Boiled Frog Phenomenon

Boiled Frog Phenomenon Strategic management is very important for success in the increasingly changing global economy. Easily said than done, many organizations fail to plan appropriately leading to failure of major corporations (Dess Lumpkin, 2009, p. 23).Advertising We will write a custom essay sample on Boiled Frog Phenomenon specifically for you for only $16.05 $11/page Learn More Apart from failure in planning, some business failures have resulted from slow decisions and inactions. â€Å"Boiling frog phenomenon† is one of the explanations that can be offered to many business failure cases in the last two decades. A widespread phrase, â€Å"boiling frog phenomenon† is an important consideration in strategic management. The allegory of â€Å"boiled frog† has a widespread usage in history. If a frog is immersed in a pot containing hot water, it would definitely jump out and save its life. However, a frog submerged in a pot containing cold water and temperat ure raised gradually may fail to notice the rising temperatures ending up being boiled alive. Though there is no barrier preventing the frog from jumping out of the pot, it fails to take the necessary action since change in temperature seems to be very minimal (Polynice, 2008, par 2). Culturally the story is used to warn people who fail to notice or take action to gradual change in their lives. Unable to notice the gradual changes, such people may find themselves in great trouble later on. The â€Å"boiled frog phenomenon† is relevant in many areas of life. In business, the phenomenon is used to warn of the need to notice and take actions to gradual changes. Like the â€Å"boiled frog†, an organization that fails to respond to gradual changes in its area may find itself in great trouble. An organization must be able to notice gradual changes in its market, human resources, technological or legal environment to be successful (Burke, Trahant Koonce, 1999, p. 17). In str ategic management the phenomenon is also used to refer to a strategy for implementing changes in an organization. Implementing changes gradually helps minimize resistance to change. A fair example of â€Å"boiled frog phenomenon† in United States is the failure of Enron. Formed in 1985, Enron developed to be a major player in energy industry in North America. Enron management, led by Kenneth Lay, was obsessed with success. They wanted the organization appear to be doing well despite of various failed projects.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The main concern for the management was maintaining a positive image to stakeholders and the public, and ensuring positive trend of the company’s share prices in the stock market. Instead of addressing the causes of declining performance, the management opted for manipulating books of account in order to portray t he organization to be profitable. After years of unethical accounting practice, the gap in the books of account was too large to conceal (Mclean Elkind, 2004, p. 132). Between 1990 and 2000, the organization registered consistent increase in its share prices. Enron management did not notice the water they were in boiling. By December 2000, Enron’s share price in the stock market was about $83 per share. The share prices however fell as low as $0.63 per share after the scandal was revealed later in 2001. â€Å"Boiling frog phenomenon† is relevant in business as in other areas. To be successful an organization has to strategically deal with gradual changes affecting it. It is prudent not only to notice the changes but also take the necessary action. Collapse of Enron illustrates the risk of â€Å"boiling frog syndrome†. To the organization’s management, manipulating books of account was a prudent thing to do at the beginning but this got out of control. Re ference List Burke, W., Trahant, W. Koonce, R. (1999). Business climate shifts: profiles of change makers. New York: Butterworth-Hernemann. Dess, G., Lumpkin, G. (2009). Strategic Management: Creating Competitive Advantage.New York: MaGraw-Hill.Advertising We will write a custom essay sample on Boiled Frog Phenomenon specifically for you for only $16.05 $11/page Learn More Mclean, B. Elkind, P. (2004). The Smartest Guys in the Room: the amazing rise and scandalous fall of Enron. New York: Penguin. Polynice, D. (2008). The â€Å"Boiled Frog Phenomenon. Retrieved from https://ezinearticles.com/?The-Boiled-Frog-Phenomenonid=932310