The "boiled frog" phenomenon is a business term of significance to business in general and to strategic management in particular.
1. Based on your research, please describe how this phenomenon applies to business and particularly to strategic management?
2. Share a specific business/company example; discuss the particular situation where the Boiled Frog phenomenon occurred.
3. What reason(s) do you attribute this particular phenomenon to?
4. What could the business have done to avoid the effects of the phenomenon?
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The boiled frog phenomenon focuses on adaptation. However, this does not imply that adaptation is necessarily positive. Just as the frog slowly adapts to the increasing water temperature, until it reaches the boiling point, businesses can adapt to increasing pressures and negative influences. However, like the frog, eventually the business will adapt so much it fails to recognize it is doomed to fail. Adaptation occurs for many reasons. The external competitive environment, the internal culture, and other forces cause change that managers are often fail to take notice of. For an organization to maintain profitability or to achieve its goals, it must maintain focus and develop a sound strategy.
Strategic management is a concept of planning activities and processes within an organization, so that it can stay on track, in achieving its objectives. If an organization fails to recognize and respond to rapid changes in the competitive environment, it is unlikely a strategic plan exists to address the rapid changes in the business environment. Like the frog that ignores the increasing water temperature, the organization that fails to acknowledge changing forces will fail to survive (Ramirez, 2001). A sound strategy to maintain success and stay on track requires managers and decision makers to first acknowledge a challenge exists, then act on the acknowledgement, with a well planned and well thought out strategy.
An example of a boiled frog situation occurred at a local automobile dealership that believed it could take shortcuts in the vehicle service department. In a small town, vehicle owners have limited options for automotive repairs. The service manager believed that customers would return for future service, even if service they received was less than appropriate. The manager demanded technicians take the shortest route possible to vehicle repairs, even if technicians knew those solutions were not likely to result in permanent resolution of the mechanical issues.
In this particular instance, the service manager became complacent about service as a means of increasing profit. The failure to acknowledge the power of word of mouth in a small town led to eventual layoff of some of the service technicians, due to slowing of demand for services. Though there were fewer alternatives for vehicle repair than in a larger metropolitan area, many customers who were dissatisfied with their service told their friends, family, and neighbors about the poor service and took their business elsewhere. The failure to recognize increasing options for customers, such as seeking services in neighboring towns and in newly opened shops, cause a shortsightedness in the ability of the dealership service department to maintain profitability.
The dealership could have avoided the boiled frog phenomenon, by paying more attention to the changing competitive environment and listening to some of the dealership's most important members, its
Service technicians who were dedicated in providing the best services possible. Fishman (1988) suggests managers should take the time to listen to subordinate employees, without interruption, without negative comment, and without defending the organization's position. Often, employees have more insight into how the organization should operate, in terms of remaining competitive within the industry. The service manager should take more interest in the competitive environment, rather than simply assuming the older generations that came in for vehicle service would continue to do so. Paying attention to the younger vehicle owners and buyers would also be beneficial. Young adults are social and have the ability to spread the world quickly, whether they are satisfied or dissatisfied with services and products. Top notch customer service develops trust and confidence, while becoming the business driver (Stone, 2012), as opposed to cost containment.
Fishman, A. (1988). Listening to gripes sometimes pay off. The Southeast Missourian. Retrieved May 4,
Ramirez, M.M. (2001). Boiled frog phenomenon: Are you killing your business? Philippine Daily Inquirer,
Business Monday. Retrieved May 4, 2014 from
Stone, P. (2012). Excellent customer service: Ten reasons to pay attention. Salesforce Desk. Retrieved May
4, 2014 from http://www.desk.com/blog/excellent-customer-service/.