Why Organisations Fail

In the following excerpt from his forthcoming book, Cloud Associate and Friend, Stavros Baroutas, explores why organisations fail.

Why organisations fail

After the financial crisis of 2008, or even a few years before the crisis, most of the organisations were unable to undertake great challenges or changes within the market (for instance, the textile and telecommunications industries).

Among the most important reasons for such failure is their inability to adjust to new and transforming environments.

Change, as any other transformation process, wavers over certainty on one hand, and uncertainty on the other. Only a few, well-prepared organisations are capable of resisting crisis, let alone respond rapidly to forthcoming change. Some of the most important reasons why organisations are unable to prevent disaster due to radical changes include the following:

  1. They get too comfortable in their former success;
  2. They presume that all operations are going perfectly well;
  3. They do not follow changes within their field of operations;
  4. They do not take into account the demands of their field of operations;
  5. They do not follow technological changes within their field of operations;
  6. They do not consider change possible within their field of operations;
  7. They lack a proper strategy;
  8. Their reflexes to potential crisis or change are weak;
  9. They are afraid to change behaviours;
  10. Finally, they lack proper leadership, by means of which all the above could be prevented.

The above-mentioned parameters foster lack of responsibility and trust, increased antagonism, lack of justice and imagination, excessively impulsive actions, as well as lack of proper focus and role assignment within organisations, companies, or even teams.

Successful organisations, which foster an environment of learning, adopt an analytic approach towards observation. In other words, they take under consideration all of the levels within an organisation, as well as every employee individually.

It is often the case that Heads of Departments are unable to decide on the next steps which are essential to their field of operation, thus lacking alternative plan suggestions, or new ideas and solutions. Therefore, a change in management is often necessary if change within the organisation is to occur.

Such a change does not necessarily include employees, but may also regard various circumstances, attitudes, as well as the psychological state of individuals within the workplace. It is necessary that attitudes which require change are clearly determined, in order for transformation to be properly targeted.

Such an analysis is essential in order to manage and reshape attitudes which do not conform to the intended future course of the organisation. As President of the United States Barack Obama puts it:

“Change will not come if we wait for some other person or some other time.  We are the ones we’ve been waiting for. We are the change that we seek”.

It is often necessary that changes within the organisation affect or change employees’ willingness and prospects, as well as have an impact on the norms they follow; that is, their expectations regarding particular responses to various issues. Changes may also make employees feel more fragile within an environment of uncertainty.

Nevertheless, current times require constant self-improvement in order to ensure increased safety during periods of financial depression and insecurity. Moreover, under the circumstances, it must be examined whether employees change their attitudes willingly.  Indeed, any stance towards an issue is bound to give rise to different intentions, thereby also different behaviours.

In turn, any model of personal cognitive processes also incites respective intentions and behaviours. It follows that different attitudes are followed by individuals’ personal views regarding forthcoming change.  The inherent human reaction towards the unknown is probably the most significant barrier to overcome, in order for organisations to be able to identify with the markets where they operate.

This requires training the employees in such a way that they will realise the need for change and make an effort to improve themselves. Permanence of employees without exhibiting a level of development is no longer the case. In effect, it might not even be enough to wait for the development of their professional skills.

Nowadays, intelligence, politeness and professional boldness are essential elements for a successful business person.   

What most books fail to include is the miserable atmosphere within the workplace. This miserable environment includes any occurrence within the company/organisation which may overshadow employees’ willingness and performance. Such might be an ill-disposed colleague, a bad employer, lack of a challenging environment, boredom, low wage, few opportunities for development and finally a negative mentality.

All the above constitute inhibitory factors and render the organisation ill-disposed to change, in as much as it lacks creativity, innovation, willingness for high performance, a touch of freshness, even a pleasant attitude among the employees.

5 Responses to “Why Organisations Fail”
  1. Steven says:

    Sounds like Kodak all over. Great posting.

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