A Systems Approach to Crisis Preparedness and Organizational Resilience

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Case development scholarship application

Case Title? Mastitis at Lácteos Costeno

Why do you believe your case will be distinctive?

To the best of my knowledge, no case like this exists, and no teaching materials whatsoever exist to teach this, even though crisis is such a critical element of the entrepreneurial experience, and the entrepreneurial experience so vividly illustrates business/career crisis for almost all aspiring professionals.

How will the scholarship help you write your case?

As I'm sure you realize, many institutions, including that which granted my PhD (MIT '98) and that which has employed me for 14 of the 16 years since (University of Pennsylvania, 2000-present), do not value case-writing. Neither provide any institutional support, only the critically decisive disincentives of severely demanding competing obligations.

Still, like most of my colleagues, and especially those who strive to be good teachers, I use cases in classes. I have good training and experience with case instruction. While still at MIT, I sat in on Harvard classes to learn how to teach, and did case teaching/ writing workshops.

So it’s all the more frustrating, then, when, I come across a situation that really does illustrate a teaching point I’d like to make, especially, as is so often the case, no good alternative can be found.

So, despite the disincentives, I write my own cases. Several of these, like Mastitis at Lácteos del Pacífico, work extremely well in the classroom. I’d love to prepare them for others with proper teaching notes – to publish and disseminate them, but this takes time and support.

Your supervisor (Our scholarship case writers must have a supervisor, for example a senior member of staff or more experienced colleague.) Please provide details of your case writing supervisor:

Dont have one -- Would like your help to find a suitable supervisor.



Describe your proposed case, including the subject, learning objectives, and any further research you need to do.

In this case, Braulio, a 35 year old Central American entrepreneur, faces a crisis in his nine-month-old business -- and perhaps the crisis of his career -- when he learns that the dairy products his firm has distributed are contaminated.

Entrepreneurs inevitably face enterprise-threatening crises, and even career-threatening crises, but few are even remotely prepared. The heart of the discussion focuses on what the protagonist, , does or can do during, before, and after the crisis. With discussion and supplementary readings, students can begin to understand
• what happens in a crisis
• how to better cope with the resultant stressors, emotions, and other pressures.
• how to prepare for a crisis (to avert it or to mitigate one that occurs anyway), and, ultimately
• how to learn and grow stronger from crisis.

The case can be used in a course on:

  • Crisis Management: The entrepreneurial experience so vividly illustrates business/career crisis for almost all aspiring professionals.
  • Entrepreneurship: To help entrepreneurs and would-be-entrepreneurs think through the issues of how to manage during, before (to mitigate or avert) and after (to learn from) a crisis.

Set in Central America, the case presents developing world students with a situation from a familiar milieu; for students in North America and Europe, the case helps present a picture of life and business in the developing world.

For each of the three broad themes, (1) Managing during the crisis, (2) Preparing for crisis, and (3) Managing after the crisis, the case illuminates several important themes:

1. Managing during the crisis

1.1. Crisis Perceptions and Tendencies: what’s Useful and what’s Maladaptive

What does it feel like to be in Braulio’s position? Fear (of repercussions), Confusion, Guilt, Panic, and Remorse.

What about the team’s Cognitive processes? Are they thinking clear? Some of these emotions are useful, but guilt and confusion can paralyze; panic and fear can cut off clear thinking. I might probe these further and possibly relate them to prior readings:
• Fear and panic ? Threat-rigidity -- restricts options, and can lead to maladaptive response (Staw et al 1981; Sutcliffe & Vogus 2003)
• Pessimism (Braulio) – Positive Psychology readings
• Confusion ? Paralysis
• Wishful thinking (Rubén) –
• All-or-nothing thinking, selectively filtering (bad/good) data. (Kahneman & Tversky; Beck)

1.2. What principles might we follow during a crisis?

This is very hard to develop. I put comments on a sideboard, because most of the suggestions really are about what should have been done before. When students mention the lack of precaution, I emphasize that once you’re in the crisis is not the time to start thinking about what should have been done. Students may offer specifics: “Get the items off the shelf.” “Figure out what’s going on” “Inform the customers.” Or they make bland suggestions such as “Get advice” TO get a better grip on how to deal with it, I like to break down the subject.

What can he actually do?
Try to neutralize unhelpful emotions and cognitive tendencies
Focus on the problem: what can be done? What needs to be done? What are the priorities?

One good Meta-Principle is to figure out what are the priorities

This is a central question of crisis management. I would want to contrast Braulio’s (implicit) priorities, with a well-considered set of priorities
Braulio’s (implicit) priorities seem to be:
• Discovery of the source of the problem
• Get items off the shelves/Minimize awareness of the problem
What are driving these priorities?
• Fear about professional reputation – that it could be ruined ? Discovery of the source
• Fear about the business – also, that it could be ruined that it ? Get items off the shelves

1.3. What are the priorities?

Thinking it through, what would your priorities be?
What would Lerbinger (2012) or Mitroff (2002) advise?

Mitroff’s priorities seem to be:
a. Avoid loss of life
b. protect people from illness
c. Minimize damage; avoid possibility of a secondary crisis.

This leads to a more clear set of action items:
a. Get the word out! Don’t try to cover up the problem.
b. Learn what is wrong. Learn who might have ingested damaged products.
c. Remove all potentially damaged products.

1.4. Summary: Managing during the crisis

• Know what you’re feeling; know what others are feeling and don’t let these be the cause of a secondary crisis.
• Know your priorities. Think them through, and then act on them.
• Get all the relevant information (who might be vulnerable, or hurt?)

2. Management before a crisis

Nearly everyone agrees that LdP should have anticipated, and prevented, this particular problem; and also that the partners could have generally been better prepared. .

2.1. Why the problem?

Specific causes
• Insufficient priority on quality control
• Lack of a skilled quality control worker (Braulio could not consider his students, who were the
only trained people in the area, because of his desire for secrecy about this role in the business.)
• Turnover among production workers

More General causes
• Clearly established procedures
• Absentee management
• Systems & Control/ Markers. “The partners had planned to acquire the necessary equipment and hire
a laboratory assistant to exclusively perform quality control when the production level reached a
thousand liters daily.” However, by August 2002--with production at 1,200 liters/day--they still had not
done so. They need a system for kicking in plans when dates or markers are met.

2.2. Avoiding this crisis
Had any one of the above factors been otherwise, this crisis would probably never have happened. Crisis
is often the confluence of MANY shortcomings, any one of which could have checked the problem.
By instituting these procedures now, they are likely to avoid the same problem.

2.3. General Preparation

A communications plan to contact (a) Braulio; (b) employees; and (c) Customers
Crisis Practice
Scenario Planning
Crisis Plan (with clearly established Priorities and action plan)
Crisis management audit

3. Management after the crisis

3.1. What should they do?

Implement preparations that should have been implemented before the attack
Forensics to determine what exactly happened
Accelerate quality plans
Post crisis audit

3.2. What did they do?

Questionable actions / losses
• Tried to cover up the problem where it wasn’t already known.
• Lost two best clients

• Apologized, assured and reassured pulperías

Opportunistic actions
• Used the crisis as an opportunity to implement Quality Control plans both in the firm – and at the source


Lerbinger, Otto (2012). The Crisis Manager : Facing Disasters, Conflicts, and Failures (Hoboken, NJ : Taylor and Francis)

Mitroff, Ian I. (2002). The Essential Guide to Managing Corporate Crises (Oxford University Press)

Sutcliffe, Kathleen and Tim Vogus (Sept. 2003). Organizing for Resilience. Chapter 7 of Positive Organizational Scholarship (San Francisco: Berrett-Koehler). Cameron, K., Dutton, J.E., & Quinn, R.E. (eds.)

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Date Page Created: Apr 12, 2015 Last Page Update: Apr 12, 2015