This document provides an overview of the economic impacts of recessions and depressions based on historical examples over the last 100 years. It notes that recessions are defined as two consecutive quarters of negative GDP growth and depressions see over 10% declines in actual GDP. Previous recessions have severely impacted sectors like finance, construction, housing, agriculture, and aviation. The document advocates for contingency planning and proposes actions companies can take to manage impacts on revenues, supply chains, productivity, costs and employees. It emphasizes the need for cooperation between government, businesses and society to maintain confidence and overcome economic downturns.
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
Market Outlooks
We leverage a global network of investment consultants and researchers to deliver industry specific knowledge and dynamic tools, which allows our clients to make informed strategic investment decisions.
"Show me the incentive and I'll show you the outcome" – Veripath Farmland Funds Q4 Investor Letter: Investing in a World of Financial Repression, Negative Real Rates, Valuation “Challenges” and Inflationary Forces.
Do G7 governments have an incentive to attempt to keep inflation higher for longer and real rates lower for longer? Negative real rates across a broad spectrum of credit assets are a graphic sign that we inhabit a world of financial repression orchestrated by central banks at the formal/informal behest of sovereign borrowers. In a normally functioning market, lenders do not provide capital to borrowers for negative yields – i.e., they do not pay for the privilege of lending. It goes without saying we are not in a normally functioning market.
To
help senior executives weather this economic storm, the Economist Intelligence Unit has updated its
answers to some of the questions most frequently asked by clients, following the publication of the
four previous editions of Global crisis monitor. In answering each question, we outline our current
forecast, explain our thinking, and highlight any key risks or alternative scenarios.
Western governments are hopelessly addicted to deficit financing while refusing to address looming funding issues - with apologies to the embarrassingly foolish Angela Merkel, politicians can no more successfully “battle” the markets than you and I can successfully “battle” gravity. Petrocapita is an investment trust built around the premise that demand for energy will continue to move prices higher over the long-term. Petrocapita was created to allow investors to add professionally managed oil & gas assets directly to their portfolios.
Market Outlooks
We leverage a global network of investment consultants and researchers to deliver industry specific knowledge and dynamic tools, which allows our clients to make informed strategic investment decisions.
"Show me the incentive and I'll show you the outcome" – Veripath Farmland Funds Q4 Investor Letter: Investing in a World of Financial Repression, Negative Real Rates, Valuation “Challenges” and Inflationary Forces.
Do G7 governments have an incentive to attempt to keep inflation higher for longer and real rates lower for longer? Negative real rates across a broad spectrum of credit assets are a graphic sign that we inhabit a world of financial repression orchestrated by central banks at the formal/informal behest of sovereign borrowers. In a normally functioning market, lenders do not provide capital to borrowers for negative yields – i.e., they do not pay for the privilege of lending. It goes without saying we are not in a normally functioning market.
To
help senior executives weather this economic storm, the Economist Intelligence Unit has updated its
answers to some of the questions most frequently asked by clients, following the publication of the
four previous editions of Global crisis monitor. In answering each question, we outline our current
forecast, explain our thinking, and highlight any key risks or alternative scenarios.
Reinventing Your Retirement New Realities For New Challenges For Clear ViewSteve Stanganelli
This presentation is part of the Transition Assistance Plan workshop series offered through Salem Works.
While many things in life are uncertain, we can control how we make better decisions. This presentation highlights the fundamental approach needed for short-term fixes and getting back on track long-term.
Over the last year or so, there has been much talk about another impending recession and how it could impact channel management. The recession theory is based upon historical trends, which suggest business cycles tend to last around five to seven years each. That means every five to seven years we experience some sort of a recession. Eventually the economy recovers, and then something else happens to triggers another recession.
Economist Intelligence Unit (EIU) white paper produced at the height of the financial crisis in January 2009 outlining the opportunities to learn from the downturn and best practice to success in a changing environment.
Reinventing Your Retirement New Realities For New Challenges For Clear ViewSteve Stanganelli
This presentation is part of the Transition Assistance Plan workshop series offered through Salem Works.
While many things in life are uncertain, we can control how we make better decisions. This presentation highlights the fundamental approach needed for short-term fixes and getting back on track long-term.
Over the last year or so, there has been much talk about another impending recession and how it could impact channel management. The recession theory is based upon historical trends, which suggest business cycles tend to last around five to seven years each. That means every five to seven years we experience some sort of a recession. Eventually the economy recovers, and then something else happens to triggers another recession.
Economist Intelligence Unit (EIU) white paper produced at the height of the financial crisis in January 2009 outlining the opportunities to learn from the downturn and best practice to success in a changing environment.
Financial Institutions need a strategy to help maximize their level of resilience and prepare for any macroeconomic and financial scenario amid the COVID-19 crisis.
In our view, it is critical for Financial Institutions to take specific steps both for the short term and the medium term. In this White Paper we have identified ten key action points to be addressed.
After a long spell of staying in denial, the policymakers have shown some urgency in past 6 months. However, they have so far refrained from pressing the panic button. The investors are eagerly waiting to see the finance minister pressing the red button hard today.
In my view, the current state of Indian economy is akin to a person who is single wage earner for his family; has little savings; chronically suffered from hypertension and diabetes, and recently got a heart attack.
This person cannot afford to spend couple of months in bed for recuperating. He has to immediately go for work so that he can pay the bills and feed the family.
Export nations need to ensure that supply chains remain as intact as possible. This means that when and where credit insurers are withdrawing from covering international trade during this crisis, the government exceptionally steps in. Otherwise there is a risk a collapse of finely woven supply chains.”
AnsAns I am going to focus my remarks today on what is popularly.pdfankkitextailes
Ans:
Ans: I am going to focus my remarks today on what is popularly known as the “too big to fail”
(TBTF) problem. In particular, should society tolerate a financial system in which certain
financial institutions are deemed to be too big to fail? And, if not, then what should we do about
it?
The answer to the first question is clearly “no.” We cannot tolerate a financial system in which
some firms are too big to fail—at least not ones that operate in any form other than that of a very
tightly regulated utility.
The second question is the more interesting one. Is the current approach of the official sector to
ending TBTF the right one? I’d characterize this approach as reducing the incentives for firms to
operate with a large systemic footprint, reducing the likelihood of them failing, and lowering the
cost to society when they do fail. Or would it be better to take the more direct, but less nuanced
approach advocated by some and simply break up the most systemically important firms into
smaller or simpler pieces in the hope that what emerges is no longer systemic and too big to fail?
What Is the Too-Big-to-Fail Problem?
The root cause of “too big to fail’ is the fact that in our financial system as it exists today, the
failure of large complex financial firms generate large, undesirable externalities. These include
disruption of the stability of the financial system and its ability to provide credit and other
essential financial services to households and businesses. When this happens, not only is the
financial sector disrupted, but its troubles cascade over into the real economy.
There are negative externalities associated with the failure of any financial firm, but these are
disproportionately high in the case of large, complex and interconnected firms. Although the
moniker is “too big to fail,” the magnitude of these externalities does not depend simply on size.
The size of the externalities also depends on the particular mix of business activities and the
degree of interconnectedness with the rest of the financial industry. One important element is the
importance of the services the firm provides to the broader financial system and the economy
and the ease with which customers can move their business to other providers. Another is the
extent to which the firm’s structure and activities create the potential for contagion—that is,
direct losses for counterparties, fire sales of assets held by other leveraged financial institutions,
or loss of confidence that might precipitate runs on other firms with similar business models.
The presence of large negative externalities creates a dilemma for policymakers when such firms
are in danger of failing, particularly if the wider financial system is also under stress at the same
moment. At that point in time, the expected costs to society of failure are very large compared to
the short-run costs from providing the extraordinary liquidity support, capital or other emergency
assistance necessary to pre.
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Running Head: WEEK 4 1
6
Week 4 Milestone 2
Kristopher Warren
Regent University
Professor Bajah
ECON 230 Macroeconomics
19 September 2022
How do inflation, unemployment, aggregate demand, and supply in the company’s key market (country) affect the company’s profitability?
The relationship between inflation and unemployment was generally inversely proportional. Nonetheless, this relationship has been surprisingly skewed from the start, breaking up over various events over the past few years. Inflation and labor force (and unemployment) are perhaps the most tightly controlled financial indicators. So let us look at these relationships and what they mean for the broader economy. Inflation is the term used to describe the loss of control over money purchases over time. Thus, one cash unit is under-bought before the inflationary strain hits the economy. Economic analysts avoid unemployment when the number of working unemployed people exceeds the occupational stock of the labor force. Inflation and unemployment were generally inversely related. Government executive bodies rely on monetary and monetary strategies to keep the economy from overwhelming or pushing them back. The Phillips inflection shows that inflation and unemployment generally have an inverse relationship. Low unemployment is usually associated with an economic expansion, and high unemployment can lead to a decline or even collapse. Inflation fluctuates in the short term, with higher rates of expansion usually occurring during periods of prosperity or immediately following prosperity periods. For example, the most significant spurt of US economic expansion in the 20th century followed World War II and its wartime explosion. After that, the economy expanded again and fell sharply during the recession (McCausland, Summerfield, & Theodossiou, 2020).
Expanded valuing for labor and products, including work, materials, and energy, can result from inflationary tension. Organizations will see an expansion in benefits if they can give these increasing costs to clients as higher costs for labor and products. Incomes from expansion are limited at a more special rate than benefits from day-to-day corporate tasks. This way, expansion not just misleads work, result, and speculation; it additionally puts these exercises over the long haul down. The connection among organic markets affects the net revenues of organizations with stock. Oversupply, as well as low interest, will bring about high stock costs for the business. At the same time, undersupply yet rather popularity would bring about the organization now and again running out of items and disturbing clients.
Discuss the five transmission mechanisms (intertemporal substitution, uncertainty, irreversible investments, labor adjustment costs, time bunching, and network effe.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Covid19 Pandemic: Looming Global Recession and Impact on BangladeshMd. Tanzirul Amin
The following article was written by me, and was published in the Economic Trends section of the Keystone Quarterly Review (Volume-30) on July 30, 2020: https://lnkd.in/g9nGxzn
The article covers the effects of the Covid-19 Pandemic in the world economics, and the resulting impacts on the Bangladeshi economy. Various other economic aspects are covered, along with the alarming signs/symptoms of another "Great Global Recession".
In the changing world, it is imperative for the professionals to be relevant for them to add value. This paper examines various contexts and provides a framework to build a more impactful people function.
"Motivation: A different perspective" is written based on various literature review on sustainability of performance - organisational culture/behaviour/creativity/ people processes, motivation etc. It brings two specific perspectives: "SPLITS & CARE". My recent interaction with Balaji Prof C who has developed an interesting process known as "Causing Incredible Performance" with remarkable impact on people and organisations - mainly focusing on rewiring their internal voices has further validated my perspectives. Kindly provide your insights on it.
Rewiring Higher Education in Pandemic TimesBaburaj Nair
This is a presentation made during the webinar, which provides a framework - QCE to rewire Higher Education. For listening to the entire webinar, kindly view and provide your valuable feedback by connecting to: https://lnkd.in/gFD7NJF
Issues and concerns in Industry 4.0: How to build an institution and organisation and society in a future world? Should we not Stop, Pause, and Explore to reflect on What we need to build? and how to build?
Lot of research is done on Excellence, Leadership, Performance. However, a few fundamental mindset have to be developed around values to sustainability.
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
The Team Member and Guest Experience - Lead and Take Care of your restaurant team. They are the people closest to and delivering Hospitality to your paying Guests!
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Modern Database Management 12th Global Edition by Hoffer solution manual.docxssuserf63bd7
https://qidiantiku.com/solution-manual-for-modern-database-management-12th-global-edition-by-hoffer.shtml
name:Solution manual for Modern Database Management 12th Global Edition by Hoffer
Edition:12th Global Edition
author:by Hoffer
ISBN:ISBN 10: 0133544613 / ISBN 13: 9780133544619
type:solution manual
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All chapter include
Focusing on what leading database practitioners say are the most important aspects to database development, Modern Database Management presents sound pedagogy, and topics that are critical for the practical success of database professionals. The 12th Edition further facilitates learning with illustrations that clarify important concepts and new media resources that make some of the more challenging material more engaging. Also included are general updates and expanded material in the areas undergoing rapid change due to improved managerial practices, database design tools and methodologies, and database technology.
Oprah Winfrey: A Leader in Media, Philanthropy, and Empowerment | CIO Women M...CIOWomenMagazine
This person is none other than Oprah Winfrey, a highly influential figure whose impact extends beyond television. This article will delve into the remarkable life and lasting legacy of Oprah. Her story serves as a reminder of the importance of perseverance, compassion, and firm determination.
1. Page 1 of 7
Baburaj V Nair, Chief Mentor & Founder, P2B Consulting (https://www.linkedin.com/in/baburaj-nair-309a39a/)
Pessimists may indicate that the current scenario could lead to a bleak economic scenario and predict doom
scenario. Optimists may indicate that we have managed such scenarios earlier and we shall come over it,
without doubt. But a realist shall plan for a multiple scenario and will plan from a worst scenario, knowing fully
well the odds we must face, based on information garnered through different data analysis. I am therefore,
neither trying to portray a bleak scenario or an optimistic scenario, but only trying to draw a realistic scenario
and push senior management team to go for a contingency plan, urgently, pro-actively.
A study of economic depressions / recessions in global economy during the last 100 years,
directly impacting a few continents on each such events, and indirectly impacting other continents
and countries can provide a few insights for us. One economist jokingly defined recession and
depression as, "If your neighbour gets laid off, it's a recession. If you get laid off, it's a depression”.
More scientifically, a recession is defined when two consecutive quarters of negative growth in
the gross domestic product (GDP) happens. In other words, during this time, "a significant decline
in economic activity spread across the economy, lasting more than a few months” can be felt.
Depressions can be defined as drastic economic downturns in which actual GDP falls by 10% or
more and takes more time to recover. Normally, the impact of a recession goes through a year-
long economic impact cycle.
Such a severe event is bound to increase the government’s deficit. This is because the
government’s revenues shall fall and its expenditures rise, with extra payments to the casualties
of the slump, whether households or banks. Cutting the deficit by cutting welfare becomes the
litmus test of a government’s determination, especially in a democratic country. Once a downturn
gathers momentum, the scale of intervention needed to reverse it becomes frighteningly large.
Budget deficits balloon, public debts soar, governments take over banks – all conjuring up visions
of looming state bankruptcy.
Even before the advent of COVID, the risk of a recession beginning in the next 12 months is
estimated to be 20%, according to The Wall Street Journal’s survey of economists. Irrespective
of this, many CEOs/CHROs are still in a reactive, pause stand: waiting for the scenario to emerge
and then act.
Lessons from earlier such recessions/depressions indicate a few or many of the causes given
below, impacting the economy – macro and micro.
• Stock market crash (Investors will pull money out of the stock market. This will drain capital out of the businesses
and cause an economic slowdown).
• Bank failures: Risky lending, Inadequate fiscal policy. Banks tighten their lending standards, slowing the economy
even further.
P2B Consulting – People Process to Business Results
EMPLOYEE PRODUCTIVITY & COVID
2. Page 2 of 7
• Housing Crisis: When the prices of houses fall the owners start losing equity. They can-not pay their mortgages or
take second mortgages on their homes. This may lead to foreclosure, as happened in 2007-08. Though the direct
impact in countries like India due to this will not be high, if other dependent countries economy fail, it will adversely
impact our economy too.
• Exogenous shocks such as wars or sudden declines in the supply of key goods.
• Rising bankruptcies: Economic Scandals and Frauds: Sometimes banks, large corporations, and even government
institutions employ questionable practices and illegal activities to boost profitability. When such schemes and scandals
are exposed, the entire economy suffers. Many such instances in India and abroad are known to us.
• A slowdown in industrial production and manufacturing
• Widespread, prolonged drought
• International trade collapse – impacting foreign investment
In earlier instances, the major impacts were on Financial Institutions, Construction, Housing,
Agriculture, Gas & Petroleum, and Aviation sectors. However, in the current scenario, if a single
larger (say Fortune 1000 company) gets impacted, all its ancillary organisations, which have a
symbiotic business relationship with the larger company shall get very adversely impacted. Some
of the impacting areas could be:
1. Sales revenues and profits decline:
2. Falling stocks and declining / No dividends: Declining revenues show up on its quarterly
earnings report, stock price may decline; Dividends may also slump, or disappear entirely.
3. Dampens company's accounts receivable (AR), leading to poor cash flow cycle impacting
other companies too. Making late or delinquent payments will reduce the valuation of a
corporation's debt, bonds, and its ability to obtain financing. It can further lead to other
tightening measures, which will impact the organisation’s future growth
(expansion/acquisition/merger etc.)
a) Extremely tight credit norms
b) Cut back on hiring new employees, or freeze hiring entirely.
c) All future investments (capex or otherwise) in abeyance: stop buying new equipment (a factor of
expansion of business gets hit)
d) Curtail on research and development expenses ; Stop new product roll-outs, Drastic reduction in
expenditures for marketing and advertising.(Decline in advertising expenditures will whittle away at the
bottom lines of giant media companies in every division, be it print, broadcast, or online)
e) Retrenchment of employees, and more work will have to be done by fewer people resulting into lower
morale and lower productivity, if not managed effectively.
f) May be forced to close plants and discontinue poorly performing brands/outlets.
g) May compromise on quality, and thus the desirability of its products.
4. The company's ability to service its debt (pay interest on the money it has borrowed) may also
be impaired, resulting in defaults on bonds and other debt and further damaging the firm's
credit rating. A company's debt may need to be restructured or refinanced, meaning new
terms will have to be agreed upon by creditors. If the company's debts cannot be serviced
and cannot be repaid as agreed upon in the lending contract, then bankruptcy may ensue.
3. Page 3 of 7
The company will then be protected from its creditors as it undergoes reorganization, or it
may go out of business completely.
Impacts adversely on Small Businesses: Without major cash reserves and large capital
assets as collateral, and with more difficulty securing additional financing in trying economic
times, smaller businesses may have a harder time surviving a recession. Bankruptcies among
smaller businesses typically occur at a higher rate than among larger firms. Too many
bankruptcies may also discourage banks, venture capitalists, and other lenders from making
loans for start-ups until the economy turns around.
5. A decline in real income shall impact adversely on consumer spending and reduced
consumer purchasing power. This vicious cycle reduces consumers' purchasing power and
firms' revenues to the point that they miss mortgage and business loan payments. : When
the wages and salaries of workers do not increase with the same level as the inflation in the
economy, the purchasing power of the public will reduce. He will not be able to afford the same
goods and services that he use to. This can cause an economic slowdown. Consumers
drastically cut back on spending, putting additional pressure on firms and setting off further
job cuts.
6. Lack of confidence among consumers and public, making them to take panic decisions.
a. In earlier instances, the International Monetary Fund had to step in to create bailout packages for the most-
affected economies to help those countries avoid default. But, in current situation, the countries seeking
help would be many, prioritising and providing such a support by the IMF also would be quite challenging.
b. Required government bailouts of unprecedented proportions. In earlier instances, it took almost a decade
for things to return to normal, wiping away millions of jobs and billions of dollars of income along the way.
Capitalism is a continuous process of destruction and renewal in which entrepreneurs play a key
role in overhauling the system (20th-century Austrian economist Joseph Schumpeter). This
enables long-term growth and balanced Economic Growth. Therefore, many larger companies
may look ahead and consider these events as “Constructive destruction” (economic decline
allows the economy to clean out the excess. Inventories drop to more reasonable levels.
Moribund firms that had limped along during a period of expansion go out of business, allowing
capital and labour dedicated to them to be used in more productive ways. It creates buying
opportunities. The S&P 500 stock market index, for example, shot up 285% from its trough in
2009 to October 20, 2017, after 2008 recession).
nCOVID Context and the way forward:
Therefore, some of the larger conglomerates will wait and watch how the situation is
developing. But, if the current situation continues, impacting all countries adversely it
will uproot the basic tenets of rural economy and its impact on consumers/companies,
and even governments could be devastating.
The solutions to the economic crisis are not easy. Consumer confidence is a definite
factor. If a consumer believes that the economy is in downturn he will spend less money
and invest less money as well. This will have an adverse impact on the economy. Hardly
any sector is recession-proof, but some sectors are not too sensitive. Healthcare is the
best example of very light exposure to recession risk, as are some other services.
4. Page 4 of 7
On the opposite end of the spectrum, construction and capital goods are highly cyclical
and may be much worse off than general news reports.
Therefore, I strongly feel that a contingency plan to manage the environment would be
highly desirable at this juncture. A broad framework is created, and others could build on
it.
This scenario warrants a dramatic difference in approach.
a. Build a symbiotic relationship among all stake holders, including government, and
society. The most critical factor here is to create confidence in the society and not
making them panic. A healthy and confident society can help manage any big crisis.
A more pro-active, multi-layer involvement is a must to make it happen. This will
also bring a more robust co-dependence among this triad.
Must be triangular approach: Corporates, Government, and Society. Here, society includes employees
at large, and not just in its company, but in its ancillary companies too. Government must have a global
as well as local reach.
Multiple business associations – sectoral and non-sectoral have to immediately convene meetings to
define a contingency plan and advise governments on what support is required.
Media should have specific guidelines on “how to communicate in such environment”.
Consumers/people shall have a panic mindset and will start taking decisions which will adversely impact
even a well-planned execution. Therefore, it is critical to have a complete road map available with media
and transparent process is made between government, corporate, media, and society. This is one of
the most critical area to be addressed.
Central Government needs to ensure that a strict policy/guideline must be implemented without any bias
– political and religious and more important people should feel that the actions are just, fair and a must
need.
Judicial code of conduct must be redrafted. It must be communicated to all politicians which factors shall
be entertained by the Judicial system on this context to avoid waste of judicial time, and more critical
taking undue advantage and using it for political mileage.
Each Industry collectively can create a fund which can be used to support that industry with the active
support of the government. Norms for fund creation and tax benefit need to be discussed and firmed up.
Banking sector must have clear guidelines from RBI and Financial sector and no deviation to be
appreciated and immediate action with big penalty including dismissal from services and imprisonment
should be made to ensure that all are aligned and work together with a purpose of saving the nation.
The government can be stronger and take more forceful directional decisions only
if the captains of various industries – irrespective of political lineage – come together
and support the government. Therefore, the triad need to be formed with specific
broad guidelines to ensure that such support is not mis-used by any government.
b. Focus on the entire Corporate Business value stake holders – externally, rather than
just internal focus. It should have a global reach, cutting across the continents.
5. Page 5 of 7
Understand challenges and see how to re-align and support. The focus should be on how to survive
and not how to increase return. Have the courage of sharing difficulties and build a more robust working
relationship.
Redefine credit terms and have a plan of actions on deviations
Ensure that “transparency, authenticity” is a major value
Redefine product mix and market segmentation. Use Co-opetition principles (A revolutionary
mindset that combines competition and cooperation)
Imagine all possible psychological changes in Consumer Attitudes and therefore impact on the
business: Economic hardship can create a change in the mindset of consumers. This generally causes
the national savings rate to rise and allows investments in the economy to increase once again. (learn
from new economic concepts such as Chrysalis Economy, Behavioural Economy (Nudge concept is
one of behavioural science factor) and redefine its sales process. Involve all key stake holders in
mapping to have proper ownership.
c. Focus on the entire supply chain – backward and forward. Distribution and logistics
would be a major challenge.
The migrant labour – availability and safety – is going to be a major challenge. Whether scarcity will
increase the cost of labour? Whether government can intervene? Can they be more involved team
members, than currently being made to feel.
Inter-state / international national logistic planning. Higher cost needs to be factored in such initiatives.
d. Focus on productivity. It is more sensitive due to its societal values, economic
impact, and political overtones. Hence, until and unless it is planned well in
advance, and executed with a positive long-term perspective, any decision on
retrenchment shall back-fire.
e. Unproductive employees, irrespective of investment on them to improve and
contribute. Even at senior level, this needs to be implemented. Generally, at senior
level, due to position or due to longer services, not much actions are affected at the
people at senior level and actions are initiated more due to “non-alignment with
other members”, rather than just unproductive. A more transparent, authentic,
action plans cutting across has to be planned.
Each company must plan the reduction of manpower keeping the culture and impact. Finance, culture,
values, and the conviction of the leadership are critical in making a well-planned process to be
implemented without backfiring.
This should be the last resort but can be communicated well in advance to avoid any unpleasantness.
Focus on Organizational Obesity: Study the entire organisation and see where and at what level the
organizational obesity exists. It can not be same for each function, and hence had to study effectively
for each function – age, demography, skill sets, expected contribution, future growth plan etc.
All such decisions together to be brought to the notice of government to ensure that if any specific
support can be provided to these personnel and support from Income Tax benefits.
6. Page 6 of 7
f. Operational cost reduction:
Create a committee – cross functional, cutting across the levels – and categorise them on ABC level –
High, Medium and Low probability. Have a framework ready for them to work. i.e. how much to be
reduced at which area, periodicity or abeyance for a period etc.
Unviable plants have to be closed down and the unit/space if it is owned to be used more creatively.
Ensure Quality of service or products are not hampered – but alternative process like packaging,
inventory management, lower content etc. can be explored.
Create an Employee connect process plan. To ensure that any employee who have supported the
company in the environment is helped and supported in the best possible manner in future and in some
cases even in current environment.
Opportunity of salary cut.
As the recession increases in severity and length, management and labour may meet and agree to
mutual concessions, both to save the company and to save jobs. The concessions may include wage
reductions and reduced benefits. Studies of rise in Unemployment due to job losses (6% to 11% during
a recession, and it can hit upto 25% during depression) have shown that the involuntarily
unemployed tend to suffer higher levels of anxiety, stress and depression than the employed, as well as
more frequent hospital admissions and premature death.
Further lessor income means, lessor purchasing power with the consumers and that will impact the
overall business cycle.
Hence, this is a very sensitive process and needs to be planned with utmost care.
▪ Fix an amount and above that the salary cut can be implemented. ( In some international companies,
actions already initiated from 1st April. Chairman (100%) Sr. Management (50%); Middle
Management (40%); and Junior Management – 30%. But, in India, keeping the culture of the
organization, and involving unions and key working-class employees, a definitive more innovative
process can be initiated.)
▪ Furloughs can be implemented.
▪ Part-time jobs can be given for a fixed period and the same can be made to full time role when the
company comes back to growth mode.
▪ Fexi-time and flexi compensation can be planned.
▪ Minimum sustainable income based on family members to support can be planned and executed.
▪ Piece work based compensation – if appropriate
▪ Productivity based income, after a sustainable income while working from home.
▪ Deferred income process with a commitment to return the deferred salary, if the situation returns to
normal. This should be a board commitment.
▪ Re-aligning all benefits and performance related rewards.
▪ Utilising all leaves, if the company has a policy of 120 and more PL accumulation policy or sick leave
accumulation policy. Re-align in a manner that it will not impact the employees with longer service.
▪ Old versus new employment for people who are not adding value and becoming aged. Deploying
their children if they are good and capable.
7. Page 7 of 7
Most of us know the truth, but are not willing to accept the same, due to huge uncertainty
and the inability to manage this uncertainty. We must realise that nobody has any clue
on what is going to happen and how it is going to be impacted our daily life as well as life
itself.
But, together, if we plan ahead with a sense of survival and purpose, we can definitely
come out with a more effective solution, than groping in darkness and acting based on
“what others do”, and getting into a psychologically bad blame game.
Such an attitude shall not help the government, who is going to be the key player during
this entire process. Strengthening that entity as a team and holding them accountable is
possible only if the Corporate world – small, medium, and large – come together with a
purpose: Survive with the Society.