Abstract:
Financial and economic crises are part of the external environment of an organization, "ecosystem", and affect organizations’ ability to survive in susceptible periods. Crises are unpredictable events but they are not unexpected. Thus, surviving companies are not the strongest ones, but the ones that can adapt themselves to any unexpected change in the ecosystem well. Scenario development, as part of strategic planning, is a very useful instrument that provides strategic flexibility and agility for the organization. The aim of the study is to explore the best approaches to improve resilience in organizations during economic crises. Turkey experienced five major economic crises since the 1970s. Despite the previous crises, Turkey has proved the resiliency of the country’s economy in the face of the ongoing global economic crisis. So, being an experienced emerging country, Turkey would be an interesting case for the purpose of the study. Organizations’ reactions to the crisis of 2008 and economic performances of selected companies from real and financial sectors in Turkey are analyzed by focusing on similarities and differences in the strategic planning and scenario development activities. Their plans to cope with the crisis and outcomes of their practices are discussed to determine the best way to conduct business during the economic crisis of 2008. The main contribution of the study is to provide empirical evidence that proves strategically flexible and agile companies survive better during the global economic crisis. Second, policy recommendations are developed to help companies to build their preparedness in the face of 2008 crisis. This study clarifies the reasons of economic crisis and the ways economic crisis spreads out to the other economies from both perspectives of developed and emerging countries. Besides, we emphasize the benefits of strategic planning and scenario development activities for organizational economic performance during the economic crisis. Our analysis on a sample of companies from Turkey shows that companies in Turkey employed strategic planning and scenario development as a tool to survive during the period of the 2008 economic crisis. The banking industry of Turkey was strategically the most flexible industry. Energy and automotive industries are also strategically flexible, but not as much as banking industry. Results show that the more the strategic flexibility and agility company has, the more increase in profits it generates during the crisis period. Interestingly, in banking and energy industries having an emergent view of strategic planning may not be supported by the investors of those companies and lead to lower performance in stock market even when the company generates higher profits. However, in all cases, results showed that more emergent view of strategy leaded to higher increase in company profits. Therefore this study suggests that strategic planning and scenario development provides the organization with strategic flexibility and agility in order to survive on economic crisis.
