ABSTRACT
CONNECTIONSOFEVENTSANDFREQUENTSHOCKS&OREXAMPLETHEIMPACTOFONEOFTHE MOSTSHOCKINGEVENTSOFTHERECENTPASTTHEATTACKSOF3EPTEMBERHAS BEENPROFOUND0URSUINGAVISIONANDGOALSUNDERSUCHCONDITIONSREQUIRESBROAD SKILLSONTHEPARTOFORGANIZATIONSANDTHEIRMEMBERSINCLUDINGIMAGINATIONAND HOLISTICTHINKINGASWELLASRATIONALPLANNING@.INE ELEVENSEEMSTOHAVESIGNALLED ABIGSHIFTINTHEATTENTIONOFBOTHEXECUTIVESANDORGANIZATIONRESEARCHERS $RIVEN LARGELY BY THE DYNAMIC NATURE OF HIGH TECHNOLOGY BUSINESSES
MANAGEMENTANDSTRATEGYSCHOLARSDURINGTHEPASTDECADEHAVEGIVENCONSIDERABLE ATTENTION TO THE RAPID PACE OF CHANGE AND RESPONSES TO IT SUCH AS FLEXIBLE ORGANIZATIONALSTRUCTURESAND@BOUNDARY LESSDESIGNSTHATBREAKDOWNINTERNAL SILOSFOSTERCROSS FUNCTIONALSOLUTIONSANDENABLEANORGANIZATIONTOKEEPUPOR SETTHEPACEOFCHANGEINITSINDUSTRY(OWEVERTHEFOCUSNOWSEEMSTOBESHIFTING TOANEWSETOFKEYDRIVERSOFCHANGEnSHOCKSURPRISECRISISDISCONTINUITYCHAOS nWHICHAREDIFlCULTIFNOTIMPOSSIBLETOANTICIPATE3CHOLARSHAVEBEGUNTO SEARCHFOREFFECTIVERESPONSESTHATORGANIZATIONSMIGHTMOBILIZETOSUCHTHREATSTO AVOID@COLLISIONSANDREMAINRESILIENT)NSHORTRESILIENCEALONGWITHAGILITYHAS BECOMEESSENTIALFORABSORBINGANDRESPONDINGTODISRUPTIVECHANGE
4HEPURPOSEOFTHISCHAPTER ISTOEXPLORETHESENEWKEYDRIVERS7ElRST SITUATEDISRUPTIVENESSINTERMSOF%MERYAND4RISTS CAUSALTEXTURESOFTHE ENVIRONMENTASDISCUSSEDIN#HAPTER7EDISTINGUISHAMONGTHREEKINDSOF DISRUPTIVENESSnOPERATIONALCOMPETITIVEANDCONTEXTUALnANDDEMONSTRATETHAT MANAGERSNEEDTOCOPEWITHEACHKINDINADIFFERENTWAY7EARGUETHATCONTEXTUAL DISRUPTIONISINCREASINGLYSALIENTFORMANAGERSTODAYANDSUGGESTTWOAVENUESFOR MANAGERSTOENHANCETHEIRCAPABILITIESINCOPINGWITHIT&IRSTTHEYNEEDTOSHIFT THEIRTHINKINGABOUTCHANGEFROMAN@EPISODICMODELTOA@CONTINUOUSMODELSEE ALSO#HAPTERINTHISVOLUME 3ECONDTHEYNEEDTOUSESCENARIOSTODEVELOPA ROBUSTFOUNDATIONFORIMPROVISINGEFFECTIVECOLLECTIVEACTION7ESUGGESTTHATDOING THESETWOTHINGSCANHELPMANAGERSTODEEPENTHEIRAPPRECIATIONOFCONTEXTUAL DISRUPTIONANDDEVELOPNEWCAPABILITIESTOCOPEWITHFUTURETURBULENCE 7ECITEDATAFROMANONLINEGLOBALSURVEYONCHANGEAGILITYANDRESILIENCE
THATWECONDUCTEDINONBEHALFOFTHE!MERICAN-ANAGEMENT!SSOCIATION !-! AND(UMAN2ESOURCE)NSTITUTE(2) !-!(2) 4HESURVEY YIELDEDUSABLERESPONSESFROMSENIORANDHUMANRESOURCEMANAGERS IN PRIVATE SECTORlRMSOUTOFTHEAPPROXIMATELYMEMBERSWORLDWIDEOF THESETWOASSOCIATIONS7EEXTRACTEDSUB SAMPLESOF@HIGHERPERFORMERSAND @LOWERPERFORMERSTOCONTRASTTHEIRVIEWSABOUTCHANGEANDREINFORCETHE IMPORTANCEOFBUILDINGADAPTIVECAPACITY
!SDISCUSSEDIN#HAPTERSTUDIESINTHElELDSOFSCENARIOSANDCAUSALTEXTURES DISTINGUISHBETWEENTHETRANSACTIONALANDCONTEXTUALENVIRONMENT-ANAGERS PLAY THEGAMEOFPRODUCINGGOODSANDSERVICES THROUGHDEALINGSWITHOTHER ORGANIZATIONSINTHEIRTRANSACTIONALENVIRONMENTS4HEYORGANIZETHESEDEALINGS THROUGHSTRATEGIESDESIGNEDTODELIVERSUCCESSINTHEINDUSTRYIES CHOSEN%ACH ORGANIZATIONCREATESANDMAINTAINSITSOWNTRANSACTIONALENVIRONMENTTHISISTHE ARENAOFITSOPERATIONALANDCOMPETITIVEPROCESSES/RGANIZATIONSALIGNTHEMSELVES WITHOTHERSINCERTAIN@VALUECONSTELLATIONS.ORMANNAND2AM¤REZP INWHICH@SUPPLIERSBUSINESSPARTNERSALLIESGOVERNMENTSANDOTHERECONOMIC ACTORSWORKTOGETHERTOCO PRODUCEVALUEWITHCUSTOMERS4HETRANSACTIONAL ENVIRONMENTSOFlRMS IN THE SAME INDUSTRYORVALUECONSTELLATIONROUTINELY OVERLAPTOSOMEEXTENT4HELARGERCONTEXTUALENVIRONMENTTHE@,RELATIONSHIPS DISCUSSEDIN#HAPTER ENCOMPASSESALLOVERLAPPINGTRANSACTIONALARENASANDIS THESOURCEOFFORCESTHATCREATEBROADERCHALLENGESSUCHASTECHNOLOGYADVANCES CHANGINGECONOMICCONDITIONSANDPOLITICALTRENDSANDSHIFTSINSOCIETALVALUES ANDATTITUDESEGABOUTTHENATURALENVIRONMENT )N%MERYAND4RISTS TERMSENVIRONMENTSCANBEDISTINGUISHEDIN
RELATIONTOTHEIRCOMPLEXITYANDDYNAMISMTHISGIVESTHEMTHEDISTINCTIVE@TEXTURES
DISCUSSEDIN#HAPTER"UILDINGONTHEIRWORKWEPROPOSETHATMANAGERSGENERALLY EXPERIENCETHECOMPLEXITYANDDYNAMISMOFANENVIRONMENTINTERMSOFITSPACE OFCHANGEANDITSDISRUPTIVENESS4HEPERCEIVEDFREQUENCYATWHICHEVENTSAND CONDITIONSCHANGEASWELLASTHEPOTENTIALFORUNIQUEUNANTICIPATEDSURPRISES DIFFERENTIATESENVIRONMENTALTEXTURESANDPRODUCESORGANIZATIONALCHALLENGESOF VARIOUSKINDS)NTHISCHAPTERWEFOCUSONTHEDISRUPTIVEASPECTOFENVIRONMENTAL CHANGE )NTHECAUSALTEXTURESFRAMEWORKPLACIDENVIRONMENTSARECHARACTERIZEDBY
MINERALDISRUPTIONANDAMODESTPACEOFCHANGE$ISTURBEDnREACTIVEENVIRONMENTS FEATURE COMPETITIVEMANOEUVRES AMONG INDUSTRYPLAYERSBASEDONGENERALLY ACKNOWLEDGEDRELATIVELYSTABLEANDPREDICTABLEGROUNDRULESOFCOMPETITION4HE COMPETITIONANDTHEDISRUPTIONITCAUSESMAYBEINTENSEWITHRAPIDCHANGESIN RESEARCHANDDEVELOPMENT2$ CYCLESPRODUCTINTRODUCTIONSANDTECHNOLOGY LEAPFROGGING THAT PROVIDE OPPORTUNITIES FOR n AND THREATS TO n COMPETITIVE ADVANTAGE)NATURBULENTlELDENVIRONMENT COMPETITIVEGAMINGISINTENSEAND FASTPACEDANDTHEGROUNDRULESOFCOMPETITIVEACTIONAREDISRUPTEDBYUNEXPECTED EVENTSANDFORCESCOMINGINFROMTHECONTEXTUALENVIRONMENT4HE@ESCALATING SCALEANDDENSITYOFSOCIALINTERACTIONBROUGHTONBYPOPULATIONGROWTHANDITS DEMANDSxANDINCREASINGBUTUNEVENTECHNOLOGICALINNOVATIONARETWODRIVING CONTEXTUALFORCESTHATHAVEBEENMAKINGENVIRONMENTSLESSSTABLEANDPREDICTABLE ANDPROMOTINGTURBULENCE-C#ANNAND3ELSKYP &INALLYWHENPACEORDISRUPTIVENESSBEGINTOEXCEEDTHEADAPTIVECAPACITIESOF
ORGANIZATIONSINTHATENVIRONMENTTHETEXTURESHIFTSAGAINANDAHYPER TURBULENT -C#ANNAND3ELSKY ORVORTICALENVIRONMENT"ABÓROG‡LU MAY EMERGE#HAPTERDISCUSSESTHESEEXCESSIVELYVOLATILETEXTURESWITHREGARDTOTHE SITUATIONIN6ENEZUELA !NACUTECRISISSUCHASANATURALDISASTERORTERRORISTATTACK MAYESCALATEQUICKLYSENDINGALLAFFECTEDORGANIZATIONSINTOASTATEOFEXTREME UNCERTAINTYANDDISTURBANCETOWHICHTHEYMUSTRESPONDINUNACCUSTOMEDWAYS 7EICK )FSUCHASTATEOFEXTREMEUNCERTAINTYRECEDESRELATIVELYQUICKLY THEN THEENVIRONMENTAL TEXTUREWILL REVERT TO THE LESS TURBULENTPRE EXISTING CONDITION"UTIFTHEEXTREMEUNCERTAINTYSTATEBECOMESENDEMICTHENTHEVERY EXISTENCEOFTHElELDOFORGANIZATIONSMAYBEINJEOPARDY !LLCAUSALTEXTURESOFTHEENVIRONMENTFEATURECHANGEOFSOMEKIND.OTE
THATRAPIDPACEANDCOMPETITOR DRIVENDISRUPTIONAREFEATURESOFTHEDISTURBEDn REACTIVECAUSALTEXTURE%FFECTIVEBUSINESSESROUTINELYCOPEWITHTHESECONDITIONS BYOUTPLAYINGTHEIRCOMPETITORS4HESECONDITIONSDONOTNECESSARILYPRODUCEA TURBULENTENVIRONMENT3ELSKYETAL )NTHETURBULENTCAUSALTEXTURERAPID PACECOMBINESWITHTHEBROADERCONTEXTUAL KINDOFDISRUPTIONDISCUSSEDBELOW TOPRODUCEINTENSECONDITIONSTHATCHALLENGETHENORMALCOMPETITIVEWAYSOF ADAPTING)NTHENEXTSECTIONWEEXPLORETHREEDIFFERENTKINDSOFDISRUPTIONLINK THEMTOENVIRONMENTALTEXTURESANDILLUSTRATECOPINGMECHANISMSTHATMANAGERS NEEDTOUSETODEALWITHEACHKIND
)FORGANIZATIONSAREFACEDWITHDISRUPTIONALLTHETIMETHENDISRUPTIONMAYBE CONSIDEREDROUTINEVARIOUSKINDSOFEVENTSISSUESPROCESSESANDIDEASCONTINUALLY THREATENTODISTURBTHENORMALFUNCTIONINGOFORGANIZATIONS9ETSOMEDISRUPTION ISFARFROMROUTINE3TRATEGYRESEARCHERSHAVEBEGUNTORECOGNIZETHESHOCKPOTENTIAL OFORGANIZATIONENVIRONMENTSASAKEYCONTINGENCYINADAPTATIONANDCAPABILITY BUILDINGSEE"OWERAND#HRISTENSEN3UTCLIFFEAND6OGUS3IRMON ETAL #LEARLYDISRUPTIONISABROADCONCEPTWORTHEXPLORING
4ABLE -ANAGERIALEXPERIENCEOFDISRUPTIVECHANGEOVERTHEPASTYEAR
7EBEGINBYASKINGHOWDISRUPTIONIMPACTSUPONORGANIZATIONS$ISRUPTIVEEVENTS ANDPROCESSESMAYPENETRATEDEEPLYORSHALLOWLY)NTHEGLOBALSURVEY!-!(2) WEASKEDRESPONDENTS @)NTHEPASTMONTHSHASYOURORGANIZATION EXPERIENCEDDISRUPTIVECHANGEx4HEIRRESPONSESIN4ABLESHOWTHAT SIGNIlCANTDISRUPTIONnTOlRMSCOREOPERATIONSBUSINESSSTRATEGYMISSIONAND VISIONORLONG TERMVIABILITYnOCCURREDINPERCENTOFTHEOVERALLSAMPLE BUTTHEDIFFERENCEBETWEENTHEHIGHERPERCENT ANDTHELOWERPERCENT PERFORMERSISSTRIKING(OWEVERWEDIDNOTASKMANAGERSTOIDENTIFYTHEKINDSOR SOURCESOFDISRUPTIONTHATAFFECTEDTHEM7EEXPLORETHISAREANEXT
Three kinds of disruption
7ESUGGESTTHATTHEREARETHREEBROADKINDSOFDISRUPTIONnOPERATIONALCOMPETITIVE ANDCONTEXTUAL"OUCHIKHIAND+IMBERLY -ANAGERSNEEDTOCOPEWITH EACHKINDINDISTINCTIVEWAYS /PERATIONALDISRUPTIONISTHENORMALmUCTUATIONINDEMANDSUPPLYANDPRICE
FORANORGANIZATIONSGOODSANDSERVICESOVERTIME4HISKINDOFDISRUPTIONOCCURS
INPLACIDENVIRONMENTALTEXTURES3CHOLARSOFORGANIZATIONDESIGNHAVEOFFERED STRUCTURALSOLUTIONSFORTHISKINDOFDISRUPTIONFORMANYYEARS&OREXAMPLE ORGANIZATIONALUNITSSUCHASSALESPURCHASINGANDHUMANRESOURCEDEPARTMENTS SERVEASSTRUCTURALMECHANISMSTO@BUFFERTHETECHNICALCOREANDENSURESMOOTH OPERATIONS4HOMPSON )NADDITIONORGANIZATIONSROUTINELYUSERULES POLICIES CHAINSOFCOMMANDANDPLANS TOCOPEWITHOPERATIONALDISRUPTION 'ALBRAITH #OMPETITIVEDISRUPTIONISCHARACTERIZEDBYJOSTLINGFORSUPERIORPOSITIONAND
SUSTAINABLEADVANTAGEAMONGPLAYERSWITHINANDEVENBETWEENINDUSTRIESSEE "OWERAND#HRISTENSEN 4HISKINDOFDISRUPTIONOCCURSINDISTURBEDn REACTIVE ENVIRONMENTAL TEXTURES )T CONTINUALLY THREATENS STRATEGICPLANS AND FORCESCHANGESINBASICBUSINESSSTRATEGYDUETOTHEACTIONSOFCOMPETITORSAND CHANGINGINDUSTRYCONDITIONSSEE-ICHAEL0ORTERSCLASSICWORKSON COMPETITIVESTRATEGY @(IGH VELOCITYINDUSTRIESWITHRAPIDPRODUCTINNOVATIONS PRESENTSPECIALCOMPETITIVECHALLENGES"ROWNAND%ISENHARDT /RGANIZATIONS COPE WITH COMPETITIVE DISRUPTION THROUGH COMPETITIVE
ENVIRONMENTAL SCANNING TRADITIONAL STRATEGIC PLANNING ANDMANOEUVRING JUDICIOUSPARTNERINGWITHOTHERlRMSANDDEVELOPMENTOFUNIQUECAPABILITIES -ANAGERSMAYINCORPORATENOVELSTRUCTURALFEATURESANDCROSS FUNCTIONALTEAMS TOMOBILIZEINTERNALCAPABILITIESAGAINSTTHOSEOFCOMPETITORSSEE.ADLERAND 4USHMAN 4HETACTICOF@HYPERCOMPETITION$!VENI PUSHES THEENVELOPEOFRESPONSESTOCOMPETITIVEDISRUPTIONBYCLAIMINGTHATlRMSCAN PROSPERBYCONTINUALLYDISRUPTINGTHEBASESOFCOMPETITIONINTHEIRINDUSTRIESAND INVENTINGNEWCOMPETITIVERULES3OMEBIGPLAYERSSUCHAS)NTELSFORMERCHIEF EXECUTIVEOFlCER#%/ !NDY'ROVERELISHDISRUPTINGTHEIRINDUSTRIESBYCREATING @TECHNOLOGICALDISCONTINUITIESTHATTHEYCANBOTHCONTROLANDWITHSTANDBETTER THANOTHERS9ETOTHERBIGPLAYERSSHYAWAYFROMSUCHAGGRESSIVEMANOEUVRINGAND TRYTOMAINTAINAN@IMPERIALORDERWITHINTHEIRINDUSTRY$!VENI #OMPETITIVEACTIONSMAYFAILTODELIVERTHEINTENDEDEFFECTSANDTHEYMAY
HAVEUNINTENDEDEFFECTSANDCONSEQUENCESTHATMAKETHINGSWORSEFORTHEINITIATOR FOROTHERPLAYERSINTHEINDUSTRYORINDEEDFORTHEINDUSTRYASAWHOLEORTHE WIDERSOCIETY4HEFACTTHATCOMPETITIVEDISRUPTIONSCANSPILLOUTOFTHEINDUSTRY CONTAINERANDINCITEWIDERSOCIALEFFECTSANDCONSEQUENCESHASNOTBEENSTUDIED MUCHBYSTRATEGYSCHOLARSINSTEADSCHOLARSOFCORPORATESOCIALRESPONSIBILITYHAVE TAKENUPTHESEISSUES)NADDITIONITISPOSSIBLETHATTHEPACEOFCHANGEMAY ACCELERATETOTHEPOINTWHEREITBECOMESDISRUPTIVEANDUNMANAGEABLEFORMOST PLAYERS4HATMEANSTHATTHEPACEOFCHANGEANDTHEDISRUPTIVENESSOFCHANGEMAY NOTBEMUTUALLYINDEPENDENTDIMENSIONSOFENVIRONMENTALTEXTURE4HESE@LOOSE ENDSLEADUSTOCONSIDERATHIRDKINDOFDISRUPTION #ONTEXTUALDISRUPTIONISLESSPREDICTABLEASITFALLSINTHECATEGORYOF@UNKNOWNS
THATWEDONTKNOW!SSUCHITPOSESPOTENTIALLYDAMAGINGCONSEQUENCESMUCH MOREBROADLYnBUTALSOPOTENTIALOPPORTUNITIES4HESEARETHETRULYSURPRISING
EXOGENOUSCHANGESTHATBUFFETALLlRMSINANINDUSTRYANDDISTURBTHEIRWELL CRAFTED PLANSANDSTRATEGIES4HISKINDOFDISRUPTIONOCCURSINTURBULENTENVIRONMENTAL TEXTURESTHEYAREINTRUSIONSOFTHENEWANDUNEXPECTED,RELATIONSHIPSINTO THESHAREDTRANSACTIONALSPACEOFORGANIZATIONS7EDISCUSSCONTEXTUALDISRUPTION ATLENGTHBECAUSEWEFEELTHISISnORSHOULDBEnTHEAREAOFGREATESTCONCERNTO MANAGERSOPERATINGINVOLATILEINDUSTRIESTODAY #ONTEXTUALDISRUPTIONSMAYCOMEINTHEFORMOFSURPRISESCRISESANDDISASTERS
WHETHERNATURALORMAN MADE"ECK.ATHANAND+OVOOR -ISRA -ITROFFAND!LPASLAN#UNHAETAL 4HEYARISEFROMANUMBEROF SOURCES
A .OVELCONJUNCTURESOF SEEMINGLYUNRELATEDPARTSOFONEORMULTIPLE SYSTEMS #OMPLEXITYTHEORYTELLSUSTHATWHOLESYSTEMSWITHDENSECONNECTIONSAMONG THEPARTSEXHIBITBEHAVIOURSTHATCANNOTBEPREDICTEDFROMUNDERSTANDING THEPARTSANDTHEIRDIRECTINTERACTIONS3TACEYVANDER(EIJDEN !NEXAMPLEIS0ERROWS STUDYOFTHE4HREE-ILE)SLANDNUCLEAR ACCIDENTANDITSAFTERMATHDISCUSSEDIN#HAPTER0ERROWEXAMINEDHOW COMPLEXLYCONNECTEDTECHNOLOGIESCANPRODUCEWHATHECALLED @NORMAL ACCIDENTS THAT CAN GO ON TO SEVERELY DISRUPT ENTIRE SOCIETIES SEE ALSO 0ERROW "ONABEAU NOTESTHAT@INTERCONNECTEDRISKFACTORSAND CASCADINGFAILURESMAKECOMPLEXSYSTEMSFRAGILEWITHOUTEVENCONSIDERING THEEFFECTOFMALICIOUSINTENTASINCOMPUTERVIRUSESORTERRORISTATTACKS ONINFRASTRUCTURE 4HETIGHTCONNECTIVITYOFCOMPLEXSYSTEMSINCREASESTHE LIKELIHOODTHATADISRUPTIONINONESYSTEMORPARTOFASYSTEMMAYJUMPA SYSTEMBOUNDARYANDPRODUCE@SYNCHRONOUSFAILURE(OMER $IXON P ORACASCADINGSERIESOFUNEXPECTEDEVENTS&ARJOUNAND3TARBUCK
B !TTEMPTS AT COMPETITIVE DISRUPTION THAT SPIN OUT OF CONTROL5NINTENDED CONSEQUENCESHAVE LONGBEEN STUDIED IN ECONOMICSPUBLICPOLICY AND OTHERDISCIPLINESBUTNOTSOMUCHINSTRATEGICMANAGEMENT7HENNEW DEVELOPMENTS INMULTIPLE INDUSTRIES EMERGE AND ACCELERATE TOGETHER THEYCANCREATEUNINTENDEDCONSEQUENCESTHATNOSINGLEORGANIZATIONCAN MANAGE%XAMPLESINCLUDEEFFECTSOFPOLLUTIONONTHEHUMANFOODCHAIN UNEMPLOYMENT CAUSEDBY JOB EXPORTS TO LOW WAGE COUNTRIES AND THE SUB PRIMEMORTGAGEMORASSINTHE53WITHWIDEEXPOSUREOFBANKSAND INVESTMENTlRMSWORLDWIDE
4HECONCEPTOFTHERISK SOCIETY "ECK"ECKAND(OLZER OFFERSARICHINSIGHTINTOUNINTENDEDCONSEQUENCES"ECKSIDEASTARTSFROM THEOBSERVATIONTHATALLDISRUPTIONSAPARTFROMNATURALDISASTERSARESELF INDUCEDINANENDOGENOUSSYSTEMICWAYnTHATISINDUSTRIALSOCIETIESUSING COMPLEXTECHNOLOGIESALWAYSPRODUCEUNEXPECTEDRISKALONGWITHAVAST ARRAYOFBENElCIALGOODSANDSERVICES4HESEUNEXPECTEDRISKSCANNOTBE
EASILYCONTAINEDANDPRODUCETHEPOTENTIALFORTHREEMAINSOCIETAL LEVEL THREATSECOSYSTEMCOLLAPSElNANCIALCOLLAPSEANDCULTURAL POLITICALCOLLAPSE SEE$IAMOND(OMER $IXON !TTHEORGANIZATIONALLEVELTHE WEALTHPRODUCEDININDUSTRIALSOCIETIESTENDSTOACCRUETOCORPORATIONSBUT SODOESTHERISKANDCORPORATIONSMUSTABSORBTHATRISK3HELLSINFAMOUS ENCOUNTERWITH'REENPEACEINTHE"RENT3PARINCIDENTINISANAPT EXAMPLEOFHOWCHALLENGINGITISTOMANAGEPRECISELYTHEREPERCUSSIONSOF EVENWELL PLANNEDCORPORATEDECISIONSSEE7ATKINSAND"AZERMAN AND#HAPTERINTHISVOLUME
C )NTENTIONALATTEMPTSTO@JOLTAlELDORINDUSTRY4HESEINCLUDEEXTERNALEVENTS SUCHASMAJORREGULATORYORTECHNOLOGYCHANGESTHATIMPACTUPONENTIRE POPULATIONSOFORGANIZATIONS!CLASSICEXAMPLEIS-EYERS STUDYOF HOWACOMPLETELYUNANTICIPATEDPHYSICIANSSTRIKE@JOLTEDTHE#ALIFORNIA HEALTHCARE SECTOR DESTABILIZED LONG STANDING ARRANGEMENTS AMONG THE INDUSTRYPLAYERSANDFORCEDTHEMTOADJUSTINUNORTHODOXWAYS*OLTS@DISRUPT ORGANIZATIONALPROGRAMSCREATEPANICENERGIZEMEMBERSMOBILIZEADVOCATES FORCHANGEANDLEGITIMATEUNORTHODOXMOVES-EYERETALP *OLTSALSOENABLELEARNINGTHEY@CONSTITUTENATURALEXPERIMENTSNOTONLYFOR ORGANIZATIONALRESEARCHERSBUTFORPERCEPTIVEORGANIZATIONALACTORSASWELL -EYERETALP /THEREXAMPLESOFJOLTSORWHAT(OMER $IXON CALLS@SOCIALEARTHQUAKESINCLUDETHECREATIVEDESTRUCTIONOFlRMSAND VALUETHATCOMESWITHRADICALLYNEWTECHNOLOGIESASTHEYRESHAPECOMPETITION INANINDUSTRYOREVENTHEINDUSTRYITSELF"OWERAND#HRISTENSEN $!VENI
3YSTEM WIDEJOLTSMAYHAVEHIDDENDYNAMICSTHATMAYBESURPRISINGWHEN UNCOVERED*OLTSAREUSUALLYTHOUGHTOFASEXOGENOUSTOAPARTICULARlELDBUT ARECENTSTUDYBY#ANADIANSOCIALCRITIC.AOMI+LEIN REVEALSTHAT THEYMAYINFACTBEENDOGENOUS4HEMANAGERSOFSTATE OWNEDENTERPRISES IN#HILEAFTERTHEOVERTHROWOF!LLENDEINTHEMIDSORINPOST 3OVIET 2USSIADURINGTHEEARLYSWOULDHAVEBEENSURPRISEDTHATTHEIRlRMSHAD SUDDENLYBEENPRIVATIZED4HEYPROBABLYWOULDHAVEPERCEIVEDTHATJOLTAS ANEXOGENOUSFORCEnTHEAGGRESSIVEINTRUSIONOFCAPITALISMORGLOBALIZATION ONTHEIRSHELTEREDSOCIETY+LEINSANALYSISSHOWSTHATINREALITYTHEJOLTWAS ANINTENTIONALPOLICYOFTHERESPECTIVEGOVERNMENTSTOSHOCKTHENATIONS ECONOMICANDSOCIALSYSTEMSANDRECONlGURETHEMALONGNEO LIBERALLINES 3HECALLSTHISTHE@SHOCKDOCTRINE4HISSHOWSTHATSYNCHRONOUSFAILURECAN BEINTENTIONAL
D .ATURALANDMAN MADEDISASTERS(URRICANESEARTHQUAKESANDmOODSAFFECT lRMSACROSSTHEINDUSTRIALLANDSCAPESENDINGENTIRESECTORSOFANECONOMY INTOTEMPORARYSTATESOFEXTREMEUNCERTAINTY!SEFFECTSCASCADEHIDDEN CONNECTIONSBETWEENINDUSTRIESTHEFRAGILITYOFTHENATURALnHUMANINTERFACE 7EICK ORTHELIMITSOFORGANIZATIONALCAPABILITIESAREOFTENREVEALED
(OMER $IXON&ARJOUNAND3TARBUCK )NTHISWAYNATURAL DISASTERSCANPRODUCESOCIALANDORGANIZATIONALDISRUPTIONSOFIMMENSEAND LONG LASTINGIMPACTEGTHEONGOINGAFTERMATHOF(URRICANE+ATRINA ! CURRENTEXAMPLEISCLIMATECHANGEANDTHESYSTEMICPROBLEMOFINCREASING DEMANDFORECOLOGICALFOOTPRINTSPACE4HISCATEGORYALSOINCLUDESSUCH EVENTSASACCIDENTALRELEASESOFTOXICSUBSTANCESANDNEWORGANISMSASWELLAS DISEASEOUTBREAKSTHATSEVERELYIMPACTUPONORGANIZATIONSANDTHEECONOMIES OFENTIRENATIONSANDREGIONS-AN MADEDISASTERSSUCHASTERRORISTATTACKS AREDIFFERENTFROMTHEINTENTIONALDISRUPTIONSDISCUSSEDINB ORC BECAUSE OFTHEIRPERVASIVEBOUNDARY JUMPINGCHARACTER#UNHAETAL CALLSUCH INCOMPREHENSIBLESURPRISES@LOSSESOFMEANING
7ERECOGNIZETHATTHEFOURCATEGORIESOFCONTEXTUALDISRUPTIONDESCRIBEDABOVE MAYNOTBEMUTUALLYEXCLUSIVE4HESEAREHIGHLYCOMPLEXEVENTSPHENOMENAAND CANHAVESEVERALSOURCES&ORORGANIZATIONSTRYINGTOSTRATEGIZEANDTHRIVESUCH DISRUPTIONSWILLBESEENAS@DISCONTINUITIESnEVENTSORPERIODSOFSHARPORGRADUAL UNEXPECTEDDISTURBANCESTOTHENORMALmOWOFOPERATIONSANDTHENORMALPURSUIT OFSTRATEGICGOALS
)TISSOMETIMESDIFlCULTTOMAINTAINTHEDISTINCTIONSWEHAVEDRAWNBETWEEN COMPETITIVEANDCONTEXTUALFORMSOFDISRUPTIONSANDAMONGTHEVARIOUSSOURCES OFCONTEXTUALDISRUPTION4HISISPARTLYBECAUSEDIFFERENTMANAGERSPERCEIVETHEIR SITUATIONSWITHDIFFERENTDEGREESOFSKILLANDACCURACY#UNHAETALP DElNESURPRISESTHATAFFECTMANAGERSAS@ANYEVENTTHATHAPPENSUNEXPECTEDLY ORANYEXPECTEDEVENTTHATTAKESANUNEXPECTEDTURN3IMILARLYFOR&ARJOUNAND 3TARBUCKP @SURPRISESOCCURWHENORGANIZATIONSTRYTOEXCEEDTHE LIMITSOFTHEIRCAPABILITIES /URPOINTISNOTTHEOBVIOUSONETHATSURPRISESTHEMSELVESAREPERCEIVED
DIFFERENTLYALTHOUGHTHATMAYBETHECASE!NYCOMPETENTlRMSSTRATEGICPLANS WILLBEABLETOTAKEINTOACCOUNTEXPECTEDCHANGESBUTNOTTHEUNEXPECTED SURPRISES7ATKINSAND"AZERMAN&ARJOUNAND3TARBUCK 4HROUGH LUCKORSUPERIORSCANNINGSKILLONElRMMAYEVENANTICIPATEANEVENTSUCHASA TERRORISTATTACKTHATITSCOMPETITORSMISS)NSTEADWEARESUGGESTINGTHATWHAT MATTERSMOREISTHEDIFFERENCESINTHEMEANINGSTHATDIFFERENTMANAGERSATTACHTO SURPRISES@5NEXPECTED@SUDDEN@CAPABILITIESAND@LIMITSMAYMEANDIFFERENT THINGSTODIFFERENTPLAYERSINANINDUSTRY 7HYDOTHESEMEANINGSDIFFER7EARGUETHATITISBECAUSEOFDIFFERENCESIN
ADAPTIVECAPACITYTHATMANAGERSTHINKTHEYHAVE!DAPTIVECAPACITYIS@THEAMOUNT
ANDVARIETYOFRESOURCESANDSKILLSPOSSESSEDBYANDAVAILABLEWITHINAMEMBERS ENVIRONMENTFORMAINTAININGITSVIABILITY-C#ANNAND3ELSKYP )N TERMSOFCOPINGWITHTHEUNEXPECTEDTHOSERESOURCESANDSKILLSINCLUDELEARNING ROUTINES KNOWLEDGEMANAGEMENT SYSTEMS AND THE ABILITY TO EXECUTE LARGE CHANGEPROCESSESANDTOMANAGEDYNAMICSETSOFEXTERNALRELATIONSHIPS!DAPTIVE CAPACITYALSOINCLUDESTHEABILITYTOMOBILIZE@COLLECTIVERESOURCESALONGWITHOTHER PLAYERSINTHESAMElELD"ECAUSEADAPTIVECAPACITIESVARYFROMORGANIZATIONTO ORGANIZATIONDISRUPTIVECHANGEAND THEREFORE ENVIRONMENTAL TURBULENCE IS EXPERIENCEDUNEVENLY-C#ANNETAL !NEXAMPLEISHOWDIFFERENTMANAGERSlXTHEBOUNDARYBETWEENPREDICTABILITY
ANDUNCERTAINTY4HISBOUNDARYISMALLEABLE7ATKINSAND"AZERMAN 3OMEMANAGERSMAYDECLARECERTAINJOLTSSTEP FUNCTIONSHIFTSOROSCILLATIONSTOBE UNPREDICTABLEFRAMETHEMAS@NON LINEAROR@DISCONTINUOUSANDBEYONDTHEPALE OFTRADITIONALSTRATEGICPLANNINGTHENREACTPOORLY/THERSMAYlNDSUCHCHANGES WITHINTHEIRLEARNINGCAPACITYANDRESPONDPROACTIVELYTOTAKEADVANTAGEOFTHE NEWLYSEENOPPORTUNITY4HUSDIFFERENCESNOTONLYINHOWMANAGERSPERCEIVE ENVIRONMENTALEVENTSANDCONDITIONSBUTALSOHOWTHEYMAKESENSEOFTHEMBASED ONTHEADAPTIVECAPACITIESTHEYTHINKTHEYHAVEPRODUCEVARYINGCOPINGRESPONSES ANDULTIMATELYPERFORMANCEDIFFERENCESAMONGINDUSTRYPLAYERS4HISISTHEKEY CHALLENGEOFNAVIGATINGTHETURBULENTENVIRONMENT 4HE!-!(2) SURVEY SHEDS SOME LIGHT ON THESEDIFFERENCES IN
UNDERSTANDINGTHEENVIRONMENT)NONEQUESTIONWEDElNEDDISRUPTIVECHANGEAS @SEVERESURPRISESANDUNANTICIPATEDSHOCKSTHATMAYSIGNIlCANTLYDESTABILIZETHE ORGANIZATION7HENWEASKEDRESPONDENTSTOASSESSTHECURRENTDISRUPTIVENESSOF THEIRORGANIZATIONSENVIRONMENTCOMPAREDTOlVEYEARSAGOTHEYRESPONDEDASIN 4ABLE4HISSHOWSTHATPERCENTOFTHEOVERALLSAMPLERECOGNIZEDMORE DISRUPTIVENESS(OWEVERTHEPERFORMANCEOFTHElRMMATTERS7HEREASMORE THANHALFOFTHELOWERPERFORMERSRECOGNIZEDMOREDISRUPTIVENESSLESSTHANONE
4ABLE-ANAGERIALRECOGNITIONOFCHANGESINDISRUPTION COMPAREDTOlVEYEARSAGO
THIRDOFHIGHERPERFORMERSANSWEREDTHISWAY)NSIGHTSFROMTHESURVEYREGARDING ADAPTIVECAPACITYAREPROVIDEDINTHENEXTSECTION !LTHOUGHTHEPACEOFCHANGEISNOTTHEFOCUSOFTHISCHAPTERRESPONDENTSALSO
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