Having a Successful Business in the Crisis

According to Brian's post, there are three actions the firm should take in the economic crisis, and those are promoting employees, recruiting new employees, and preparing for an economic boom. I, however, disagree with these three statements. They may be ideal, but I don't think they are possible.

When the company is in financial crisis, it is difficult promote their employees well. They could possibly give them additional projects requesting their help and input on how to save money in the company. They could sign contracts promising them bonuses, such as those promised to the AIG executives. With those bonuses, however, the employees had to receive pay cuts. Their salaries were reduced to about $1 per year because the bonuses were supposed to make up for it. Then the company could end up in trouble like AIG and having to pay back the bonuses from government bailout and bankruptcy charges. Now the employees have been driven out of their jobs completely. Reports say the families and executives have been harassed by the public and have decided to resign. Promoting their employees certainly backfired. -AIG backlash

The second point of the blog states that it would be beneficial to hire new employees. When a company has been laying off workers and making pay cuts, how are they supposed to have enough money to pay new salaries and benefits to new recruits? A financial crisis is a difficult time in which to find a job. -Who's Hiring These Days Most jobs are seeing pay cuts or job losses. The only jobs I see that could be available are those in advising risk management strategies, those helping to cut costs for companies, and those of the FDIC, who takes over when banks fail. And banks have been failing a lot lately.

The third point states that the company should prepare for an economic boom. I desagree. The company should be trying to manage their risks and minimize their costs to ensure their economic situation does not get worse. The executives need to be studying the financial crisis in order to prevent another one from happening. Also, abcnews.com reports the crisis is far from over. -Crisis I think that preparing for an economic boom is completely ignoring the financial distress. Also, if the company is successful in an economic crisis, I'm sure they will have no problem being successful in a boom. In addition, the companies have worked in economic booms before, so they can simply revert to the previous methods of work before the crisis, but remembering to keep the risk management that has been implemented. This way, they can be successful, but also prevent future crisis.