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Subject of this dissertation is the aetiology of crisis processes which place organizations under existential threats and which often cause organizational demise and bankruptcy. To date, research on organizational crises (OC) has not succeeded in identifying the generic grounds for these detrimental processes in organizations. A minimal consensus can be found in literature about some basic characteristics of slowly developing OC of non-catastrophic, non-sudden origin, which is the research object of this dissertation. The most often mentioned traits of such OC are: a) Increasing complexity and, at the same time, decreasing means of remedy in the course of OC. b) Ineffectiveness or adverse effectiveness of conventional management measures towards OC. c) Existential threat to the whole organization as a consequence of OC. d) Often very long incubation time with locally triggered or random place of OC outbreak. e) Unclear or seemingly multiple OC origins. Especially opaqueness and increasing complexity are two commonly reported properties which make OC both difficult to understand and to counteract as a manager, and also hard to explore theoretically. Complex, multifaceted and non-transparent phenomena are the research object of systems sciences, which deal with sets of invariant rules that are at work in systems and which are decisive for the behaviour of these systems. Because organizations are systems and OC are complex, multifaceted and non-transparent phenomena, this thesis looks at OC through the lens of system science. Using a systems, or more precisely, a management cybernetic theory called the Viable System Model (VSM) to address those issues, this work has overcome obstacles, observed in earlier research. The VSM is a topological model of the invariant control structure of any organization which defines the necessary and sufficient conditions for organizational viability or more specific for the ideal interplay of policy, adaptation, optimization, audit, co-ordination and operation. Because OC is a process which threatens an organization’s viability, the hypothesis was tested to what degree the VSM conditions can be used to understand and predict OC. To test this hypothesis the viability conditions of the VSM have been operationalized and translated into a questionnaire. With it, the system viability of 135 institutions has been assessed. Using a partial least square structural equation modelling approach the causal relationship between system viability and the prevalence of OC in the sample was tested and a significant and strong connection was found: The (absence of) system viability of organizations is strongly connected with the occurrence of OC. With these findings, the contribution of this dissertation is threefold; it provides a quantitatively underpinned increase in knowledge about the aetiology of organizational crises, a qualitative framework coded in plain language for the early recognition and prevention of organizational crises in practice and a quantitative test of the Viable System Models substantial claims. |
