In this chapter we will examine the nature of the corporate crisis. We will study eight of the most typical sources of an existential corporate crisis and use examples from our cases to better understand the root cause and highlight the influence of the national culture.
A crisis is a defining moment in any organization's life. Will it prevail or falter? Overcoming a crisis often embeds deep values in the psyche of the corporation. A company facing financial disaster where, in its view, it was mistreated by the banks, may decide never again to be reliant on external funding – if it survives the experience. However, not all organizations will or should survive such a disaster. Sometimes, the forces of creative destruction as suggested by Schumpeter will simply play out; the organization will disappear unceremoniously and other, more efficient, organizations will take its place.
However, some organizations like P&G, Siemens, Shell, GE and Exxon have prevailed over many decades, and continue to add value to society. We are not arguing that all companies should or could prevail for centuries. In our global society with its higher level of transparency and accountability, there is less room for inefficient companies, or companies that don't comply with basic legislation and human rights. By enhancing insight into their own cultural strengths and history, we believe more companies could prosper for longer, which is one of the main reasons for writing this book. If we can ...