.e. the capability to immediately persevere through each crisis.

Resilient organizations show much greater readiness and flexibility when handling crisis events, while less resilient organizations fall short in strategic readiness (Pal et al., 2014). Resilient behavior enhances the ability of a company to not only to survive but to also prosper collectively, as it faces each crisis in real time. Based on Somers (2009), notwithstanding that the effectiveness of strategy-oriented planning is inseparable from effective crisis management, there remains the necessity to consider the limiting elements of coordinating actions, which must perform efficiently via the development of facile and flexible approaches, accommodative qualities, and resort to on-going improvisation and innovations. The root of the technique is found in its ability to foresee a prospective crisis, the stance of involved parties, and thus those indirect and direct conditions that bypass crises and mitigate impacts on the effectiveness of their administration. Via strategic coordination, an organization seeks to realize greater performance. The virtual element of risk (Thompson & Louie, 2006) will require making options more effective (Coombs, 2007). A dynamic evaluation of related issues (Valackiene & Virbickaite, 2011) will provide organizations with more active management during crises.

For any organization to confront crises and to remain ready to meet continuous difficulties, the management of a firm should be prepared to anticipate, confirm, and respond to troubling transitions in the internal and external environments. The rise of additional challenges is almost certain and for just this reason, management should encourage the use of active techniques that allow modifications and variance in activities that can bring advantages stemming from such transitions. This process is termed as the strategic planning method.

Groh (2014) assessed that associations between both disciplines have seen strategic planning develop as a practice apart from crisis management. The dual planning processes see considerable overlap.

1. Both practices cope with the organization’s future.

2. Both practices cope with weaknesses (vulnerabilities) and threats (risks).

3. Both practices involve processes that construct, implement, and value strategic schemes.

4. Both practices involve organizational structures and resources that maintain the organization. Both practices require planning and agility in four enabling qualities: management, culture, decision- making, and status recognition. The literature clearly shows that organizations that are intent on performing well in each discipline should:

1. Pre-plan in order to adapt quickly according to changing circumstances.

2. Get management to encourage their staffs with hopes and directions.

3. Promote an organizational culture that elevates disciplined planning while engendering a capacity for artistic as well as pioneering innovation.

4. Devise options in a systematic and thoroughly manner, while being responsive and prepared to move swiftly and boldly.

5. Form groups that are prepared to recognize patterns and assimilate disparate knowledge in order to discern patterns in the chaos of crises, while remaining discerning and attentive to minute transitions in the environment as it develops.

The differences between both disciplines are found in the emphasis that planning places on securing opportunistic prospects, while crises management emphasizes mitigating risks. The mix of practices tends to specialize in those threats that normally emerge in changing environments, although strategic planning emphasizes the opportune prospects that are inherent in transitions. Nevertheless, each opportunity and threat will emerge in an uncertain future that must be dealt with eventually (Burnett, 1998). Crisis management specializes in enhancing the ability of organizations to survive, while strategy-oriented planning specializes in enhancing its ability to prosper. Survival is the key sustenance aspect, while prosperity pertains to the opportunistic growth aspects of strategy-oriented planning (Vargo & Seville, 2011). Strategy-oriented planning usually supports the idea that the future will arrive much like today, whereas crisis management foresees future adversity. With today’s corporate settings, the future cannot be readily ascertained from present-day trends. However, a mix of both disciplines provides certain difficulties as observed by (Burnett, 1998).

1. Time pressure: a crisis may require coordinated and timely treatment, although strategy-oriented planning normally takes place in time frames involving months or even years.

2. Controls: strategy-oriented planning is normally controlled at an economical level of management above regular organizational processes and relationships, whereas crises can critically constrain such controls.

Threat magnitude and severities: During actual crises, the magnitudes and severities of threats can overwhelm managers to the point that it averts the planning and application of strategies.

1. Response options: Strategic planning tends to maintain a variety of options, but in actual crises, it may be that only one or a few options might be likewise available to select from. During periods of crises, it remains critical to assimilate crisis management within strategic initiatives, in order to handle events successfully. The combined effects can result in an organization that is resilient and crisis-ready. Resilience is the capacity of the subordinate organization to not only survives but to also prosper during difficult periods and in the face of hardship. Consideration and planning for either must simultaneously involve robust planning that raises the organization’s capability to avert, mitigate, or else directly handle crises effectively. By incorporating these practices into the associate organizations strategic planning processes and elsewhere, means may be devised to draw advantage from ‘silver lining’ prospects during crisis. Crisis strategic planning is a strategy that incorporates both within a strong overall planning approach (Groh, 2014). Preble stated that the addition of “crisis management’s defensive and preventive capacity to strategic management’s offensive marketing position and orientation can yield more comprehensive methods for strategic management of organizations ” (Boin & Lagadec, 2000).

Research Methodology

The constructive methodological strategy was selected in this research, which enabled crises estimations and evolutions of research perspectives in these issues. Literature surveys in this area were useful for constructing a framework of strategic planning methods for use in enhancing societal control capacity for crisis management (Valackiene, 2011). A key focus in this report was research into strategic planning methods and observations of the strategic processes that management may use in averting crisis events or moderating their influences.

Oyegoke (2011) Constructive research is utilized to characterize and take care of issues, and additionally to enhance a current framework or execution, with the general ramifications of adding to the current group of information. Productive research can be portrayed as connected investigations which frequently result in new information as regularizing applications. Albeit numerous examinations can be sorted under connected investigations, what separate them are their final products.

Conclusion And Implications

The practice and preparing of organization for probable worst-case situations will be thusly enabled to evolve their own practical methods for ending crises or minimize their influences. Furthermore, management will be enabled to manage in a strategic manner for the duration of most crises, to operate with greater effectiveness. And firms will be able to develop capable managers and workers who can encourage others with further hopes and overall progress. Management should pursue and evolve the best modern practices for use by firms in averting crisis as well as moderating their influences. The corporate management will be able to evolve further a means for exploitation of incoming Hawkeye State l, using practicable strategic methods for ending crises or minimizing their influences. Second, management will be able to operate in a strategic manner during crises in a most successful manner. Third, organizations will develop capable management that will encourage people with hopes and directions. Fourth, organizations will develop an increased capability to devise and establish options quickly and thoroughly, to deliver more confident responses. Fifth and finally, organizations will develop groups that can assess and confirm strategies and can eventually convert chaotic changes into opportune prospects that the organization can in turn learn to control and contest.

Resilient organizations show much greater readiness and flexibility when handling crisis events, while less resilient organizations fall short in strategic readiness (Pal et al., 2014). Present day business has turned out to be additionally testing, and making adapting methodologies is basic to each organization's prosperity; building up procedures is accordingly regularly used in most shaky settings (Bouhali et al., 2015). Also, SP alongside CM is viewed as a corporate backbone in taking care of and controlling emergencies that happen. The act of SP is quite suggested by Specific Scientists for benefit part firms (SSFs). Effective emergency key arranging is viewed as a procedure that exists as a way to all things considered advance control and rivalry. Customary methodologies for administrations recuperation have concentrated vigorously on constraining mischief and guaranteeing coherence amid blackouts, however these tend to disregard the key regions of emergency vital arranging that gives to survival as well as for aggregate success (Vargo & Seville, 2011).Too noted and comprehended about an advanced worldwide world that presents extraordinary difficulties and vulnerability, the successful execution of key arranging remains a most solid and monetary means for conquering these troubles, over a wide range of firms. This exploration was especially required with gathering and investigations of a shifted exhibit of data about Jordanian associations, as it distinguished the extent of vital arranging and emergency administration practices and approved the nature of connections among the two orders. Vital arranging tends to feature commitments to tending to basic occasions at each operational office and its ability for finding each succeeding emergency as it arrives. It likely advances key arranging claims to fame who are responsible in emergency administration parts in Jordanian associations, for more prominent acknowledgment of the capacity that vital arranging plays in effective emergency administration. Hypothetical ideas of emergency administration ought to stretch out outwards to include the commitments of key arranging. The essential down to earth surmising in this report is that an organization ought to consider the essentialness of the capacity of methodology arranged arranging amid times of emergency and its linkages to compelling emergency administration. Pioneers ought to be determined to building up the train as a partner degree that is essential to the advancement of vital arranging as a remunerating practice. Firms ought to apply strategy through the joining of emergency administration strategies and plans inside their corporate choice process. This would encourage expanded accomplishment in the advancement and selection of vital emergency arranging offers a way to absorb the two orders, which should raise the responsiveness of corporate administration that connects adequately in the training.

References