Formation of crisis situations in modern organizations and their impact on market functioning

Abstract

PURPOSE: The goal is to identify potential areas where crisis situations may arise in organizations and their impact on the contemporary market.

DESIGN/METHODOLOGY/APPROACH: The research problem centres on the question what factors generate crises in organizations? To address this, it is essential to characterize the critical areas within modern organizations. The research hypothesis posits that maintaining effectiveness in organizations results from understanding organizational mechanisms and processes. This requires leadership focused on a deep comprehension of the organization as a system composed of various elements and the relationships between them. Such leadership fosters cohesion among organizational components through direct communication, enabling the acquisition of knowledge and information about the organization's internal and external environments. To answer the research question and verify the hypothesis, the authors conducted an analysis of the available literature.

FINDINGS: The hypothesis has been positively verified. An organization should be viewed as an organized entity created by specific individuals or external institutions led by particular individuals. Through the implementation of a strategy, it becomes complex, integrated, and oriented, ensuring effective management. Understanding an organization as a bundle of various goals, rights, contracts, transactions, and expectations allows one to grasp the essence of its functioning and helps prevent crisis situations.

PRACTICAL IMPLICATIONS: The analysis of the collected material shows that crisis situations can result from a lack of knowledge about the fundamental areas of an organization: its organization, complexity, integration, strategic orientation, and unfamiliarity with interpreting organizational metaphors as a bundle of rights, transactions, expectations, or contracts.

ORIGINALITY/VALUE: An analysis of the collected literature shows that crisis situations are an inherent feature of every organization. However, thanks to scientific management, managers identify and prevent the development of crisis situations. Organizational knowledge contained in theory and practice allows for understanding their functioning and recognizing their impact on the organization and the market.