BUSINESS STRATEGIES AND PERFORMANCE
DURING DIFFICULT ECONOMIC CONDITIONS
For the Department of Business Innovation and Skills (BIS)
Small Business Research Centre, Kingston University
School of Management, Bath University
1. INTRODUCTION, RESEARCH OBJECTIVES AND METHODS
2. RESEARCH CONTEXT
2.1 Defining Difficult Economic Conditions
2.2 The Current Crisis
3. ANALYTICAL FRAMEWORK
4. THE BUSINESS STRATEGY AND MANAGEMENT LITERATURE
4.1 Business Strategy: General Considerations
4.2 Strategic Adaptation to Environmental Jolts, Turbulence and Radical Institutional Change
1 4.3 Strategic Adaptation to Recession
4.4 Retrenchment Strategies
4.5 Investment Strategies
4.6 ‘Ambidextrous’ Strategies
4.7 Business Size as an Influence on Strategic Adaptation to Difficult Economic Conditions
1 4.8 International Experience
5. CONTEMPORARY COMMENTARY ON THE CURRENT CRISIS
6. STRATEGIC RESPONSES IN THE RECESSION: DELIBERATIONS FROM A THINK-TANK
1 6.1 Introduction and Objectives
6.2 Business Responses in Recession
6.2.1 Knowledge Base
6.2.2 Unevenness of Recession
6.3 Modelling Strategic Change
6.3.1 Typologies of Strategic Change
6.3.2 Strategic Thinking and Strategic Actions
6.4 The Role of Innovation under Recession Conditions
6.5 Roles for Public Policy
6.5.1 Legitimise Change and Innovation within Organisations
1 6.5.2 Stimulate Experimental Approaches to Supporting Innovation
1 6.5.3 Promote the Provision of Finance
6.5.4 Pay Attention to Business Exits
6.5.5 Consider Small Firms/New Firms Initiatives
6.5.6 Redefining sectors and cross-sector initiatives
6.5.7 Policy Messages for Recovery
6.5.8 Harnessing Creativity and Sources of National Excellence
1 6.6 Conclusions and Implications from the think-tank
7. ASSESSMENT OF DATA SOURCES
Introduction and Research Objectives
• This report reviews the available literatures in order to: (i) identify the pressures, threats and opportunities facing businesses operating in difficult economic conditions such as those currently being experienced in the UK and globally; (ii) identify the strategies adopted by businesses that have experienced such conditions; and (iii) assess which strategies proved to be problematic and those that have allowed businesses to respond dynamically, survive and emerge strongly as economic conditions improved.
• Sources for the report include academic studies of business responses to recession and other ‘environmental jolts’, contemporary commentary on the current crisis, and the deliberations of a ‘think-tank’ involving leading academic experts on business strategy and management.
• The literature directly focused on business responses during recession is limited and partial. The search was, therefore, extended to wider literatures on business responses to environmental shocks/jolts, ‘endgame’ strategies in declining industries and business turnaround. These literatures provide support for the analysis presented, although their relevance to recession conditions has to be demonstrated rather than assumed.
• Previous recessions provide pointers to possible business responses but, given the specificities of the current crisis, it is difficult to predict trends or prescribe courses of action with a high degree of confidence in their likely success.
• The increasing globalisation of economic activity – the interconnectedness of economic activity across national frontiers - renders the current crisis different from previous recessions.
• The current recession may well constitute a ‘structural break’ or ‘phase shift’ in the economy,...
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