Planning for Recessions: Turning an Economic Slump to Advantage

Business managers are often inadequately prepared to lead their companies through a recession. They tend to treat recession as an externally imposed situation over which they have little control. In most companies, the manager views recession as a period in which real work cannot be done; this attitude results in an unduly impulsive reaction and the hope that the problem will disappear. Instead of hoping recessions will go away, managers need to utilize the facts of the slowdown to find future opportunity. When managers perceive a slowdown as a regular, ordinary, and normal business occurence, they can develop strategies that will be advantageous to the future of their company. Management's recession strategy must be put into effect in an orderly manner prior to a crisis atmosphere taking over. The choice of strategy depends upon: 1. the nature of the company's business, 2. its economic health prior to recession, and 3. the personal inclinations of the manager. Four strategies for recession management are discussed: 1. cutting back, 2. strengthening the company, 3. stimulating sales, and 4. building for tomorrow.