- MemberJanuary 10, 2022 at 2:05 am
Many countries have been affected by global economic and financial crisis and caused rising inflation and unemployment rates. For an example, Covid-19 pandemic caused economic downturn due to prolonged lockdown. Generally, crisis is an unexpected situation that cannot be predicted in advance and it affects politics, society and the economy. The most important managerial challenges are cancelling bonuses, pay reductions, increasing employee stress and in some cases hiring will be halted. These issues cause slow performance as well. In order to manage the crises efficiently at times of recession/economic downturn, manager or management must take good decision while still under stress, to mitigate the loss or problem that the company or business facing. The decision is to choose the right strategy and to implement it. A SWOT analysis will guide to identify areas that need to be improved in order to respond to an economic downturn. It also gives the ability to identify new opportunities the economic downturn may present. Besides that, financial analysis of the business including profit, loss and cash flow will be helpful for planning or to set strategies to overcome the economic downturn. Next step will be risk management. It helps to monitor the business’s performance and to identify the issues that affecting. After identifying the risks, they should be analyzed, evaluated and treated to minimize the impact. It is important to develop and review the risk management plan. Furthermore, during the economic downturn, it is best to manage the finance by monitoring accounts and cash flow. Besides that, managing the staffs are also important during economic crisis by giving proper training for staff and also to let go some of the staff if need to, in order to save money. Networking plays important role during recession as it helps to understand how other businesses are coping and also to get to know new clients and sometimes to even to seek assistance.