Organizational disasters: why they happen and how they may be prevented

Purpose - The purpose of this paper is to look at why organizational disasters happen, and to discuss how organizations can improve their ability to recognize and respond to warning events and conditions before they tailspin into catastrophe. Design/methodology/approach - A review of research on organizational disasters suggests that there are a number of information difficulties that can prevent organizations from noticing and acting on warning signals. The paper describes these difficulties using recent examples of organizational mishaps from: 9/11, Enron, Merck Vioxx withdrawal, Barings Bank collapse, Columbia Space Shuttle breakup, and Children's Hospital Boston. Findings - The paper identifies three types of information impairments that could lead to organizational disasters: epistemic blind spots, risk denial, and structural impediment. It examines common information and decision practices that make it hard for organizations to see and deal with warning signals. Finally, the paper suggests what individuals, groups, and organizations can do to raise their information vigilance. Originality/value - The paper shows that organizational disasters have a structure and dynamic that can be understood, and proposes a number of strategies by which organizations can become better. prepared to recognize and contain errors so as to avert disaster.