The crisis management in Chinese and Estonian organizations

The purpose of this paper is to discover and compare the implementation of crisis management in Chinese and Estonian companies and the strategies the managers have used to prevent or manage crises.

An empirical study was conducted in two economies in transition: China and Estonia, in 2008. Interview data were collected from 102 Chinese companies and 67 Estonian companies. The data were analyzed applying content analysis.

The results indicate that the managers of Chinese and Estonian organizations have identified different crises reflecting the politico‐socio‐economic situation of the countries. The most common type of crises in Chinese organizations is those related to economy, while in Estonian organizations, they are related to human resources. Estonian companies are better prepared for handling crises beforehand than Chinese companies. However, the majority of companies in both countries started reacting after a crisis had already come true. A triangular model of crisis management is presented.

The empirical study is tentative focusing on major differences and similarities in crisis management between two countries in transition. The differences are interpreted from societal‐level development. More in‐depth research in needed based on the results of this study.

The transfer of market‐economy practices often fails due to institutional and cultural tensions and conflict. The study of crisis management in Chinese and Estonian companies tries to increase understanding of the different routes of transition economies and its impact on management and, specifically, on crisis management. The crisis management model based on the study illustrates the interconnection between different elements of crisis management.