Being affected from crisis: Case of furniture industry in Turkey
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African Journal of Business Management Vol. 7(1), 78-84, 7 January, 2013
Available online at http://www.academicjournals.org/AJBM
DOI: 10.5897/AJBM11.123
ISSN 1993-8233 ©2013 Academic Journals
Full Length Research Paper
Being affected from crisis: Case of furniture industry in
Turkey
Mehmet Colak
Mugla University, Faculty of Technology, Kotekli, 48000, Mugla, Turkey. E-mail: cmehmet@mu.edu.tr.
Accepted 31 March, 2011
The objective of the businesses and assets of an open system is to continue to adapt to the
environment; and their ability to adjust and be affected by the environment and the structure of the sub-
systems in line with expectations depends on their response to change. Constant change in
organizational environment and organizations that cannot take the necessary measures against
environmental influences and balance lead to the creation of hazards. Achievements of businesses,
made possible largely by seeing and handling of danger in advance, depend on assessments.
Businesses and environment influence entail various threats and crises which organizations may face.
Due to the devastating effects of crisis, coping skill of managers, in terms of organization is essential.
To manage crisis, problems need to be identified in advance, as a way to prevent them from occurring;
rather than to take steps to limit their consequences. As can be seen it is better to predict and prevent
crises from occurring or steps should be taken to limit their results, if they cannot be stopped. The
main problems of the industry in Turkey are financial problems, transportation, lack of domestic and
imported raw materials, inadequate use of modern and design-focused production, and particularly for
small- and medium-scale organizations, lack of information about the international markets. In addition,
the global crisis that shook the world economy in 2001, together with other sectors, deeply affected the
furniture industry. Furniture industry is affected by a crisis environment, which is what this study aims
to determine. In this regard, the pre-and post-crisis situations of furniture enterprises crisis may well be
studied.
Key words: Furniture industry, crisis, crisis sources, crisis management.
INTRODUCTION
For organizations to survive, they need to follow the rapid society, legal and political restrictions, and natural
changes and developments taking place in their sectors disasters such as war, earthquake, and flood (Ergin,
closely. In today’s world, with the effects of globalization, 1992).
the competition has become more severe than it was Every type of crisis can lead to spontaneous distortion
before and the uncertainty has increased to the highest of the interaction between humans, technology and other
level (Arikboga, 2001). Such severe competition and high elements of the organization. First of all, crisis is a state
level of uncertainty sometimes provide organizations with which is unexpected and not easy to detect by the
threats and sometimes with opportunities (Uslu, 1999). organization. There may be some signals of crisis. Yet,
Apart from natural disasters, crises emerge as a result of what is important at that point is that the organization
the interaction among technology, human behaviors and should be able to recognize the signals and take
organizational culture (Tutar, 2000). External factors measures to avert a crisis by displaying great sensitivity
believed to be one of the elements causing crises can towards environmental changes (Tutar, 2000).
include factors related to economic system such as Crisis can be described as the state of tension which
economic fluctuations and irregularities, mismatching can not be expected in advance, should be responded
supply and demand; technological developments, chan- fast, threat existing values, goals and predictions of the
ges in the expectations, values and living styles of the organization by making the avoidance and adjustmentColak 79
mechanisms of the organization inadequate. The con- advance and eliminating them (Anonymous 3, 2009).
cepts such as stress, anxiety, panic etc are the The issue of crisis management is of great importance
representatives of the emotions experienced in a crisis for organizations because when it can be fully exploited,
period (Tagraf and Arslan, 2003). There are different organization can be ready for unexpected events and
definitions of crisis provided in the literature. Some minimize their losses in crisis periods. On the other hand,
definitions define crisis as lack of adequacy to intervene with the employment of crisis management by organi-
in a threatening condition. Some authors emphasized the zations, they can be ready for crises, their employees can
necessity and priority of coping with unexpected more easily cope with the negative impacts of crisis
conditions while defining the concept of crisis. On the conditions, minimize their time losses and the most
other hand, in the generally agreed definition of crisis, it is importantly, the existence of the organization is not
seen as a situation threatening the existence of the threatened (Anonymous 4, 2010).
organization (Can, 1994).
In theory, crisis can be defined as a state of tension
which cannot be expected in advance, should be res- Purpose of the study
ponded fast, threat existing values, goals and predictions
of the organization by making the avoidance and The demand for furniture has greatly increased in Turkey
adjustment mechanisms of the organization inadequate as a result of population increase, urbanization and
(Anonymous 1, 2010). What is primarily important for improved living standards. In this respect, the furniture
organizations is not to look for the ways of coping with a sector should be reshaped with a new view that can
crisis when it has already began but to develop a recognize the necessities of the age. Today, Turkish
managerial structure that can predict that a crisis is furniture industry mostly consists of small-scale
coming and can make use of the crisis conditions to organizations using traditional production methods.
make the organization more successful and give a new However, particularly within the last 15 to 20 years, the
momentum to the processes of the organization number of the middle- and large-scale organizations has
(Vergiliel, 2001). increased. Today, there are nearly 60,000 organizations
For a new situation emerging to be defined as a crisis, in the furniture industry and the number of the employees
it should have the following characteristics (Akat and is nearly 260,000. The important centers of furniture
Budak 1999). production are; Istanbul, Ankara, Bursa (Inegol), Kayseri,
Izmir and Adana.
a. Crisis represents a sudden change that can not be The main problems of the industry in Turkey are
sensed in advance; financial problems, transportation, lack of domestic and
b. The state of crisis cannot be predicted; imported raw materials, inadequate use of modern and
c. Crisis should be responded to fast and urgently. The design-focused production, and particularly for small- and
managers can not respond to a crisis with their standard medium-scale organizations, lack of information about
decision making mechanisms; the international markets. In addition, the global crisis
d. Crisis threatens the goals and existence of an shaking the world economy in 2001, together with the
organization (Yeniceri, 1993); other sectors, deeply affected the furniture industry. The
e. As a crisis cannot be overcome with the standard purpose of the present study is to determine the extent to
decision making mechanisms, it requires urgent which the furniture industry was affected from the crisis.
intervention and this may lead to tension on the part of
managers (Can, 1994).
MATERIALS AND METHOD
“Crisis management” can be defined as the construction
Materials
of an effective structure to avoid a potential crisis. That is,
it can be defined as prevention of the elements that can In this context, pre- and post-crisis states of the furniture
lead to a crisis by predicting them in advance or organizations located in Istanbul, Ankara, Bursa, Kayseri, Izmir,
minimization of the negative impacts. We can clarify this Samsun, Mugla, Kars were investigated in this study.
with a simile. Crisis is like a virus inhabiting a weak body. The reasons for the selected organizations operating in the
furniture sector as the survey area of the present study are listed
Its effect on our body is in reverse correlation with the
below:
strength of our body. It can make you sick or make your
immune system stronger like a vaccination (Anonymous (a.) The importance of furniture industry has increased in this
2, 2009). century and it is expected to increase more in the future,
Crisis management is a process where crisis signals (b.) Furniture industry realized the 1% of all the export in the year
are received and evaluated and required measures for 2009; that is, 1 billion dollars of the total 100 billion dollars and its
contribution is expected to increase in the future,
organization to minimize its losses are taken. Crisis (c.) Furniture sector has positive contributions to the development
management covers a long process. The most important of other related sectors,
element in this process is predicting occurrences in (d.) Firms operating in furniture sector believe that such studies will80 Afr. J. Bus. Manage.
be great contribution to the sector. teams. The organizations increased overtime working
hours during the crisis. Following the crisis, in order to
overcome the adverse affects of the crisis, the
Method
organization put greater emphasis on their advertisement
The empirical data of the present study were collected through
efforts and decreased their promotion expenditures. High
interview and questionnaire methods. Using more than one data majority of the organizations used marketing strategies in
collection tool is argued to improve the reliability of the findings their sales, attempted to reduce the expenditures and
(Seyidoglu, 1995). The reason why the questionnaire technique encouraged their workers and sale offices to work more
was selected is that it makes collecting large amount of data in a efficiently to minimize the adverse affects of the crisis.
short time possible (Kuheylan, 1989). The questionnaire was
Most of the organizations motivated their workers against
administered in face to face interviews to the managers of the
organizations. There are 55 questions concerning the pre-crisis the crisis.
state and 47 questions concerning the post-crisis sate. Totally 49 More than half of the organizations were able to predict
organizations were administered the questionnaire and the findings the crisis in advance and their perception of a crisis as a
are presented in Table 1. threat weakened after the crisis. Nearly half of the
organizations view a possible crisis environment as an
opportunity. Moreover, most of the organizations see the
RESULTS AND DISCUSSION other organizations working in the same sector in the
same region as a threat. The main factors viewed to be
What should be done by organizations is to get ready for the causes of a crisis are human factors, organizational
a crisis and the adverse effects it will create, take the infrastructures, affective factors, technical factors, and
required measures, develop pre-emptive alert systems, competitive environment. The organizations consider
manage the chaotic situation to be created by a crisis their post-crisis performances as not good. In the
successfully and minimize the effect of a crisis. The determination of the investments, having profit is the
required measures should be planned by organizations strongest factor and this is followed by necessities. In
within the framework of “crisis management” before a crisis period, the organizations attempt to reduce the
crisis starts. Special attention should be taken not to expenditures rather than manipulate the production.
destroy the future of the organization just to save the day. While 56% of the organizations do not think that the
Following the crisis, though no change occurred in the measures taken by the state are not adequate, 44% of
functioning area of the furniture organizations, the them think that they are sufficient.
number of their employees decreased and this led to In a crisis period, overcoming the adverse affects of the
reduction in the size of the organizations. This holds crisis depends on revising the targets, finding the suitable
particularly true for the small-scale organizations. The way on time to minimize the losses caused by the crisis
number of the personnel consisting of university by analyzing the strategies and policies. In a crisis period,
graduates did not change much. However, 25% of the every moment and decision are of great importance.
organizations think of changing their sector. Managerial hesitations and panic atmosphere in the
While recruiting new personnel following the crisis, the management, chain decision making and approach
recruiting decisions were mostly based on necessity. The selection mistakes may lead to emergence of mistakes
organizations preferring the registered workers before the that can harm the organization.
crisis somehow changed their preferences favoring the
recruiting of unregistered workers following the crisis.
While there was no decrease in the number of the Conclusion
insured workers employed by the large-scale organiza-
tions, there was a decrease in the small-scale organi- First, existing conditions (both external and internal)
zations. While the number of the uninsured workers should be well analyzed so that the question “what is our
employed by the small- and medium-scale organizations position?” can be clearly answered. Here, economic
increased, there was no uninsured worker in the large- factors, the state of the sector, existing market conditions
scale organizations. The number of the organizations and other external factors should be analyzed well.
requiring a qualification certificate from their workers Moreover, internal analysis should be carried out to
decreased after the crisis. The wage of the workers is determine the strengths and weaknesses of the organi-
mostly determined by qualifications and performance. zation. Moreover, opportunities and threats should be
The number of the foremen and unqualified workers clearly determined and measures should be taken to turn
increased after the crisis but no significant change was the crisis into an opportunity. In short, strategies and
observed in the number of the managers. While the plans should be revised and necessary adjustments
number of the employees working for minimum wage in should be made. In an environment of increasing com-
large-scale organizations increased, their number de- petition, “operational efficiency” is of great importance but
creased in the small-scale organizations. Small decrea- it becomes vital in crisis periods.
ses were observed in the amount of the export. Measures that can improve the efficiency and savings
Large-scale organizations formed crisis management should be immediately put into effect. Saving does notColak 81
Table 1. The pre-crisis and the post-crisis situation of enterprises.
Pre-crisis Post-crisis
Parameter
f (%) f (%)
Scale of the organization
Small 8 16.6 25 52.09
Medium 17 35.5 15 31.25
Large 23 47.9 8 16.66
The number of the employees
5-10 15 31.5 13 27.08
11-20 12 25 19 39.58
21-30 7 14.5 5 10.41
31-40 7 14.5 2 4.18
41 and more 7 14.5 9 18.75
The number of the university graduate employees
0-2 24 50 25 52.08
3-4 11 22.9 10 20.85
5-6 5 10.4 6 12.5
7-8 6 12.5 5 10.41
9 and more 2 4.2 2 4.16
The number of the insured employees
0-10 19 39.59 15 31.25
11-20 12 25 20 41.68
21-30 3 6.25 5 10.41
31-40 6 12.5 0 0
41 and more 8 16.66 8 16.66
The number of employees working without
insurance
0-10 38 79.16 41 85.42
11-20 10 20.84 6 12.5
21-30 0 0 5 10.41
31-40 0 0 0 0
41 and more 0 0 1 2.08
The number of the foremen
0-2 10 20.8 15 31.25
3-4 15 31.4 18 37.5
5-6 10 20.8 7 14.59
7-8 7 14.5 8 16.66
9 and more 6 12.5 0 0
The number of unqualified employees
0-10 28 58.37 30 62.5
11-20 10 20.8 13 27.08
21-30 7 14.58 3 6.25
31-40 3 6.25 0 0
41 and more 0 0 2 4.17
The number of the managers
0-2 30 62,5 32 66,66
3-4 10 20.8 10 20.8
5-6 6 12.5 5 10.41
7-8 2 4.2 1 2.08
9 and more 0 0 0 082 Afr. J. Bus. Manage.
Table 1. Contd.
Percentage of export in the production
1-10% 26 54.17 24 50
11-20% 9 18.75 12 25
21-30% 3 6.25 2 4.16
31-40% 4 8.33 3 6.25
41% and more 6 12.5 7 14.59
Percentage of import in the production
1-10% 25 52.09 24 50
11-20% 14 29.19 15 31.25
21-30% 2 4.16 1 2.08
31-40% 2 4.16 5 10.42
41% and more 2 4.16 7 6.25
Measures taken for a crisis
Yes 33 68.8 30 62.5
No 15 31.2 18 37.5
Strategies developed to make a crisis an
opportunity
Advertisement 8 16.66 16 33.33
Reduction 15 31.25 15 31.25
Incentive 8 16.66 9 18.75
Promotion 9 18.75 5 10.42
Others 8 16.66 3 6.25
The number of the organization improving their
facilities and commercial relationships as a result of
the economic developments
Yes 30 62.5 24 50
No 18 37.5 24 50
The number of the employees working with
minimum wage
0-10 25 52.08 21 43.75
11-20 14 29.16 19 39.59
21-30 4 8.3 4 8.33
31-40 4 8.3 1 2.08
41 and more 1 2.08 3 6.25
The number of the organizations having crisis
management teams
Yes 12 25 17 35.41
No 36 75 31 64.58
The method used to determine the wages
According to performance 6 12.5 7 14.58
Minimum wage 13 27.09 10 20.84
According to qualification 27 56.25 31 64.58
Others 2 4.16 0 0
Preferences for employing the workers
The organization preferring to employ unregistered
3 6.29 8 16.66
workers
The organizations preferring to employ insured workers 39 81.2 33 68.75
The organizations preferring to employ daily workers 2 4.18 2 4.18
Others 4 8.33 5 10.43Colak 83 Table 1. Contd. The organizations requiring qualification certificate for recruiting Yes 35 72.9 32 66.66 No 13 27.1 16 33.34 The organizations regarding a crisis as a threat to the organization Yes 26 54.16 29 60.42 No 22 45.84 19 39.58 Are the organizations working in the same sector in the same region a threat? Yes 26 54.16 29 60.42 No 22 45.84 19 39.58 The organizations using marketing strategies in the sale of their products Yes 26 54.16 32 66.66 No 22 45.84 16 33.34 Labor preferences for the production Cheap labor 3 6.25 6 12.5 Qualified labor 24 50 25 52.08 Both of them 21 43.75 17 35.42 Preferences for the way of collecting returns Cash 9 18.75 8 16.66 Installments 9 18.75 11 22.91 Both of them 28 58.33 26 54.18 Others 2 4.17 3 6.25 Product storage Yes 30 62.5 29 60.42 No 18 37.5 19 39.58 Customer satisfaction Yes 47 97.92 44 91.7 No 1 2.08 4 8.3 Warranty period for the products Yes 40 83.33 39 81.25 No 8 16.67 9 18.75 The number of the shareholders Yes 22 45.84 25 52.08 No 26 54.16 19 39.58 Investment decisions Profit 24 50 27 56.25 Necessity 24 50 21 43.75 The performance of the organization in the last year Very good 2 4.14 2 4.14 Good 17 35.45 8 16.66 Not bad 25 52.08 20 41.66 Bad 4 8.33 18 37.5
84 Afr. J. Bus. Manage.
only mean lying of the workers but also increasing the media, and different cultures etc. Though usually there is
efficiency of business process and making better use of no response within the few hours following the break-out
technologies. Even improvements in stock management of a crisis, these few hours are vital in determining the
can lead to significant savings. In a crisis environment, destiny of the organization. It is important to be able to
cash management exhibits greater importance. Cash predict the worst and decide what to do before, while and
management should be followed more closely and means after the crisis and to communicate them to the public.
should be sought to improve its efficiency. This is only possible when detailed preparations are
During the crisis management process, the managers made for a possible crisis. Correct selection of the
should have some specific skills. For organizations to be location of the production, proper market analysis, proper
successful, human factor and team work are of great selection of the technologies to be used, selection of the
importance. The workers should be able to focus on how personnel with required qualifications etc. are important
they can contribute to their organization rather than on to avert a possible crisis.
their concerns about being unemployed. Motivation
should be kept high, and special emphasis should be put
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