The internal communication crisis and its impact on an organization’s performance

Abstract

The aim of this research is to study how internal communication inefficiency can, if at all, lead to an organizational crisis. An answer to this question was found by studying theory and previous empirical research on internal communication and organizational crises. For the purpose of this paper, a case study of one particular organizational crisis was carried out by applying a combined research methodology – in-depth interviews and a survey. As a result of a detailed analysis of theory and a study of a real-life case, a new concept – the “internal communication crisis” – was identified in the study. Also, it wasestablished that an internal communication crisis is a result of asymmetrical formal internal communication, a lack of leadership, weak organizational culture, a lack of values, and active grapevine communication. This research study found that an internal communication crisis is directly related to an organizational crisis because there is a big possibility that in the alternative decision-making process, established as a result of an internal communication crisis, employees will try to solve organizational problems by involving external stakeholders. Such attempts to involve external stakeholders lead to a very high risk of negative publicity and damage to reputation, which gives national policy decisionmakers an opportunity to expose an organization to threats of liquidation or resource reduction.