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The
lurking fears of an impending slowdown, are no longer
just fears or mere troubling thoughts. They have suddenly
become too real to be turned a blind eye to. Among its
multitude of effects the September 11 terror attacks
had on the world in general, and the US in particular,
that of ushering in the economic slowdown is one of
the most prominent one. Till then these issues could
be best described as nagging doubts at the back of one's
mind which everybody wished were proved as wrong. But
the reality as it turns out, is that the world and particularly
USA is facing a severe economic slowdown.
America
has become the nucleus of the world both in the
political and the economic scenario. After the end of
the cold war it is the sole super power, a world
leader that no one openly dared to disagree with leave
alone disobey. In economic terms too, America has been
the center of industrial well-being. It is the
motherland of most of the multi-national corporations
operating across the world besides being the largest
consumer of goods and services. The changes brought
about by these attacks made the recession a hard fact
to be dealt with immediately. The drastic events of
the external environment called for a revival in the
corporate strategy. The vibrant environment of the
1990s had already made companies nimble and flexible
in their strategies but that did not help them much in
warding off the impact of the slowdown. Most companies
were caught unaware, some so, because they refused to
acknowledge and assimilate the fact that business had
slowed down. And so did not change their strategy to
the changing circumstances.
But
once the cat was out of the bag companies had no other
option but to react. They did so using a number of
measures. The first is shedding the extra flab by
cutting down the work force. The list of companies
that have cut down their manpower enmasse is endless.
Other cost cutting measures include tighter inventory
control, changing reward and incentive systems, etc.
During a downturn when there is fall in the demand it
is the cost control that proves to be essential for
keeping the company from getting into the red. From a
situation where companies were recruiting personnel
left, right and center today we are in a situation
when companies have become very particular about the
skill sets they require if at all they are planning
any recruitment in the first place.
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