Glynn Lowth, Malcolm Prowle, Michael Zhang
Nottingham Business School
The impact of economic recession
on business strategy planning in
Research executive summary series
Volume 6 | Issue 9
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.
The UK economy recently emerged from a long period
of economic recession. National statistics and surveys
provide generalised findings of the current state of business during and after recession but fail to offer insights into how UK based businesses made (or failed to make) strategic
responses, during the period of recession and subsequently.
Against such a backdrop, this project is concerned with the
strategic responses made by a small but varied sample of
businesses in response to stringent economic conditions
resulting from economic recession.
This section briefly discusses some key factors, drawn from
published literature relevant to any consideration of business strategy in the current economic climate. For more detail on these issues the reader is referred to the full version of the report mentioned above.
The specific aims of the project were to:
obtain a perspective of how businesses of various types saw the recession in terms of length and depth
understand the impact of recession on the businesses and the actions they took in the short/medium term to deal
with the challenges of recession
obtain a view as to how businesses might plan to change their business strategies to deal with the impacts of the
consider any management and financial management
implications which ensued.
The researchers would like to thank CIMA for funding this
A fuller version of the project report including relevant
references and sources can be obtained from Professor
Malcolm Prowle at Malcolm.email@example.com
The nature of economic recession
Having formally come out of recession the future prospects
for the UK economy seem still somewhat gloomy with a
considerable degree of pessimism about the longer term.
However this latest recession is often regarded as being
different from previous recessions because of the impact of
Credit Crunch - banks have had serious liquidity problems and became very risk averse about lending to business...
Please join StudyMode to read the full document