ABSTRACT
It was suggested by the chief executives who responded to the survey that most internal crises were predictable and were the result of poor management. Here we look at some examples of internally generated crisis and explain the difficulties firms have in dealing with them. The first problem is that in most enterprises power is held by a small number of individuals, or even one person. Unless they can be convinced of the nature of internal crisis the danger of collapse is likely to be great. This common problem, the myth of the great leader, is illustrated by the case of British Sugar. Even if they do recognise the nature of the crisis they may be unable to do much about it because of the nature of the enterprise. It may take a long time to get some organisations to change even with the power of the chief executive pushing change. Some organisations have very strong divisional power bases that can resist change. An example of this vulnerability is the BP programme of change which, in avoiding one perceived internal crisis, led to another. The third example outlines a common internal crisis that firms have to deal with. Industrial accidents were seen in the survey as one of the most potent internal threats that chief executives faced. We provide an illustration of this problem by looking at the way the French multinational, Perrier, handled the problem of the contamination of their product. This case also illustrates the problem of communication, secrecy and centralisation.
