How to set expectations in a global pandemic:
An exploratory study on the impact of COVID-19 on
aspiration level formation in crisis management
in a B2B environment
Master Thesis Student: Tom Christian Krause
RUG student-number: S4140265 NUBS student-number: 190583538
First supervisor: Dr. Niels Pulles Second Supervisor: Dr. Qionglei Yu
Word count: 14.079 (excluding references)
Faculty of Economics and Business at University of Groningen
RUG course number: EBM028A30 Newcastle University Business School
at Newcastle University NUBS course numberNBS8399
Abstract
The global COVID-19 crisis introduced companies to new challenges and shifting environments. Managers are forced to set new expectations and aspiration levels. Since the introduction of the behavioral theory of the firm in 1963, the views on the aspiration level formation process has not changed. This research analyzed eight cases regarding changes between in-crisis and pre-crisis decisions. As a result, two new aspiration level formation factors were discovered. Additionally, the influence of the crisis seems to be based on the crisis phase, with the most influence in the acute crisis phase. This builds a fitting addition to the current literature and opens the door to future research in the field of the behavioral theory of the firm.
I. Table of Content
I. Table of Content ... I II. Table of figures ... II III. List of tables ... II
1. Introduction ... 1
2. Theoretical background ... 2
2.1 Crisis Management ... 2
2.1.1 Crisis definition ... 2
2.1.2 Crisis management strategies ... 3
2.2 Performance aspiration level formation ... 4
2.3 Performance aspiration formation in crisis situations ... 5
2.4 Theoretical Framework ... 5 3. Methodology ... 6 3.1 Case selection ... 6 3.2 Data collection ... 7 3.3 Data analysis ... 9 3.4 Quality criteria ... 10 4. Findings ... 11
4.1 With-in Case Analysis ... 11
4.1.1 Case ServiceDev1 ... 12 4.1.2 Case ProductDev1 ... 13 4.1.3 Case ServiceDev2 ... 14 4.1.4 Case HR1 ... 16 4.1.5 Case BusinessDev1 ... 17 4.1.6 Case HR2 ... 18 4.1.7 Case OM1 ... 19 4.1.8 Case OM2 ... 21 4.2 Cross-case Analysis ... 22 5. Discussion ... 24 5.1 Theoretical implications ... 24
5.1.1 Aspiration level formation factors ... 24
5.1.2 Managerial decision making in crisis management ... 25
5.2 Managerial implications ... 26
5.3 Limitations and future research ... 26
6. Conclusion ... 26 IV. References ... IV V. Appendices ... VII
II. Table of figures
FIGURE 1:THEORETICAL FRAMEWORK AS DERIVED FROM THE LITERATURE ... 6
FIGURE 2:THEORETICAL FRAMEWORK WITH HIGHLIGHTED AREAS THAT THE FINDINGS FOCUS ON
... 11
III. List of tables
TABLE 3.1:OVERVIEW OF CONDUCTED INTERVIEWS ... 7
TABLE 3.2:OVERVIEW OF SELECTED CASES ... 7
TABLE 3.3:OVERVIEW OF THE LINK BETWEEN THE THEORETICAL BACKGROUND AND THE
INTERVIEW PROTOCOL ... 8
TABLE 3.4:INITIAL CODING SCHEME ... 10
TABLE 4.1:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE SERVICEDEV1 ... 12
TABLE 4.2:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE PRODUCTDEV1 ... 14
TABLE 4.3:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE SERVICEDEV2 ... 15
TABLE 4.4:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE HR1 ... 16
TABLE 4.5:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE BUSINESSDEV1 ... 17
TABLE 4.6:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE HR2 ... 18
TABLE 4.7:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE OM1 ... 20
TABLE 4.8:OVERVIEW OF ASPIRATION LEVEL FORMATION FACTOR BETWEEN IN- AND PRE-CRISIS DECISIONS FOR CASE OM2 ... 21
1. Introduction
Recently the COVID-19 pandemic and its social, political and economic implications have shocked the world. As of the writing of this thesis, the pandemic is still ongoing, and the scale of the impact cannot yet be finally determined nor analyzed. The pandemic has an unprecedented impact on the economy, causing production stops and new regulatory restrictions around the world. Companies try their best to survive the threat posed by the pandemic itself and the recession caused by it (IMF, 2020).
In such a crisis, dropping performance levels are expected. If performance levels drop below aspiration levels, problemistic search is triggered according to the behavioral theory of the firm (BTOF). Problemistic search is the seeking of a solution that elevates the performance level (back) to or above the aspiration level (Cyert and March, 1963; Banerjee et al., 2019; Deb et al., 2019). The BTOF is a theory developed by Cyert and March (1963) and prior March and Simon (1958) as a contrast to the neoclassical theory of the firm. Neoclassical theory of the firm assumes rationality and perfect information regarding any given decision, whilst BTOF introduced limited human rationality and imperfect information-processing capabilities. In times of crisis, rationality is shown to be even further bounded, due to the lack of relevant previous experiences and familiar heuristics (Moynihan, 2008). This is an important issue, because one of the most important factors to successfully manage a crisis is timing, since a quick reaction to an emerging crisis can significantly reduce its impact (Darling, 1994). Likewise different phases in a crisis call for different decisions (Fink, 1986; Darling, 1994). Another important factor in successfully managing a crisis is making the right decisions, but how are decisions made in a crisis?
An analysis of all available options to choose the optimal one is prohibited by the urgency of a crisis. Hence, a crisis is characterized by its turbulence (Hamel and Valikangas, 2003; Moynihan, 2008) and uncertainty (Van Der Vorst and Beulens, 2002; Moynihan, 2008). Thus, it is important to understand how goals and aspirations are formed in a crisis, in order to understand how decisions are made. Our best source of knowledge is usually learning from observation of others and own historic experiences (Senge, 2006). Henceforth, the BTOF acknowledges both, own historic performance and historic performance of the competition as two of the three main factors for the aspiration level formation. The third factor is own historic aspiration levels. This however leads managers to reuse known solutions to newly arising problems (Staw et al., 1981; Stern, 1997; Katila, 2002; Fleming and Sorenson, 2004). This effect is increasing in complex situations (Puranam et al., 2015) especially a crisis (Gilpin and Murphy, 2008). The applicability of the known solutions depends on the key characteristics of the crisis. Therefore, if a crisis significantly differs in its key characteristics from the settings of the known solutions, reusing known solutions may pose an additional risk-factor to the organizations performance (Moynihan, 2008). Which underlines the importance of thorough understanding aspiration level formation in times of crisis.
research about the process of decision-making in times of a crisis. Therefore, this research is trying to answer the following research question:
“How does the COVID-19 crisis affect managerial decision-making and aspiration level formation?”
This research contributes to both streams of literature, the stream of the BTOF as well as the stream of crisis management literature. It does for the BTOF literature, by uncovering two additional factors in the aspiration level formation process and how they are used in the cases studied in this research. This contribution allows to further understand managerial decision making, through the growing understanding of aspiration level formation as the starting point of problemistic search, but also as the end point of the search. Still further research is needed to fully understand aspiration level formation and the interaction between the different factors, but this research is the first step in this direction.
The second contribution form this research is towards the crisis management theory. The study shows that a global pandemic, such as the COVID-19 crisis, influences managerial decision making and suggests reasons for this behavior. Again, further and quantifiable evidence is needed to generalize these contributions, but this research shows that there is a difference in decision making between a crisis situation and normal circumstances. Moreover, it shows there is evidence this difference is due to the different crisis phases a decision is made in as well as the perceived influence on the crisis on the decision maker. Which leads to the idea that top managers might be able to shield their employees and decision makers at least partly from the crisis influence and pressure.
This thesis consists of 6 chapters, this introduction being the first. In chapter 2 the necessary definitions and an overview of the theoretical background are given. Followed by chapter 3 in which the research methodology is explained. Chapter 4 shows the findings of the analysis and chapter 5 discusses the findings in the context of the theoretical background presented in chapter 2. The last chapter of this research, chapter 6, is a short conclusion.
2. Theoretical background
This chapter introduces the relevant theoretical concepts, their origins and developments. Therefore, initially the characteristics of a crisis and the appropriate management mechanisms are introduced, followed by a section about the BTOF, in particular performance aspirations and their role in problemistic search and crisis management.
2.1 Crisis Management
The following two sections will introduce the characteristics of a crisis in 2.1.1 and present ways to manage them effectively in 2.1.2, derived from the literature.
2.1.1 Crisis definition
In the operations management literature, a crisis is defined as a temporary disruptive event to the operational processes (Smith, 2004; Briano et al., 2009). The cause for such a disruptive event can be divided in external and internal risks, where the internal ones can be avoided through mitigation mechanisms whereas the external ones cannot be completely avoided, just the impact can be reduced (Wu et al., 2006). Additionally, a crisis can vary in its scale, ranging from a local to a regional or global impact on one or many organizations or supply chains. For example, a crisis impacting one organization, caused by an unforeseen and unaccounted for event like the sudden loss of a major client differs significantly from crisis that affect entire industries or even economies and shock the world market, for example the financial crisis in 2008 (Lee and Makhija, 2009; Zona, 2012; Yu and Lindsay, 2016) or the current COVID-19 pandemic and its expected economic aftermath (Fernandes, 2020).
as the changing field of competitors through bankruptcies as well as market share loss. Organizations cannot cruise on their historic success, but need to constantly evolve with the market, a crisis only magnifies this effect (Hamel and Valikangas, 2003). Van Der Vorst and Beulens (2002) analyzed the sourcing decisions under uncertainty and showed, that uncertain circumstances of the operation cause numerous non-value-adding activities or inefficient processing. Hence, the focus is distracted from the core decisions. In every crisis there is some level of uncertainty, as for example additional questions regarding the stability of demand and supply arise (Van Der Vorst and Beulens, 2002). The COVID-19 pandemic caused a significant amount of uncertainty, especially since a global pandemic most likely has not been accounted for in the risk management of most organizations (Rapaccini et al., 2020). The last main factor to describe the impact of a crisis is the threats posed by the crisis to the operation or supply chain. The severity of the threat posed by the crisis is an important factor (Sheffi, 2001; Sheffi and Rice Jr, 2005) and will depend on the operations type (manufacturing vs. service provider), the industry and the location of the organization (Rapaccini et al., 2020). For example, during the March of 2020, the north of Italy was heavily impacted by COVID-19, causing production stops for manufacturing operations, whereas some service providers could work remotely from their homes and manufacturers in other countries could keep production running (Rapaccini et al., 2020).
2.1.2 Crisis management strategies
It is commonly agreed upon in the literature, that a crisis can typically be divided into four phases: the prodromal crisis phase, the acute crisis phase, the chronic crisis phase and the crisis resolution phase (Fink, 1986; Darling, 1994). It is important for managers to acknowledge each phase while it is occurring in order to manage the crisis successfully (Darling, 1994).
The prodromal crisis phase is the warning phase, the upcoming crisis can be predicted, and the first symptoms are showing. In this stage it is important to act, because the crisis is still building up and mitigation strategies can pay off significantly during later stages and possibly even enable avoiding the crisis altogether (Fink, 1986; Darling, 1994). The COVID-19 crisis was not avoidable by a single organizations’ decision, but preparations were very much possible. In the second phase, the acute crisis phase, the crisis is at its peak and an impact cannot be avoided any longer. The main goal here is to manage the crisis in the best way possible to avoid long-term damages to the organization and its stakeholders. The third stage, the chronic crisis stage, is about processing the crisis, finding the origins of it and setting-up the risk management to avoid similar crisis in the future. The fourth stage, the crisis resolution phase, is about resolving the crisis and going back to the business as usual (Fink, 1986; Darling, 1994). Since, each phase calls for different actions and decisions timing is one of the most important factors in crisis management (Darling, 1994).
Next to the unique strategies for each phase of the crisis, the literature identifies further, more general crisis management strategies. In times of crisis the rationality of decision makers is more bounded than in normal times (Moynihan, 2008), meaning the additional influences of the crisis cause decision makers to act irrational. Combined with the uncertainty of a crisis, its pressure can lead to wrongly understood lessons (Boin et al., 2016). This is a major issue, because managers are shown to learn best from experience (Senge, 2006) and tend to recycle known and common solutions even when faced with unknown problems (Stern, 1997). However, this effect of bounded rationality is partly reversed if the decision maker feels personally accountable (Tetlock, 1992). Hence, organizations tend to reduce the number of decision makers to the core in times of crisis, as shown by Booth (2015) in a survey of UK executives of multinational corporations.
team member needs to communicate their current needs and basic approaches for each step and decision in a clear way (Uitdewilligen and Waller, 2018). This requires a variety of things but mostly trust and respect between team members.
One important factor in decision making in general, and therefore also in a crisis, is the relevant previous experience of the decision maker (Cyert and March, 1963; March, 1994). However, this is a risky factor as the key conditions in a crisis are not necessarily comparable to the usual and familiar circumstances (Moynihan, 2008). This emphasizes the tension between exploring new knowledge and exploiting old knowledge (March, 1991). Moynihan (2008) argued, a crisis requires exploration of new knowledge until the situation stabilized and is known again so that old knowledge can be exploited again.
2.2 Performance aspiration level formation
The increased bounded rationality of decision makers in a crisis and the novel and challenging circumstance, suggest the use of the BTOF to analyze the search behavior of decision makers in a crisis. Within the BTOF the search for new solutions is triggered by a problem and hence is called problemistic search. The search starts with the formation of performance aspiration levels (Cyert and March, 1963; Posen et al., 2018).
Performance aspiration levels are a mixture of goals and performance expectations. Schneider (1992) defined aspiration levels as “the smallest outcome that would be deemed satisfactory by the decision maker” (Schneider, 1992, p. 1053). They are viewed as the framing factor of interpreting performance as a success or failure (Milliken and Lant, 1990). Performance aspirations are the level of performance at which a problem is labeled as resolved and the decision maker can focus a different issue.
According to Cyert and March (1963) aspiration levels are influenced by three factors: first historical achieved performance of the firm, second the historical set aspiration levels and third, the achieved performance of comparable competitor firms. These factors are generally agreed upon in the literature (Posen et al., 2018). However, the influence of each of the three formation factors on the aspiration levels is still unclear. The initial work of Cyert and March (1963) only defined the components of the formation process of aspiration levels.
Lant (1992) argues that at the beginning of an operation or the change of circumstances, historic aspirations play a dominant role in the aspiration level formation. Whilst later on, when the circumstances of the new operation are more familiar, models for rational expectation formation are a better fit. Meaning the focus shifted from historic aspiration levels to historic performances as a dominant factor. A more recent approach investigated the aspiration formation and adaptation over time in an American financial services organization (Mezias et al., 2002). The quantitative study replicated similar results compared to Lant (1992). The authors have described the formation of aspiration levels as a “complex process that mixes anchoring and adjustment, boundedly rational response to performance feedback, and a response to social comparison information” (Mezias et al., 2002, p. 1297). Overall, aspiration levels appear to have an optimistic bias (Lant, 1992), since they are the positive expectations by which a decision can be classified a success.
2.3 Performance aspiration formation in crisis situations
There are opposing views on the impact of aspiration levels on crisis management in the literature. Since, it depends on the organizations decision of choosing a risk averse strategy to play a conservative role in the market or choosing a risk affine strategy and try to further develop the firms competitive advantage (Zona, 2012). Evidence for the risk averse strategy suggests that the increase in environmental uncertainty in a crisis is viewed as threatening and hence leads to conservative behavior (Chen and Miller, 2007). Additionally, firms are less prone to change their strategies at all (Wan and Yiu, 2009). The opposing view is, that the economic challenges cause firms to introduce risk affine strategies, given they have slack resources, because the see an opportunity to better position themselves in the market. This has been shown for both individual crisis (Greve, 2003) and global economic recessions (Zona, 2012). However, both strategies, risk affine and averse ones, should change the formation of aspiration levels, since a change in strategy alters the reference point for success or failure and this has shown to be an indicator for aspiration level formation (Milliken and Lant, 1990).
The influence of different factors on the aspiration level formation is shown to shift in a crisis from a focus on own previous aspiration levels to the performance of competitors (Ocasio, 1995; Blettner et al., 2015), since a crisis eliminates the relevant reference points within the own previous performance. Therefore, the attention shifts towards the current performance of competitors in a similar crisis situation. Furthermore, the scope of competition for comparison is narrowed down in a crisis, due to less resources being available for focusing on the competition (Ocasio, 1995). It is unknown if this shift in attention is also true for a global crisis such as the COVID-19 pandemic, as the study looked at individual crises.
In addition to a change in scope and factor weight in a cycle of economic recession, it is unlikely for firms to be able to raise performance back above the aspiration level. Thus, it is most likely for decision makers to lower their aspiration levels, or shift to a different goal altogether (Cyert and March, 1963; Deb et al., 2019). Evidence for this is found in manufacturing firms in northern Italy during the COVID-19 pandemic. Here, some companies shifted their attention to a servitization business model or to the digitalization of their current business model (Rapaccini et al., 2020). Such a shift would mean that entirely new aspiration levels are formed, in which case the aspiration level formation process will also change (Lant, 1992).
2.4 Theoretical Framework
Figure 1: Theoretical framework as derived from the literature
3. Methodology
This research sheds light on the unexplored issue, how the formation of aspiration levels is affected by the current COVid-19 crisis. As previously presented, there is some research about the formation of aspiration levels and how certain variables influence the formation process. However, there is insufficient evidence on the influence a crisis has on aspiration level formation. Hence, this research used an inductive approach in order to further build theory to fill that gap (Meredith, 1998; Barratt et al., 2011). The inductive nature of the research paired with the context of the BTOF is calling for the analysis of multiple case studies. The use of case studies has found a rising interest among scholars in operations management (Barratt et al., 2011). This is considered a good fit for this research, because the use of case studies allows for the in-depth analysis of single cases and provides an openness for factors used that are not yet included in the literature as well as the ability to sufficiently understand the interactions between these factors.
The existing literature was used to conduct this research and the theory derived from the research afterwards was developed in a purely inductive manner. This followed the “a priori” construct of theory designing research (Eisenhardt, 1989; Barratt et al., 2011).
3.1 Case selection
Interviews were made with 5 decision makers from 4 different organizations. Organizations A, B and C are consulting companies with different focuses. OrgA focusses mainly on the consultation of manufacturers from the aviation and automotive sector. OrgB focusses on the organizational transformation of customers from all sectors. OrgC focusses on the consultation of European firms opening plants and production sites in China. OrgaD offers work attire for manufacturing plants, supermarkets and hospital as a leasing service with maintenance and washing services included.
Name Organization Position of decision maker Duration
I1 OrgA Business Unit Lead 33 min
I2 OrgB Managing Director 39 min
I3 OrgC Business Unit Lead 42min & 8 min
I4 OrgA Managing Director 23 min
I5 OrgD Managing Director & Owner 44 min
Table 3.1: Overview of conducted interviews
Ideally, there would have been multiple interviewees per decision to reduce the bias from each decision maker. Unfortunately, due to timely and organizational matters this was not possible with any cases. Table 3.2 provides an overview of the cases and corresponding interviewees.
Case Interviewee Decision description Decision Category
ServiceDev1 I1 Transformation of on-site trainings to
virtual trainings Service development
ProductDev1 I1 Development of protective face-shields for medical personnel as a free give-away and marketing tool
Product development
ServiceDev2 I2 Transformation of on-site trainings to
virtual trainings Service development
HR1 I3 Restructuring of hiring process Human resources
BusinessDev1 I3 Pricing decision for tender offer Business Development HR2 I4 Reduction of human resource costs Human resources OM1 I5 Short time work to reduce negative
hour count Operations Management
OM2 I5 Sending all possible staff into home office
Operations Management Table 3.2: Overview of selected cases
3.2 Data collection
The data was collected in semi-structured interviews, because they allowed the researcher to adjust the interview protocol based on upcoming data (Barratt et al., 2011). Thus, fitting the inductive nature of the proposed research. The data collection period was from the beginning of September to the end of October. Due to local travel restrictions all interviews were conducted virtually.
table 3.3. Even though the questions are based on the concepts introduced in chapter two, the were kept in an open format and formulated in a way that does not require previous knowledge about the aspiration theory.
Theme Question Explanation
Market position
How would you describe concisely your firms’ current position in the market and its future ambitions?
Aspiration levels can be influenced by maturity and ambitions of the organization (Lant, 1992; Labianca et al., 2001; Labianca et al., 2009)
Crisis impact How was your firm impacted by COVID-19?
Follow-ups:
- How did you perceive the markets (customers and competitors) reaction to COVID-19?
- How did the uncertainty of the crisis impact your operation? - How you feel like the crisis
threatened your organization during?
The aim is to categorize the crisis in terms of uncertainty (Van Der Vorst and Beulens, 2002), turbulence (Hamel and Valikangas, 2003) and threats posed by the crisis (Senge, 2006).
Management Characteristics
How would you describe your previous experience with such issues? Did you deal with the issue alone or in a team?
Research has shown a difference in decision making based on experience (Cyert and March, 1963; March, 1994) and whether it happened in a group or not (Booth, 2015; Uitdewilligen and Waller, 2018).
Aspiration
level formation How did you go about searching for a solution to the problem? - How did you define your goals for the solution search? - How did you determine the
minimum requirements for the solution to be accepted?
These questions aim to find out the factors used in developing the aspiration levels, without giving away insides from the literature in the questions.
Outcome of the search
How would you describe the nature of the solution found?
- Novel vs preexistent - Risky vs conservative
Would you describe the solution a success or a failure? Why?
The acceptance and categorization of a solution depends on the aspiration level (Milliken and Lant, 1990). Comparison of pre-crisis and crisis aspiration level formation
If you think back to a similar decision (to one of the cases), can you describe the solution search for that?
If any, how would you describe the difference in handling the solution search before and during the COVID-19 crisis?
Interviews were all held in German, because all participants are primarily German-speakers. This was done to ensure the interviewees were as comfortable as possible and not limited in their answers by language barriers. The interviews were also analyzed in German, to ensure no information got lost in translation, only direct quotes necessary for the research were translated by the researcher.
3.3 Data analysis
The interviews were recorded and then analyzed using a directed approach to content analysis. The directed content analysis is used, when the goal of the research is to extend the knowledge on a certain framework (Hsieh and Shannon, 2005). In the case of this research the framework of the aspiration level formation is extended and analyzed under the special influence of the COIVD-19 pandemic. With the directed content analysis approach the data is coded based on the existing theoretical knowledge. This initial list of codes is complemented with codes that arise from the data itself during the coding process (Hsieh and Shannon, 2005). This approach was used, because the theoretical base is not yet sufficient enough to derive a complete coding system from it. The content analysis was carried out in the computer program NVivo 12.
Dimension Second Order First order
In-crisis decision
Aspiration level formation factors
Previous achieved performance of competitors
Previous achieved performance Previous aspiration levels
Outcome classification Conservative Success Failure Risky Conservative Organizational characteristics Individual decision Team decision
Relevant previous experience
Decision timing
Prodromal crisis phase Acute crisis phase Chronic crisis phase Crisis resolution phase
Decision Surroundings Crisis impact Threats Turbulence Uncertainty Market positioning Current market position
Future market ambitions Table 3.4: Initial coding scheme
After the coding, the cases were examined individually in a with-in case analysis and then analyzed in a cross-case analysis, where the similarities and differences between the cases are analyzed (Eisenhardt, 1989; Barratt et al., 2011). The with-in case analysis focusses on the factors used in the aspiration level formation of both the in-crisis and pre-crisis decision and explains where differences come from. The cross-case analysis then examines overarching themes between the cases.
3.4 Quality criteria
The qualitative nature of the proposed research requests a high degree of validity, which can be divided into construct validity and internal as well as external validity (Karlsson, 2010). The quality criterium of construct validity is given through the use of multiple cases and sources of information (literature and interviews). Additionally, the research question is requiring the data to be collected from the interviewee’s recollection, interviewing the decision makers directly ensures the highest data quality attainable. Whereas the internal validity is given through the theoretical ability to replicate the findings for each case analyzed. Furthermore, the influence of each additional case can be analyzed, since it’s a small number of cases being analyzed. The adherence to external validity is questionable. There are multiple cases being analyzed, but the overall number is still being reasonably small so that results are hypotheses for future research rather than theory generalizations.
of the research and the individuality of the different interviewees required a certain amount of flexibility in the terms of follow-up questions regarding the individual cases.
4. Findings
In the following section the findings of the case-study research are presented, as suggested by Eisenhardt (1989): first in an with-in case analysis and then in a cross-case analysis. The with-in case analysis focusses on the different aspiration level formation factors used in each case (see grey ellipsis in Figure 2 below) and the cross-case analysis focusses on the crisis related reasons for differences and overarching themes (see grey rectangle in Figure 2 below). The organizational influences are not further discussed, as the research show no novel findings in in this area or any relevant connection to the other findings presented. The key finding is that the aspiration level formation seems to depend on the crisis phase the decision is made in. In the acute crisis phase, the peak of the crisis, the decision makers become more self-focused and the performance of competitors does not play a role anymore, or at least a less important one. The main driver behind this appears to be relatively high levels of uncertainty as well as turbulences within the market. Whereas in the chronic crisis phase the aspiration level formation process normalizes back to pre-crisis behavior. However, the aspiration level in the chronic crisis phase seems to be lowered compared to the pre-crisis levels. Additionally, two further aspiration level formation factors have been discovered. The first factor is the anticipated future potential, which lowers the aspiration level to some degree in the case potential for future opportunities is seen in other areas. Furthermore, as the second factor, new regulations resulting from the crisis seem to significantly lower the aspiration levels.
Figure 2: Theoretical framework with highlighted areas that the findings focus on 4.1 With-in Case Analysis
In this section each case is presented individually and after a brief description of the in-crisis and the pre-in-crisis decision as well as the relevant circumstances a standardized table will give an overview of the included formation factors followed by an explanation with a focus on differences within each case.
to later enable a higher performance in the mid- to long-term. Furthermore, in the pre-crisis decision this factor mostly appeared in business development decisions were the decision made was supposed to lead to a new customer segment or higher sales. Whereas in the in-crisis decision, the factor of anticipated future potential, mainly appeared to ensure survivability or more flexibility in dealing with the extent of the crisis.
The second new factor observed in this research are crisis induced regulations. This factor was observed in 4 out of the 8 in-crisis decision and is very COVID-19 specific as mostly the travel restrictions caused lower aspiration levels, since the decision-makers often had insufficient experience with the virtual collaboration or knowledge of how customers would react to them offering their services virtually.
4.1.1 Case ServiceDev1
In this case a change in aspiration level formation factor between the in-crisis and pre-crisis decision is noticeable and occurred in the use of 3 factors. The in-pre-crisis decision is about the redevelopment of the trainings and workshop portfolio offered, because the travel restrictions due to COVID-19 prohibited the on-site execution of these trainings and workshops. Thus, I1 decided to digitize them in order to offer them virtually. This decision is compared to the pre-crisis decision to produce marketing videos to better communicate the distinct expert knowledge of the organization which was supposed to help position the organization as technical experts and not as an “commodity supplier” (I1).
This case took place at the perceived peak of the crisis. The travel restriction not only challenged the existence of the services offered, but also forced about a third of the organizations customers to cancel contracts. Additionally, the uncertainty of the duration and intensity of the crisis was high. Thus, this decision can be categorized in the acute crisis phase (Fink, 1986; Darling, 1994).
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
/ The video was supposed to
be made to the current market standard Previous achieved
performance
The aspiration was to create better trainings and workshops than previously
offered
/
Previous aspiration levels The development had to fulfill the same minimal aspiration as previous developments: being sellable
This decision was driven by the inability to achieve a previous goal. Thus, these previous aspirations play a
major role
Anticipated future potential / The decision was part of
reaching a strategic goal, so a clear understanding of the desired performance was
already there
Crisis induced regulations / /
For the factor of previous achieved performance, it was the opposite. This factor was included in the in-crisis decision but not in the pre-crisis decision. I1 said, that if they had to change the services offered, they wanted to create a better service and more standardized versions across all coaches. “The aim was to clean it out and do it better than before.” – I1. Therefore, the previous performance was a substantial formation factor for the aspiration levels. For the pre-crisis decision it was the lack of previous performance that triggered the decision in the first place, but this did not influence the aspiration level.
Moreover, the aspiration level was influenced by the previous aspiration levels, as the videos were supposed to transfer the same message to the viewer that the previous marketing channels could not deliver. For the in-crisis decision, the influence of the previous aspiration levels was similar. Every product or service developed needs to be first and foremost sellable. This was also the goal for this development. “The minimum goal was to be able to sell.” – I1.
The last difference in this case was found regarding the formation factor of anticipated future potential, as this was only used in the pre-crisis decision. This decision is an investment in the future and therefore as a low expected financial performance. “I think it is very good that we have them. So, it is a success. (...) It is simply more of a strategic fit and strategic success than a monetary success in the first step.” – I1.
4.1.2 Case ProductDev1
In this case the use of aspiration level formation factors did not change between the in-crisis and pre-in-crisis decision. However, the factor of anticipated future potential did again play an important role in both decisions. See Table 4.2 below for an overview of the case.
Table 4.2: Overview of aspiration level formation factor between in- and pre-crisis decisions for case ProductDev1 The aspiration level formation factor of achieved performance of competitors was used in both decisions. Moreover, the factor was used in a similar manner. In the in-crisis decision, the goal was to develop a product that was competitive in the market, since it was supposed to aid as a marketing tool and showcase the engineering and production skills of the organization. “And then we also sent them to hospitals and got feedback relatively quickly and the feedback I got was that ours were generally considered more comfortable to wear than the ones that already existed.” – I1. In the pre-crisis decision, the aim was to create marketing videos that were up to a modern standard, essentially meaning they need to be equal to or better than the competitions marketing videos. This was similarly done through an external source. “We asked media people from Cologne. (…) They also told us how such a video works and how it could be constructed” – I1.
Both decisions were held up to previously used standards and therefore included previous aspiration levels. The in-crisis decision needed to fulfil the performance that was also expected from previous business cases whereas the pre-crisis decision was mainly driven by the inability of previous communication measures to sufficiently transfer the organizations competencies. Thus, the aspiration level was set not to the previous performance, but the previous aspiration levels used.
The aspiration levels in the pre-crisis as well as the in-crisis decision were partly formed based on Anticipated future potential. Meaning, that the aspiration level was willingly lowered, because future business opportunities were foreseen. In particular this means for the in-crisis decision, a financial loss was accepted for two reasons. First, the organization wanted to help out in the nationwide shortage of PPE. “There was just a social problem and then six people got together to see what could be done.” – I1. Second, the project was supposed to showcase the engineering capabilities of the organization to the medical sector. Hence, the financial loss of giving the masks away for free was accepted in hopes of future business opportunities. Analogous to this, the pre-crisis decision incorporated also an expected financial loss to allow Anticipated future potential, with it obviously being a marketing decision. “(…) it is more a strategic fit and strategic success than a monetary success in the first step.” – I1.
4.1.3 Case ServiceDev2
In this case rather little differences between the aspiration level formation of the in-crisis and pre-crisis decision can be found, even though the in-crisis decision is very similar to the one in the first case, as the in-crisis decision is also about the virtualization of the training and
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
The product quality was meant to be better or comparable to the existing
products in the market
The video was supposed to be made to the current
market standard
Previous achieved performance / /
Previous aspiration levels The business case calculation was held to the same standard as pre crisis
This decision was driven by the inability to achieve
a previous goal. Thus, these previous aspirations
play a major role Anticipated future potential Another motivation behind
the decision was the hope to open up a new field of
customers
The decision was part of reaching a strategic goal, so a clear understanding of
the desired performance was already there
workshop portfolio, caused by the travel restrictions. This case is compared to the pre-crisis decision of a workshop development. Similar to the first case, this case as well can be categorized in the acute crisis phase (Fink, 1986; Darling, 1994), because “the threats we faced, were extreme” (I2) as the revenue dropped by 50 per cent and the uncertainty regarding the duration of the crisis was high at the time the decision was made.
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
The uncertainty of the crisis triggered an increased exchange how others go
about the situation
To stand out from the competition customers were included in the development
process Previous achieved
performance
It was the goal to get as close as possible to the previously delivered training
quality
The previously high performance was tried to be
matched Previous aspiration levels The new virtual trainings
were held to the same aspiration as previous ones,
to be “good enough” (I2), meaning sellable
The trainings needed to be “good enough” (I2) in order
to sell it
Anticipated future potential / /
Crisis induced regulations The travel restrictions triggered the change in service in the first place and
lowered the aspiration
/
Table 4.3: Overview of aspiration level formation factor between in- and pre-crisis decisions for case ServiceDev2 The aspiration level formation factor of the achieved performance of competitors played a role in both decisions but in a different way. In the in-crisis decision the uncertainty of the crisis triggered an increase in exchanges with others to figure out the best solution to the situation: “The degree of networking has increased because everyone was uncertain, and then we exchanged views on how they are now dealing with the situation” – I2. Contradicting to this use is the use in the pre-crisis decision as here the aspiration level was influenced in a way that the own service needed to stand out in comparison to the competition. However, this was not necessarily done in a direct way as it was done via the feedback of the customers who were repeatedly asked in the development process how they liked the service.
In regard to the use of the factor of previous achieved performance, both decisions are very similar. In the in-crisis decision the aim was to create as close of a workshop experience for the customer as possible, with lower expectation, knowing it would be almost impossible to create the same amount of interpersonal bond between workshop participants: “certain facets you just can't cover. (...) Like networking, creating intimacy, etc.” – I2. Similar to this, in the pre-crisis decision the previously achieved high performance and customer satisfaction was aimed for.
Alike the previous formation factor, the use of the previous aspiration levels was very similar in both decisions. In both cases the aim was to create a service that is “good enough” (I2) to sell it and then individualize it for each customer as the projects come around. This did not change between the in-crisis and pre-crisis situation. Furthermore, the definition of “good enough” did not change.
4.1.4 Case HR1
In this case, there is a difference in included factors in the aspiration level formation. However, this is mainly due to the individual types of decision and not due to the crisis. The in-crisis decision is about the issue of having a higher level of uncertainty acquiring new projects and therefore not knowing whether to hire additional personnel. The solution was the introduction of a talent pool, which allows to be more flexible in the final hiring decision. This decision took place once the majority of the turbulence of the crisis had settled. Especially the initial issue of the interviewees and other experts’ inability to travel back to China to his office, due to travel restrictions. “The first point is that I was unable to go to my workplace in China. My workplace is Shanghai and Shenzhen. (…) these experts e.g., cannot enter China and therefore we get into difficulties with projects” – I3. At the time the decision was made I3 was already working back in China. The main challenge was said uncertainty in the business development. Henceforth, the decision can be classified in the chronic crisis phase (Fink, 1986; Darling, 1994). The pre-crisis decision is about the development of an application to use in various projects in order to demonstrate the ability of software engineering.
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
/ The market was analyzed to
differentiate the own product from existing ones Previous achieved
performance Candidates selection to be stricter than before and extended engagement period
/
Previous aspiration levels Aspirations regarding candidate quality and organizational fit were lifted
to a higher level
Previous aspiration levels form similar projects with new never used before technologies were applied Anticipated future potential A secondary goal was
increased flexibility regarding hiring decision
Main driver was to better present the digital abilities to
customers, even at low revenues
Crisis induced regulations / /
Table 4.4: Overview of aspiration level formation factor between in- and pre-crisis decisions for case HR1
Both decisions differ in regards of the inclusion of achieved performance of competitors. In the pre-crisis decision, it played a role in order to be able to differentiate the own product from the existing products in the market and to know how to position the product in the market. “We have looked at what is available on the market. (...) The goal was to develop a strategy for the future and the positioning on the market to present ourselves a little better.” – I3. Whereas in the in-crisis decision it was known that the talent pooling is done by others as well, but it was knowingly decided not to incorporate the competitions performance in the aspiration levels. “We didn't really look at the competitors. (...) Building up an applicant pool is nothing radically new.” – I3.
Since the in-crisis decision did not have an external focus regarding the previous decision it had an internal one and the factor of previous achieved performance played a role in the formation of the aspiration levels. In the in-crisis decision the previous performance of the hiring process was adapted to better fit the situation introduced by the crisis. This restructuration had the aim to introduce stricter candidate selection and to keep fitting candidates longer engaged, to better balance the uncertainty of the project acquisition. In the pre-crisis decision previous performance played no role, because there was no previous performance in this area.
performance. Whereas the pre-crisis decision used the previous aspiration levels as a benchmark to get equally good or better performance.
Similarly, both decisions included the factor of Anticipated future potential. For the in-crisis decision the aim was to be more flexible in the long term with a constant pool of ready to employ candidates, even if that means to not get possibly good candidates because they accept offers from different organizations. “We have the feeling that it worked quite well and that we will continue to do so. So that you keep the inflow so high that you can put people into the pool.” – I3. For the pre-crisis decision, the Anticipated future potential played an important role, because the main motivation behind the project was to demonstrate the organizations technical capabilities.
4.1.5 Case BusinessDev1
This case uses the same pre-crisis decision as the previous one. Within this case there is the difference that the in-crisis decision uses the factor of previously achieved performance, which the pre-crisis decision does not use. However, this is mainly due to the novelty of the pre-crisis decision and the lack of relevant previous achieved performance.
Alike the previous case, this case is also taking place in the chronic crisis phase, as the interviewee was the same and the decision occurred around the same time as the previous one. The in-crisis decision is about the pricing for an offer to carry out a consulting project at a customer that the interviewees organization already works for. The organization mostly consults in the research and development (R&D) department. Due to the crisis, a lot of R&D budgets were cut, and such projects are particularly fought for. Therefore, the interviewee expected very low offers from competitors as everyone in the market tried to get pre-crisis level of utilization. “The project is now to be extended. But it will be put out to tender and (...) I assume that it will be fiercely contested, because everyone wants to get in (...) That is, if I don't pay attention now and with the prices and our performance (...) That is, the only thing that could break our necks is that someone goes in with an absolutely competitive price.” – I3.
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
In the expected bidding war, the differentiation of the
competition is very important
The market was analyzed to differentiate the own product
form existing ones Previous achieved
performance
The previous performance was so good, that the organizations project with the customer continued as
one of the only ones
/
Previous aspiration levels Generally, all new projects are held to the same
expectations
Previous aspiration levels form similar projects with new never used before technologies were applied Anticipated future potential Main factor was anticipated
future potential of the customer, lowering the financial aspirations for this
project
Main driver was to better present the digital abilities to
customers, even at low revenues
Crisis induced regulations / /
competitive prices of the competition. In the pre-crisis decision, it also played a role in differentiating the product from the competition.
In this case, the only difference between the two decisions is in the usage of the factor of previous achieved performance. In the in-crisis decision it was the case, that the interviewees organization is one of the only contractors that still worked at the customer during the crisis. “(…) our performance is already good. We are already working for the customer.” – I3. Thus, the effect of the previous factor is partially reversed, since the performance was so high it is expected that the customer will take that into account in the tendering process.
The use of the factor of previous aspiration levels is exactly the same. For each decision, pre- and in-crisis, there are previous comparable decisions, and their aspiration levels were used as part of the aspiration level formation. The same goes for the factor of Anticipated future potential. It was the main influence behind both decision and as an effect lowered the aspiration for this decision for the sake of an expected anticipated future potential resulting from it.
4.1.6 Case HR2
This case shows a shift in focus from a market and competition-oriented decision making to a self-focused and survival-oriented decision making during the crisis. Moreover, the implementation of additional crisis induced regulations plays an important role.
The in-crisis decision in this case is regarding the decision to make use of the “Kurzarbeit” (Eng.: Short-time work) regulation by the German government. This is an opportunity by the German government, allowing companies to significantly reduce the payroll and workload of employees in times of crisis, without having to fire them. The government pays the affected employees a certain percentage of their salary, to enable. This decision occurred in the acute crisis phase, as turbulence was high due to lots of aviation customers just cancelled their projects and the uncertainty of how the crisis would continue was high. The pre-crisis decision is regarding the strategic development of the workforce.
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
/ Important to position the
own organization properly in the market
Previous achieved
performance Main reference point for aspiration level Main reference point for aspiration level Previous aspiration levels Previous goals and
aspiration for the financial year were still used as a first
reference point
Historic aspirations were a good indication for
development Anticipated future potential Even though the main
objective was to save money, having no qualified
employees after the crisis was no options either
Main driver is setting the organization up for future
success
Crisis induced regulations Use of governmental subsidies to minimize losses
due to the crisis
/
Table 4.6: Overview of aspiration level formation factor between in- and pre-crisis decisions for case HR2
the difference to the in-crisis decision as that is about protecting the firm, its employees and the current market position as much as possible. The fast-paced characteristics of the COVID-19 crisis made it infeasible to act based on the behavior of the competition.
Both decisions included the aspiration level formation factor of previously achieved performance as their main reference to determine the aspiration level. Furthermore, this is also true for the previous aspiration level. In such a high-level strategic decision, the combination of these two factors appear to be the influence and reality check of a long-term strategy. Something similar can be said about the influence of the factor of Anticipated future potential. As both decisions are rather strategic in nature, their main driver is the enablement of Anticipated future potential, even if short-term aspirations need to be lowered for the later success. In the case of the in-crisis decision is meant to keep more people on the payroll than in an ideal scenario in order to ensure high-quality staff is available once business goes back to normal. In the pre-crisis decision, the influence of this factor is less drastic. “That means you look at your portfolio, you have more time for product development and service development. (...) In other words, you've actually shifted decision-making processes to HR, where you say, where do I get the right resources to serve the orders (…)?” – I4.
The factor of crisis induced regulations serves in a way to lift the aspiration to a higher level, since it allowed the organization to make use of additional subsidies and let go of less employees than otherwise. “to use the possibilities given to you with short-time work on the part of the legislator and to send the people then into the short-time work because they then run immediately on another account. But they are still your employees.” – I4. It is clearly impossible for this factor to be used in the pre-crisis decisions, as this regulation was specifically adapted at the beginning of the crisis.
4.1.7 Case OM1
Aspiration influence factor In-crisis decision Pre-crisis decision Achieved performance of
competitors / needed to stay competitive, New investments were raising the aspiration level Previous achieved
performance
Comparison with historic KPIs indicated reduction of
workforce and hence performance aspirations
needed to be lowered
The division historically only covered its own cost lowering future aspiration
Previous aspiration levels Previous aspirations were not reached and the first
starting point for new aspiration levels
The division had to fulfill the same historic aspiration
as in the years before
Anticipated future potential / Lack of Anticipated future
potential was the main driver behind the decision Crisis induced regulations Use of governmental
regulations to minimize problems caused by high number of negative working
hours
/
Table 4.7: Overview of aspiration level formation factor between in- and pre-crisis decisions for case OM1
In the comparison between the included factors in the aspiration formation process for both decisions, the first difference appears in the factor of achieved performance of competitors. While in the in-crisis decision this did not play a role, it did in the pre-crisis decision. As the lifetime of some machinery and the building itself came to its end, investments were necessary to stay competitive. Thus, the achieved performance of the competitors caused the performance aspiration level to be at a higher level, whereas in the in-crisis decision I5 particularly stated, that the decision came from within the organization and was solely influenced by an internal KPI.
This leads to the influence of the previous achieved performance, since the KPI of the aggregated employee time tracking showed an unusually high number of negative working hours: “I think we had at the end of April, where we should be somewhere around plus minus zero, we had 700 - 800 negative hours for the operation and we didn't want that because there was no work” – I5. The aspirations were not set higher than the usual performance, but at least close to equal to it. The usage of the factor was similar in the pre-crisis decision. Here the division historically only barely covered its own cost and was kept as it was “a nice addition to the portfolio and dearly beloved colleagues” – I5. The need for investment and the previously achieved performance indicated the inability of the investment to pay-off.
The factor of previous aspiration levels paints a similar picture. The aspiration to have close to zero negative hours that time of the year, in order to avoid issues near the end of the year, was the first starting point for the formation of new aspiration levels for the in-crisis decision. Analogous, the pre-crisis decision was influenced by the previous aspiration for the division to not cause any additional costs: “And we have always said as long as it runs plus minus zero, we will do it.” – I5.
I5’s organization used the crisis induced regulations to raise aspirations, since the regulations gave them a way to solve the problem that enabled them to keep all employees hired.
4.1.8 Case OM2
This case is the second case from the interview with interviewee I5, consequently the pre-crisis decision is the same. The in-pre-crisis decision is from around the same time as the previous decision and can be classified in the acute crisis phase as well. The decision is about sending all possible employees into home office, when the government urged organizations to enable this at the beginning of the crisis.
Aspiration influence factor In-crisis decision Pre-crisis decision
Achieved performance of competitors
/ New investments were
needed to stay competitive, raising the aspiration level Previous achieved
performance
Previous experience with bird flu and mad cow disease raised aspiration
levels
The division historically only covered its own cost lowering future aspiration
Previous aspiration levels / The division had to fulfill
the same historic aspiration as in the years before Anticipated future potential The threat of the crisis
pushed I5 to ensure survivability over maximum
performance
Lack of Anticipated future potential was the main driver
behind the decision Crisis induced regulations Governmental regulations
shifted aspiration from performance to health and
safety
/
Table 4.8: Overview of aspiration level formation factor between in- and pre-crisis decisions for case OM2
In regard to the aspiration level formation factor of achieved performance of competitors, the same observations from the previous case hold. The factor played no role in the in-crisis decisions, as the decision-maker did not set their aspiration based on any behavior of the market or the competition. As previously discussed, the factor played a relevant role in the pre-crisis decision.
The factor of previous achieved performance was included in the aspiration level formation in both decisions. However, this happened in slightly different ways. While in the pre-crisis decision about the closure of one division the previous achieved performance was a good indicator of performance and the order situation, in the in-crisis decision, previous performance only proofed that some degree of performance was possible under the influence of measures against other diseases and pandemics: “We are basically aware of what that means. And our hygiene concept is already designed for it.” – I5. This could only be seen as a distant comparison and no clear indication for performance of the office personnel in home office. Because this was known to the interviewee, the aspiration level was only partly influenced by this.
Due to no previous experience with employees working from home, the factor of previous aspiration levels had no influence on the in-crisis decision: “Since this was new for everyone, we did not expect the same” – I5. Opposite to this, previous aspiration levels did play a role in the pre-crisis decision aspiration level formation as previously described.
the interviewee to potentially sacrifice short-term performance with everyone in the office and instead prioritize the health and safety of the employees and having a strong organization going out of the crisis. The use of the anticipated future potential in pre-crisis decision is explained in the previous case, as it is the same pre-crisis decision.
In the in-crisis decision one of the main formation factors of the aspiration levels were the crisis induced regulations. The organization is a family owned and managed organization and next to the suggestion of one family member, who is a medical doctor, the urge from the German government to enable home office wherever possible was the main driver of the decision. The factor of crisis induced regulations being a driver of the decision does not implicate a direct influence on the aspiration level. In this case however, with no previous experience regarding the enablement of home office, the government issued regulation lowered the aspiration level in a way that the actual performance was secondary, and the health and safety of the staff became a primary goal.
4.2 Cross-case Analysis
In the cross-case analysis, the cases were compared to find similarities and differences between the changes in the use of aspiration level formation factors and characteristics of the decision surroundings. This resulted in the finding, that the aspiration level formation is affected differently depending on the different crisis phases the decisions were made in. It was observed that decisions at the peak of the crisis, the acute crisis phase, shift their focus away from the achieved performance of competitors and instead put a stronger emphasis on internal measurements. Additionally, the aspirations appear to be at a lower level in the acute crisis phase than at pre-crisis times. It seems this is due to the decision-makers focus on mitigation of the crisis impact on the organization. In comparison, decision makers seem to be going back to a pre-crisis aspiration level formation factor composition in the chronic crisis phase.
As explained in chapter 2.1.2, the crisis phase is not a clearly defined timeframe, but rather object to the perceived impact of the crisis on the organization and consequently the decision maker. The previously introduced crisis key characteristics of turbulence, uncertainty and threats caused by the crisis were used to categorize the cases into the different phases. This was done by classifying the perceived extent of the three key characteristics for each case either as high, medium or low. The classification was done based on the interviewee’s descriptions. For example, did I2 in the case ServiceDev2 describe the perceived threats as “extreme” (I2), whereas I4 stated “At the beginning you think that you are threatened, but in the core context after the first analyses no.” (I4). Since the impact is not measured by objective indicators but by the subjective perceptions of the interviewees on the situation, both cases from I1, ServiceDev1 and ProductDev1, as well as the case from I2, ServiceDev2, are classified to have high turbulence, even though I1 lost a third of the organization’s customer due to the crisis and I2 lost half of the organization’s revenue. Table 4.9 shows the classifications for all cases.
Case Crisis Phase Turbulence Uncertainty Threats
ServiceDev1 Acute crisis phase High: Lost 1/3 of customers, causing a shift to different customers High: Uncertain about duration of crisis and acceptance from customers of virtual services
Low: I1 did not feel the organization was under threat ProductDev1 Chronic crisis phase High: Lost 1/3 of customers, causing a shift to different customers Medium: Uncertain when some customers are returning Low: Involved business units not under threat ServiceDev2 Acute crisis
phase
High: 50 per cent less revenue meant
High: Uncertain about duration of
a change in customers and active projects, on the other hand customers needed the services to tackle the virtualization crisis and acceptance from customers of virtual services revenue caused and “extreme” (I2) feeling of being threatened HR1 Chronic crisis phase Medium: Customers shifted from aviation and automotive to telecommunication
Medium: The uncertainty resulted from the large share of customers in the especially hit aviation sector
Low: There was only a short moment at the beginning of the crisis where threats were felt BusinessDev 1 Chronic crisis phase Medium: Customers shifted from aviation and automotive to telecommunication
Medium: The uncertainty resulted from the large share of customers in the especially hit aviation sector
Low: There was only a short moment at the beginning of the crisis, where threats were felt HR2 Acute crisis
phase High: Lost 1/3 of revenue, causing a shift to different customers
High: It was unclear if all employees could be held and how customers would receive remote consulting Low: First analyses indicated high resilience
OM1 Acute crisis phase Medium: Reduced workload of system irrelevant customer and increased workload from system relevant ones High: High uncertainty regarding survivability of certain customers and regarding the workload
intensity
Low: At no point were there any concerns regarding survivability
OM2 Acute crisis
phase Medium: Increased orders from system relevant customers and reduced orders of other customers High: High uncertainty regarding survivability of certain customers and regarding the workload
intensity
Low: At no point were there any concerns regarding survivability
Table 4.9: Overview of crisis characteristics for each case
Unfortunately, the data set does not include cases with decisions from the prodromal crisis phase nor the crisis resolution phase. For the acute crisis phase and the chronic crisis phase a distinct difference in the use of aspiration level formation factors was found.
