Introduction
This theory is actually a business metaphor which uses the “boiled frog phenomenon” to try and explains why, in strategic business management the business enterprises management does not easily identify and react to the gradual threats in the organization but obviously reacts to the sudden changes.
As described by Polard (2004) if you put a frog in a pot of hot water, obviously the frog jumps out of the burning water. However if the same frog is put in tepid water and the heat is turned on slowly, the water temperature increases gradually the frog calmly boils to death in a state of unconsciousness. This is because his survival threat encountered was below his ability to identify the gradual changes. In psychology, this phenomenon is also referred as sensory adaptation. Similar to the reaction of this frog, managers of business organizations tend to remain in their comfort zones unless they are compelled by sudden threats not to, otherwise they react too slow to minor issues which may lead to the collapse of the enterprise.
Boiled frog phenomenon Application
To achieve long-term objectives of an organization, this phenomenon is applied in the process of formulation, implementation and evaluation of cross-functional decisions before allocating resources to implement policies and plans of the project/program. This is why it is important to consider this theory in strategic management of any business organization. Therefore, it becomes the duties of the management team in every organization to point out threats at the initial stages so as to survive. This will assist the management in proper planning instead of waiting to respond to these threats. With proper planning the management will be in a better position of overcoming any threats in the company. Otherwise this may need us to reduce our threshold of change to allow usability to minor and slow changes that are occurring in our environment.
Example
Enron’s (the American energy company) collapse gives us a good example where this has occurred. This happened in the 1990’s when the CEO of the company had several product plans and issues of international business which required a huge financial support. On financial instability the company implemented strategies but certainly led to subsequent losses which were basically through wrong investments and partnerships. The apparent weaknesses led to bankruptcy and scandals and loss of jobs, life savings and pensions when the company collapsed (Zellner et al., 2001).
Thus, examining the term ” The Boil frog Phenomenon” in business dealings particularly in the strategic business management, portrays how companies are failing to recognize slow and gradual threats within the firm but rather retort to abrupt threats and changes. By organizations focusing only on satisfying of key consumers, they fail to detect the continuous slow developing threats that the opposition is putting out there; which could play a huge role in the market dynamics in a short period of time (David, 2007). Thus we don’t have enough proof that key consumers will always remain our customers when our business opponents are displaying better products out in the market. However, considering some of the following would assist: because operationally the outstanding organizations convert their assets to liabilities, the management should have put this into consideration. The company should have avoided involving itself in wrong partnership and investments, since this may have lead to the whole thing and the company was boiled; it collapsed.
As a result, this organization should have reacted at an early stage when there was still time to plan rather than finding themselves in a difficult situation at a later point when the company was collapsing. The company management should have tried their best not to be caught up in the boil frog phenomenon. In fact, it was advantageous if they could have tried to recognize threats that were harmful to the progress of the company what was left otherwise to the difficult survival of the company.
Market leadership of any given business enterprise depends on sensitivity and speed to the external changes. Firm operators and management that identifies changes and act on them urgently become product leader. Such organizations will obviously be ahead of their competitors following their ability to spot changes and act on them.
Conclusion
From this “boiled frog” phenomenon we have learnt that in the business environment, no small or large business is exempted from its effect regardless of the size of the business organization. This therefore encourages the business management and operators to avoid being complacent to only the existing status of threats and plans/strategies. The phenomenon suggests that in any business organization, the operators should try to go outside the laid strategic management plans and strategies, because these may not be reliable enough to detect minor and gradual changes that occur in the ever changing business. This will in the long-run will lower the threshold of the organization to detect unexpected events in the highly competitive world of business, and therefore give enough time to adapt to these changes.
References
David, F. (2007). Strategic management: concepts and cases (11th ed). Upper Saddle River, New Jersey: Pearson Prentice-Hall.
Pollard. D. (2004). The Boiling Frog. Web.
Polynice, D. (2008). The “Boiled Frog Phenomenon”. Web.