Recession Proofing

Goals

Determine, with examples, how organizational structure can help companies succeed even in times of recession.

Early Findings

Information specifically regarding evolutionary organizational structure and recession proofing was limited. The information that was found about organizational structure in general and recession-proofing has been summarized below.

Insight

  • In order to be more 'recession proof', companies must have "an organizational structure that facilitates the flow of forecasting data and timely decision-making; and an organizational culture that supports business-cycle management activities."
  • Research has shown that a decentralized management system, one where local managers have autonomy, can help companies during times of recession. A full review of this research can be found here.
  • This is because decentralized firms can quickly and more efficiently react to changing conditions.

Examples

  • Mid-level employees at Conexant Systems Inc, a semiconductor company in California, saw the 2001 recession coming but, due to poor internal company structure and communication, were unable to convince senior managers that the recession was imminent and make changes to the company that may have allowed them to whether the recession.
  • More examples may be available in this article, but it is behind a paywall.

Proposed next steps:

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