Organizational resilience

economic-dictionary

Organizational resilience is the ability of an organization to face complex and unfavorable scenarios, and adapt to the changes that these situations require.

Organizational resilience is a concept that arises from adapting the term resilience to the world of the economy and business. Thus, resilience, in psychology, is the ability of an individual to overcome traumatic situations. In the same way, adapting the term to the business world, organizational resilience is the ability of a company to overcome difficult, unfavorable situations that require adaptation by the company to achieve its objectives, a form or another.

Experts in disciplines such as Business Economics often refer to the fact that we live in an increasingly complex and changing world. In this sense, companies, faced with this new scenario, must be agile to adapt to this volatile scenario and not be left behind. For this reason, these same experts often say that companies should work to improve their ability to adapt, a capacity that they, over time, have called "organizational resilience."

This resilience, as we know, increases as our resources and strengths grow, or our obligations and weaknesses decrease. Therefore, we must be aware that resilience will be motivated by various factors to take into account, such as the solvency of the company, the ability to adapt its structures in crisis situations, as well as other factors that directly affect the firm.

A company with a dynamic structure of 50 people, without debt and with the resources to endure months without operating at full capacity, is not the same as a firm that, on the contrary, has a very fixed structure, of 1,500 employees, with volumes high debt, and no liquidity to continue their activity without receiving income.

Characteristics of organizational resilience

Once we know the term, let's see its main characteristics to strengthen knowledge:

  • It is an ability, or a skill.
  • It refers to companies, and their capacity or ability.
  • It is the adaptation of the term resilience to the world of the company.
  • It refers to the ability of a company to adapt to unfavorable or complex scenarios.
  • Because the environment is increasingly changing, we are talking about a concept that has gained relevance over time.
  • This resilience is conditioned by a series of factors to take into account.
  • In the same way, by altering these factors, we can work to increase this resilience.
  • The ability of a company to overcome a crisis, for example, is organizational resilience.

Factors influencing organizational resilience

As we know, there are factors that condition this resilience. Thus, we must know that these factors can be psychological, such as having a motivating leader, or they could be material, such as having the resources to face a crisis. For this reason, it should be noted that, although some are discussed below, there are many factors that influence this resilience.

Among the factors that influence this ability of companies to face complex scenarios, the following should be highlighted:

  • Structure.
  • Templates.
  • Wages
  • Means.
  • Obligations.
  • Indebtedness.
  • Credit quality.
  • Human talent.
  • Good team work.
  • Intelligence.
  • Staff training.
  • Resolutive capacity.

Importance of working on resilience

Given that there are a series of factors that condition organizational resilience, we must know that, by altering these factors, resilience, in the same way, will be altered.

For this reason, it is convenient to emphasize that resilience can, and should, be worked on. In this sense, companies have to focus on becoming resilient and capable of adapting to any situation. In addition, in an increasingly dynamic world, it is essential that companies adapt faster and faster to the scenarios that arise.

Thus, if we work to control our debt, to control resources and guarantee a working capital for adverse scenarios; if we make an effort to select the right human team, and above all we provide them with training so that they are more capable; If, in short, we focus on correcting the imbalances that the company presents and, therefore, increasing our strengths, this resilience, with the passage of time, will be greater and greater.

Taking into account the previously mentioned factors, it is convenient to clarify that it is these same factors, as well as many others, that we must work on to improve this resilience.

The opposite of resilience, vulnerability

As we know, a company that does not present organizational resilience therefore presents vulnerability. In this sense, resilience, as we said, is the ability of a company to adapt to unfavorable scenarios or situations.

However, if this company does not have that ability, or that adaptability, this company is more vulnerable. For this reason, reducing vulnerability and imbalances is the same as working on resilience, since we are talking about two opposite concepts.

Organizational resilience example

Finally, let's look at a simple example of what a resilient company would be and what it would not.

Let's imagine that we have a digital company, with a structure of reduced fixed costs, a workforce of 25 workers who can operate independently from where they are, as well as liquidity, for having saved in times of bonanza. This allows us to maintain costs without receiving income for one year.

All these factors, in a scenario in which a pandemic is unleashed, and we cannot operate, allow the company to adapt to the new scenario and continue with its activity. The dearth of weaknesses makes this company very resilient, and it can adapt to the new environment with ease.

Let's imagine, on the contrary, that we have the same company, but, instead of having everything digitized, we have a fixed operations center in an industrial estate, where 150 employees work. In addition to the cost of 150 workers, this work center has a monthly cost. This forces us to maintain a fixed income to finance it. And to all this, suppose we must add the fact that the company has a high debt.

Tags:  did you know what present administration 

Interesting Articles

add