Recession motivates executives to improve decision-making, according to study

2009-08-04 08:55
Hong Kong--(뉴스와이어)--Economic uncertainty puts a premium on good decision-making, say corporate executives faced with the challenges of navigating the recession. So suggests a survey of 229 senior executives worldwide summarised in a study from the Economist Intelligence Unit entitled Management magnified: Getting ahead in a recession by making better decisions, sponsored by SAS.

Recessions tend to expose organisational weaknesses that might have remained undetected in more settled times. Recessions also open up entirely new opportunities, as competitors scale back and customers seek value. By gathering the right information, systematically analysing it and routing it to the appropriate level of authority, organisations can make quick and informed decisions to rectify flaws and seize opportunities, concludes the study.

“In previous recessions, companies that re-positioned themselves were able to shine when the recovery came,” said Dan Armstrong, the editor of the study. “Companies with a clear and solid long-term plan can use a downturn to secure an unassailable market position, at a time when their competitors are struggling to survive.”

Key findings of the study include:

· Survey respondents sought to diversify the sources of information used to make vital decisions: 46% looked for more insights from middle managers, 57% cited the importance of customers and 33% mentioned providers of capital.

· Two-thirds of respondents said that the most important source for good decision-making came from the financial and operational information held by the finance function and interpreted by the chief financial officer.

· Functions with direct links to customers (sales, marketing and customer service) were each mentioned by about a third of respondents as crucial to decision-making.

· About 39% of respondents cited the strategic planning function as important for good decision-making.

· Decisions at the worst-hit companies surveyed emphasized the short-term and tactical, focusing on survival rather than on long-term strategy.

· The downturn has led 96% of those surveyed to improve the efficiency of their operations and 53% to focus more closely on key customers.

Overall, the survey suggested that recessions exacerbate the tension that all businesses experience in trying to achieve a balance between short-term business needs and long-term development and expansion. A significant majority of businesses respond to a more challenging environment by focusing on costs, customers and survival. Four in ten regard the recession as an opportunity to invest in product development and get ahead of their competitors.

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