Academic journal article Journal of East European Management Studies

Serbian Companies Reactivity and Flexibility and Their Crisis Management Efficiency and Effectiveness *

Academic journal article Journal of East European Management Studies

Serbian Companies Reactivity and Flexibility and Their Crisis Management Efficiency and Effectiveness *

Article excerpt


Serbia has passed through a period of dramatic change during the previous fifteen years. However, this did not reflect fully on economic growth since the impact of the international financial crisis and numerous rounds of elections have slowed down necessary structural reforms in the country and led to a loose fiscal policy until 2014. More recently, there has been a greater fiscal responsibility and a reengagement on critical issues such as state owned enterprise reform, public administration reform, and public sector efficiency. In January 2014, Serbia started membership talks with the European Union (EU) after making significant progress in negotiations with Pristina, Kosovo.

Serbia has pursued these reforms while struggling to recover from the impact of the international financial crisis - which led to a 50% spike in poverty and a similar jump in unemployment in the country. As in many countries, the challenge in Serbia is translating a tenuous economic recovery into jobs and poverty reduction in a tight fiscal environment. As a result, Serbia needs to become more competitive and increase productivity in the country.

Going forward, Serbia's main challenge is to improve living standards in the country and transform economic recovery into jobs in a tight fiscal environment. Increasing exports, productivity, and competitiveness are recommended actions that can help propel the country's economic growth. So, according Alan Hilburg, (2014) a pioneer in crisis management, Serbia and Serbian companies are in chronic crises. Generally we can talk about crises of skewed management values in Serbia. It is caused by managers favoring short-term economic gain and neglecting broader social values and stakeholders other than investors. This state of lopsided values is rooted in the classical business (and politic) creed that focuses on the interests of stockholders and tends to disregard the interests of its other stakeholders such as customers, employees, and the community.

We consider crisis management as the application of strategies designed to help an organization deal with a sudden and significant negative event. A crisis can occur as a result of an unpredictable event or as an unforeseeable consequence of some event that had been considered a potential risk. In either case, crises almost invariably require that decisions be made quickly to limit damage to the organization. For that reason, one of the first actions in crisis management planning is to identify an individual to serve as crisis manager.

A universal maxim in crisis management literature is that crisis preparedness should be high on institutional and policy agenda (Seymour and Moore, 2000; Mitroff, 2003; Boin et al. 2009). The logic is that we need to give serious considerations to, and well-resourced and forward thinking contingency planning of unpredictable events if we want to tame crises and gain control over crisis situations (Elliott, 2009). There are numerous examples on which these arguments rest. Crises have the power (Parker et al, 2009) to destroy entire regions and cities (Hurricane Katrina and New Orleans, the Boxing Day tsunami in Southern Asia). They can be a huge threat to both human and animal populations (bird flu, SARS, BSE). Their consequences many be the extreme destabilisation of institutions, in some cases seriously damaging their legitimacy (UK Ministry of Agriculture, Fisheries and Food during the foot and mouth disease crisis). Crises may lead to the removal of public figures from office (FEMA Director Michael Brown after Hurricane Katrina). Crisis situations may lead to significant, often immeasurable damage to powerful interests (Enron, World-Com). Arguments for 'preparation' are even stronger when we consider the argument of futurist Schwartz (1987), who states that current trends in technology, population changes, medicine, terrorism, ethical conflicts and such, or, the manufacturing of 'inevitable surprises' are, to a large extent, predictable. …

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