“Boiled Frog" Phenomenon Essay  -581 Words                        - Essay Prowess

“Boiled Frog” Phenomenon Essay  -581 Words                       

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“Boiled Frog” Phenomenon

Scientist placed a living frog in container with cold water on a stove and slowly increased the flame beneath the container. The frog remained in the water as the water temperature approached boiling point. The frog did not realize the water was getting too hot until it was too late to leap out. Had the frog not adapted to the water, it could have escaped death. The tendency of the frog to adapt to increase in water temperature cost it its life (Pollard, 2004). This metaphor is used by business entities to show how threats to their future occur gradually leading to closure. Mechanisms to identify potential threats are insufficient in most businesses and if noticeable the ability to adapt to such threats is significant to the long term profitability of businesses.

In the 20th century, large businesses embraced strategic management. The senior most executives drew up strategies in line with their business’ goals which were then communicated down the organization’s management structure for implementation.

At corporate level, strategies were drawn up towards decision on business growth, competition resource allocation etc.

However, strategic management is applied in assisting a company to realize and react to changes in their business environment such as stock market fluctuations, technology advances, public criticism, accidents and natural disasters. In many incidences, changes in business environment which are obvious are not detected early enough, and such businesses suffer the boiled frog phenomenon (Pollard, 2004).

Enron is an example of the boiled frog phenomenon. The gradual erosion of the company’s top CEO professional ethics eventually came to light after an Enron employee made revelations to this effect (Palepu & Healy, 2003). The fact that the CEO had been accustomed to paying off related departments within Enron to falsify  financial accounts to protect the company’s image to clients in order to maintaining existing contracts, was and is testament to the boiled frog phenomenon which finished off Enron. The CEO hired and developed executives to take advantage of accounting loopholes and biased financial reporting to hide under the carpet debts amounting to billions of dollars from failed contracts and projects (Palepu & Healy, 2003).

Companies can limit such eventualities by upholding ethical guidelines in the respective lines of business, staying ahead of the competition through product research and development; putting measures place to mitigate the effects of natural calamities or which are within the scope of strategic management.

In strategic management a company can set objectives as product leader, it sets its course to offer the consumer the best that it can offer and with sustained product research and development always stay as No.1. A company may aim to build it core business practices to achieving premium customer relations. With this strategic approach the customer is always right and the company offers to create o long lasting relation with their customers and more so delves into what a customer expects and works towards providing the customer with exactly what is expected in a product.

Operational excellence as a strategic plan put a company in a position where it produces a product in the most effective and efficient procedure and offer it to consumers at the lowest possible cost.

Compliance to strategic management standards and professional ethics ensures no threats of the boiled frog phenomenon.

 

Reference

Healy, P. M., & Palepu K.G. (2003). The fall of Enron. Journal of Economic Perspectives Retrieved February 8, 2011 from http://www.webcitation.org/5tZ0YEF6T

Quinn, D. The boiling frog. Retrieved February 8, 2011 from http://www.oilcrash.com/articles/frog.htm

The boiled frog phenomenon. (2001, November 12). Philippine Daily Inquirer. Retrieved February 8, 2011 from http://docmario.wordpress.com/the-boiled-frog-phenomenon/

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