Economic Recession
Glynn Lowth, Malcolm Prowle, Michael Zhang
Nottingham Business School
The impact of economic recession on business strategy planning in
UK companies
Research executive summary series
Volume 6 | Issue 9
Key findings:
The key findings from this research were:
• There is very little optimism about the prospects for the UK economy in the short to medium-term.
• There is quite a degree of optimism from companies about their own commercial future based on a combination of factors such as: accessing overseas markets, improving the way they do things, better customer relations, product innovation etc. • Businesses recognise the importance of having a robust business strategy to guide them through a recessionary period. However, what was done in response to the recession largely conforms to the emergent theory of strategy formulation discussed within. • Although there have clearly been in-depth discussions and analysis about how existing business strategies might change, the changes made were largely amendments to existing strategies, with changes of emphasis, focus, timing etc.
• Most companies seem to be applying many aspects of a retrenchment approach to business strategy (e.g. reduced fixed costs, narrower product offerings, reduced staffing) but there are also some aspects of an investment approach which can be observed. However, the potential for these investment approaches is conditioned by concerns about getting access to capital finance.
• Both in terms of liquidity support and access to capital finance, there are concerns about the attitude of UK banks in relation to small to medium businesses.
• Companies have identified several managerial areas where they felt the robustness and quality of the approaches being applied had been allowed to decline in recent years. As a consequence of the challenges of a recession, urgent improvements have had to be or need to be made.
Overview
Contextual factors
The UK economy
Nottingham Business School
The impact of economic recession on business strategy planning in
UK companies
Research executive summary series
Volume 6 | Issue 9
Key findings:
The key findings from this research were:
• There is very little optimism about the prospects for the UK economy in the short to medium-term.
• There is quite a degree of optimism from companies about their own commercial future based on a combination of factors such as: accessing overseas markets, improving the way they do things, better customer relations, product innovation etc. • Businesses recognise the importance of having a robust business strategy to guide them through a recessionary period. However, what was done in response to the recession largely conforms to the emergent theory of strategy formulation discussed within. • Although there have clearly been in-depth discussions and analysis about how existing business strategies might change, the changes made were largely amendments to existing strategies, with changes of emphasis, focus, timing etc.
• Most companies seem to be applying many aspects of a retrenchment approach to business strategy (e.g. reduced fixed costs, narrower product offerings, reduced staffing) but there are also some aspects of an investment approach which can be observed. However, the potential for these investment approaches is conditioned by concerns about getting access to capital finance.
• Both in terms of liquidity support and access to capital finance, there are concerns about the attitude of UK banks in relation to small to medium businesses.
• Companies have identified several managerial areas where they felt the robustness and quality of the approaches being applied had been allowed to decline in recent years. As a consequence of the challenges of a recession, urgent improvements have had to be or need to be made.
Overview
Contextual factors
The UK economy