- MemberJanuary 30, 2022 at 8:54 am
The macroeconomic discussions on unemployment, inflation, and growth often end in conflicting policy approaches and government intervention. What are the most important managerial challenges at times of crisis? How do we manage crises efficiently at times of recession / economic downturn?
YES, agree that Unemployment, Inflation, and growth often end in conflicting policy approaches and government intervention. During recession (economic downturn), consumer spending power decrease and they might lost their jobs, hence Unemployment increase; During boom (economic upturn), prices of the goods and services increase, thus, inflation increase. The Phillips curve relates the rate of inflation with the rate of unemployment. The Phillips curve argues that unemployment and inflation are inversely related: as levels of unemployment decrease, inflation increases. 😇
The most important managerial challenges at times of crisis, is to recognizing that a company faces a crisis is the first thing management must do. It is a crucial step, especially during the onset of crises that do not arrive suddenly but grow out of familiar circumstances that mask their nature. Top management need to strategize their plan during the recession, which department need to cut cost, where the resources should deploy, the company direction, etc. All of these decision is to ensure company survive, and this is the most important matter for company to overcome this challenges during recession.
When assessing how the downturn will impact my business I must evaluate myself on these questions:
• How will our customers behave – will they withdraw from the course or choose the cheapest course, OR turn to my competitors who offer cheaper price.
• How will our competitors react – will they cutting prices, or seek alliances with me to reduce market competition?
• What do we need to do well to minimise the impact of the downturn on us – run again our company SWOT analysis, evaluate our strength, weakness, opportunities and threat. should implement our aggresive plan or conservative plan, re-evaluate our pricing policies? 😇