Changes in the macro environment, economic changes, political changes, social changes, environmental changes and legislative changes are constantly taking place, just to mention a few. Therefore, it is important to determine the capacity of companies to cope with these changes. Why do some organizations fail or disappear and others recover and even give better results?
Businesses should avoid developing a work environment that makes it difficult to accept planned changes and challenges.
"This capacity that some organizations had and that allowed them to emerge victorious from the crisis is called resilience, which is the ability to overcome the negative effects of internal or external shocks." (Briguglio, Gordon, Farrugia, & Vella, 2008).
Organizational resilience has gained popularity in the business world in recent years, this article will discuss the most relevant aspects of organizational resilience and resilience.
HISTORY OF RESILIENCE:
The concept of resilience emerged in the 1970s with some research carried out on schizophrenic mothers and their children. These investigations showed how some of these children were able to overcome problems and adversities due to the condition of their mothers; however, they also managed to lead a healthy and productive life. However, some other children could not overcome these traumas and throughout their lives they lived at a disadvantage.
Later, the concept of resilience was adapted to the organizational environment. Basically emphasizing the positive psychological ability to return to a normal state and overcome adversity, conflict, uncertainty and defeat. However, the concept of resilience not only encompasses the organizational environment, it also involves the performance of workers and the workers themselves.
DEFINITION OF RESILIENCE:
Resilience is used in different contexts such as physics, ecology, psychology and more recently management.
- For physics, resilience is the mechanical characteristic that some materials have to regain their original shape and size after being subjected to pressure, heat or blows, giving positive results due to the elasticity and composition of the material. Resilience in ecology is called as a way to understand non-linear dynamics, as well as the processes through which ecosystems self-maintain and persist in the face of disturbances and changes.Resilience in psychology is defined as a set of social and intrapsychic processes that make it possible to have a healthy life living in an insane environment. Like other psychologists they define it as the combination of factors that allow a human being to face and overcome the problems and adversities of life and build on them.Resilience is the ability to recover or adapt to change. Resilience, according to the Dictionary of the Royal Spanish Academy, comes from the Latin highlighted which means “to jump back in or jump up.” “Resilience is the ability of people to address adversity successfully, transforming crises into development processes. " (Veliz Montero, 2014) "The ability of an organization to absorb shocks and deep impacts without losing the ability to fulfill its mission" (Sampedro, nd) "The ability of the company to respond quickly to unforeseen changes, even chaotic interruptions. It is the ability to bounce back and indeed to bounce forward with speed, grace, determination, and precision ”(Bell,2002) "The ability to dynamically reinvent business models and strategies as circumstances change" (Hamel & Valikangas, 2003)
CHARACTERISTICS OF RESILIENCE:
- Every human being can express resilience It re-means the concept of crisis, loss, possibility It can be experienced individually or in a group It is applied in adversity scenarios This is based on self-esteem and self-confidence A state of well-being is achieved through the transformation of pain and loss The economic condition does not have Any relationship with resilience It is episodic and must be cultivated, therefore it is not absolute or stable. It applies a redesign It challenges the strengths, certainties and potential of individuals. It is forged in the interaction with the environment and with others.
ORGANIZATIONAL RESILIENCE:
"Organizational resilience is defined as the ability of the company and all its members to accept and make change their own without diminishing or losing the energy and well-being of the organization and its individuals." (Patterson, 1997)
CHARACTERISTICS OF A RESILIENT ORGANIZATION:
- Ability to create and dissolve structures, they are innovative and creative organizations.They are institutions that recognize themselves as made up of people and therefore beyond their structures or legal limits, they are perceived as dependent on human dynamics and therefore must put Attention to the psychological and physical states of its members Provide security in the midst of change They are institutions that know how to overcome crisis situations, seeking in their own workers the resources and potential that allow them to move forward Manage the emotional consequences of continuous transformation and change: anxiety and pain.They are organizations attentive to environmental changes that will react in a timely manner to the demands of the environment They are organizations capable of renewing and adjusting to new demands They are democratic organizations that value the collective, transparency in the communication process, participation in decision-making and They believe in their workers. They are companies with excellent knowledge of the situation, threats and opportunities faced by the organization. They have a strong commitment aimed at proactively identifying and managing key vulnerabilities.Threats and opportunities faced by the organization They have a strong commitment to proactively identifying and managing key vulnerabilities.Threats and opportunities faced by the organization They have a strong commitment to proactively identifying and managing key vulnerabilities.
STRUCTURE AND APPLICABILITY OF RESILIENCE:
Contrary to what many may think, it is not necessary that the organization suffers some disturbance or that it is suffering something for there to be organizational resilience. However, when companies are disrupted, it is easier to detect their resilience and see how developed it is.
It is important to have knowledge of the degree of preparedness of companies to face probable crises. All this is possible by observing behaviors within the analysis such as the degree of affectation, recovery time, the consequences and the experience acquired.
"The final objective, after due evaluation, is to see what factors strengthen or should be encouraged within the organization to ensure growing profitability, constant value generation, strong growth and greater durability within the market." (Leon Sanchez, 2013)
THE HOUSE OF RESILIENCE
This is one of the most used tools to know how resilient companies are. It presents in a fairly understandable way some of the key elements that contribute to resilience. It is used as a qualitative model to identify resilient elements.
Little House of Resilience
Development of the structure of the house:
- Foundations: These are the basic elements that any company needs to survive, these elements, although they are obvious, must be taken into account Subsoil: Here you have to know the relationships that the company has, how accepted it is and what perception the company has environment of it First floor: It is about giving a meaning or meaning to the company, this is achieved through vision, mission and objectives Second floor: Here it is about the sense of belonging of the workers towards the company, and how much the company would do for the employees, it also deals with aptitudes, that is, to establish what is good for the company and what is not; And finally, he also understands the work environment: what type of internal conflicts exist in the company and how happy the workers are within the company.Here it is about seeing how much openness the company has to receive new solutions, explore new fields and mainly that companies are always willing to change.
ELEMENTS OF BUSINESS RESILIENCE:
Risks are immanent to any organization, Turkish consists of defining the frame of reference Some areas of vulnerability divided into 4 quadrants are:
- Financial: it includes a large number of macroeconomic problems, internal financing, fluctuations in the exchange rate to a decrease in the credit rate due to irregularities in the financial statements, the market and the general economy. Strategic: “It is considered from the possible arrival of competitors foreigners to public boycotts, caused by internal ethical violations of the company. " (Medina Salgado, 2012) Risk: includes climatic conditions such as earthquakes, accidents, terrorism, toxic waste management, etc. Operation: everything related to suppliers to robberies carried out by company employees and the factors causing interruptions in the production process.
Basically this tool helps to prevent and select an adequate strategy to respond to crises. Booz Allen Hamilton has called this prevention perspective business resilience and is made up of:
Organizational Resilience Factors
FACTORS AFFECTING ORGANIZATIONAL RESILIENCE:
- Leadership: At the time of crisis, uncertainty and doubts about the future always arise among all members of the organization and that is when a good leader becomes essential, as members need to make sense again, get up and be stimulated. However, it is not enough to have a good leader, but he has to see clearly the problem of the organization to not only attack the consequences. At this point the type of leadership that best suits organizational resilience is "transformational leadership" which anticipates future trends and inspires others to adopt a new vision of possibilities. This type of leader has inspiring motivation and idealized influence.It is a quality that must be built within the organization and basically refers to the ability to visualize the real problem that leads to a crisis and not only its consequences. Objectivity is centered on the optimization of resources. A company should never waste its resources and even less in times of crisis. Sense of belonging: When the employees of a company have a sense of belonging, they not only understand the values of the company, but also transmit them and make them respect them. This enables companies to resurface solidly and independently without compromising their capital.Sense of belonging: When the employees of a company have a sense of belonging, they not only understand the values of the company, but also transmit them and make them respect them. This enables companies to resurface solidly and independently without compromising their capital.Sense of belonging: When the employees of a company have a sense of belonging, they not only understand the values of the company but also transmit them and make them respect them. This enables companies to resurface solidly and independently without compromising their capital.
RELATIONSHIP BETWEEN INDIVIDUAL RESILIENCE AND ORGANIZATIONAL RESILIENCE:
Well to say both, individual resilience as well as organizational resilience seek the well-being of the human being. Resilience resigns negative experiences and subsequently generates positive reactions from the entire negative context. People are not born resilient, but rather they return after living some experience and the same happens with organizations.
EXAMPLES OF RESILIENT COMPANIES:
- Xerox: When Anne Mulcahy became CEO of Xerox in 2001, she was faced with a stark reality - the company's stock had fallen 92% in less than two years and the debt-to-equity ratio was roughly one 900%, these facts caused Moody to rate the company's bonds as junk. Another factor that aggravated Xerox's situation was the intervention of the United States Securities Commission, which had ordered an investigation into the company's accounting books. This action limited the alternatives for obtaining new capital. Although the situation that Mulcahy had to face was not easy, she never gave up in her fight to get the company afloat. As a first notable measure, Mulcahy closed several business units,One of these was the unit inkjet printer that had previously been promoted by itself; This action was aimed at alleviating the company's costs. Another notable action was not to be intimidated by her directors, who were pressing for Xerox's exit was to file for bankruptcy. He was also able to show firmness by highlighting that there would be no kind of cutbacks in the research and development sector, but on the contrary, this sector had to be developed with greater impetus, for which investment should be increased. For the year 2006, Xerox posted profits of approximately $ 1 billion and its transition has been sustained for at least the last 6 years.Another notable action was not to be intimidated by his directors, who were pressing for Xerox's exit was to file for bankruptcy. He was also able to show firmness by highlighting that there would be no kind of cutbacks in the research and development sector, but on the contrary, this sector had to be developed with greater impetus, for which investment should be increased. For the year 2006, Xerox posted profits of approximately $ 1 billion and its transition has been sustained for at least the last 6 years.Another notable action was not to be intimidated by his directors, who were pressing for Xerox's exit was to file for bankruptcy. He was also able to show firmness by highlighting that there would be no kind of cutbacks in the research and development sector, but on the contrary, this sector had to be developed with greater impetus, for which investment should be increased. For the year 2006, Xerox posted profits of approximately $ 1 billion and its transition has been sustained for at least the last 6 years.but on the contrary, this sector should be developed with greater impetus, for which investment should be increased. For the year 2006, Xerox posted profits of approximately $ 1 billion and its transition has been sustained for at least the last 6 years.but on the contrary, this sector should be developed with greater impetus, for which investment should be increased. For the year 2006, Xerox posted profits of approximately $ 1 billion and its transition has been sustained for at least the last 6 years.
- IBM, one of the largest computing companies in the world in the mid-80s IMB began to suffer certain setbacks, which caused the company to register losses for the first time in the early 90s, which in 1993 amounted to 15,000 million dollars. That same year the board of directors decides to appoint Lou Gerstner as executive director of IBM, in which all hopes were placed. One of Gerstner's first measures was to recognize that facts was a priority for IBM, in his first statements about the company he made it clear that: "The last thing IBM needs at this time is a vision", for him to rebuild a new culture within the company it was important but not the most urgent, at that time,According to the decisions taken by Gerstner, it was more urgent to be able to have the right people in the right positions and at the same time to be able to recover profitability, once again placing the customer as the central gear of the company. These actions in the very short term did not have any repercussion, according to a USA Today publication, issued after 100 days of Gerstner's management, IBM's shares had fallen by 6%, because according to some critics “it was not doing nothing". To the surprise of many Gerstner managed to constantly increase the profitability of the company progressively, going from an increase of 5% in the first year to 9% during his last year of management, a behavior that was not surprising due to the reengineering of the company. which were all the business processes submitted,work that had a major impact by eliminating approximately $ 14 billion in inefficiencies.
- TOYOTA: a model of resilience during the crisis During the financial crisis of 2009, Toyota was seriously affected, since it not only had to face the economic recession but also in 2009 the studies on an accident of a family that was mobilizing in a Toyota vehicle and that as a consequence left 4 people dead in the state of California that the cause of it had been errors in the vehicle. Although after many studies it was known that the fault was not directly with Toyota but with the distributor who did not follow the corresponding quality process, Toyota's losses were no longer purely economic due to the recession and became a loss of the good image of the company and its reputation both in the United States and globally.The brand that for years had been synonymous with quality and safety was now mistrusted by its customers. These two crises that came together in times, have not been the only ones that Toyota has gone through as a company. In 1950 Toyota was in a rather unfavorable situation due to the bad economic situation of Japan at the time as a result of the Second World War. During the crisis, the company did not make massive layoffs, did not close production plants, and did not cancel investment in training or research and development. First, in order not to go to the massive layoffs, Toyota implemented the agreement or plan for the voluntary retirement of employees and the bonuses and overtime were temporarily canceled. Also,Toyota analyzed which vehicles would have the greatest decrease in their demands and suspended their production during the crisis. There are production plants that were dedicated solely to these vehicles, so these plants were left without activities related to the production of vehicles. Despite this and as previously stated, no production plant was closed. These plants continued to operate in training activities, training, implementation of quality circles, brainstorming meetings in order to find solutions to problems such as cost reduction, quality improvement, among others. At the time of the crisis, 40% of Toyota employees were not producing cars.From these activities, solutions were generated to problems that the production plants had in their processes, energy saving plans, new recycling processes among others that were ultimately implemented in all the production plants and that generated large reductions in costs and large benefits for the company. On the other hand, although investment in research and development was not canceled, there was a reduction in investment values due to the crisis. The R&D staff focused mainly on environmentally friendly vehicle models, electric motors, hybrids, among others that were having a better reception in the market and greater demand. Finally, Toyota has always understood complexity, so it knew that getting out of the crisis did not only depend on the company alone,it also depended on its suppliers. Toyota's main fear was that its suppliers would declare bankruptcy and they would run out of quality raw materials for the vehicles, therefore, Toyota decided to increase its inventories with two purposes: first to help its suppliers with the immediate payment of raw materials. by injecting money into them and second, if their suppliers declared bankruptcy and were forced to close, they would have supplies of materials to continue production.first to help its suppliers with immediate payment for raw materials by injecting money into them and second, if its suppliers were to declare bankruptcy and were forced to close, they would have supplies of materials to continue production.first to help its suppliers with immediate payment for raw materials by injecting money into them and second, if its suppliers were to declare bankruptcy and were forced to close, they would have supplies of materials to continue production.
Where did Toyota's resilience come from?
Toyota's resilience then grew out of the organizational culture that its leaders have created, shaped, transmitted and preserved. All the measures that Toyota implemented during the crisis were derived and based on the organizational culture of the company; This was created and transmitted to the rest of the members by its leader Akio Toyoda.The way in which Toyota faced a crisis in the past, two crises practically at the same time recently and the way in which it managed to emerge unscathed from them is admirable, since today despite the great difficulty it continues to be positioned as one of the best car brands in the world.
CONCLUSIONS:
It is obvious and more than clear that many changes are happening today and that organizations cannot remain immobile without doing anything about it. It is extremely important for any organization to adapt to change and continually reinvent itself to ensure its survival today and in the future.
Therefore, resilience is the ability of any organization to resist and face changes, as well as its ability to adapt to them and emerge victorious.
Bibliography
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