The unprecedented impacts of Hurricane Katrina provide an interesting study in how organizations innovate and improvise in the face of the unexpected. Most of the attention paid to organizational performance during the disaster has focused, understandably, on the systematic failures of FEMA. But were there any successes? Yes, in fact. Two of the stand out respondents were Wal-Mart and the United States Coast Guard-one a private sector firm and the other a part of the federal government. Wal-Mart's response was crucial in preventing an even worse outcome from the crisis that was experienced. Wal-Mart was the most notable among several private sector firms that arrived quickly with the supplies that people needed to survive after being cut off from the most basic necessities. In turn, the U.S. Coast guard rescued more than 24,000 people in the two weeks following the storm. While these two organizations are very different, they both succeeded in the demanding environment of post-Katrina response because they had created the right internal environment of post-Katrina response because they had created the right internal incentives for middle managers to take initiative and the right structure of communication to allow local information to determine the nature of the response.
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