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Businesses should find ways of harnessing it meaningfully, and not squandering it with ill thought-out decisions.<\/p>\n
The global COVID-19 pandemic is something we have all had to adapt to. We are on unfamiliar ground, where a host of new words and phrases has become commonplace: social distancing, furloughing, lockdown.<\/p>\n
One word, however, now connected to COVID-19 is all-too familiar: recession.<\/p>\n
But, according to Javad Marandi,<\/a> how companies respond to this particular recession will be subject to close scrutiny.<\/p>\n What coronavirus has done is to accelerate an aspect of business that has already been making serious inroads. That aspect is social responsibility.<\/p>\n What the looming recession is now poised to do is highlight what are economically necessary responses in a recession, but also what are socially unacceptable actions.<\/p>\n A major one of these is asset stripping.<\/p>\n The bargain basement approach<\/strong><\/p>\n During a downturn, companies can run into trouble. This makes them vulnerable.<\/p>\n Recessions can create cut-throat environments, where one company (or an individual) takes control of another, sells off its under-performing assets, and leaves it as a hollowed-out shell.<\/p>\n Unfortunately, along with mass job-cutting, asset stripping has become a common practice in challenging economic conditions.<\/p>\n Profit-or-plunder merchants are economic predators, and a recession provides them with a wide hunting ground.<\/p>\n The problem is where there can be blurred lines between asset stripping and what private equity firms call valuation creation.<\/p>\n And traditional strategic responses to recession put cutting costs high on the to-do list, along with focusing on core areas of business and putting investment or capital expenditure plans on hold.<\/p>\n There are clear signs, however, that the culture of business is shifting, and that the old knee-jerk responses to recession are no longer socially acceptable.<\/p>\n The unacceptable face of capitalism<\/strong><\/p>\n COVID-19 has shone a spotlight on business practices, and highlighted those enterprises that are perceived to be failing their employees.<\/p>\n For example, the planned redundancies<\/a> announced by British Airways, in spite of the extension of the Government furlough, have been branded a disgrace by MPs.<\/p>\n There is a feeling that, in a time of national crisis, business responses need to put people’s interests and needs first.<\/p>\n While COVID-19 has accelerated and accentuated these feelings, however, change has already been in the air.<\/p>\n You only have to consider the public downfall of Sir Philip Green to see how his particular form of buccaneering business is no longer seen as acceptable by many.<\/p>\n Behind the story of a Midas-touch that has gone wrong, there are issues to do with poor business ethics, cashing in on a dying business (BHS), and the consequent damage to his public persona.<\/p>\n Changing the system for good<\/strong><\/p>\n What, if any, opportunities does a recession offer?<\/p>\n The old model suggests it’s a time to be strategically decisive, regardless of the human cost.<\/p>\n Weaker companies are ripe for the picking, and redundancy is a tool for increasing profits by slashing costs.<\/p>\n But what if the opportunities for change were more profound, and positive?<\/p>\n There are indications that in some sectors and areas of life, COVID-19 will have a lasting effect on our behaviours.<\/p>\n Working from home may turn out to be a permanent fixture for many businesses, along with flexible working hours.<\/p>\n Does this kind of flexibility offer a way of avoiding large-scale job cuts and the hollowing-out of businesses in the pursuit of efficiency?<\/p>\n The blurring of boundaries between home and the office, and the wholescale rearrangement of work-life balance during lockdown, point the way to an alternative, more socially responsible, approach to doing business.<\/p>\n But to change the system there has to be a commitment to act differently.<\/p>\n Business owners should no longer use limited liability as a means of squeezing out every last grain of value from a company then walking away when things get tough.<\/p>\n And employers should consider how they can preserve jobs through embracing flexibility, rather than cutting them as a first resort.<\/p>\n Being socially accountable<\/strong><\/p>\n Business does not exist in its own bubble, separate from society. If lockdown has taught us anything, it is that we value our communities and businesses that support them.<\/p>\n There is an enormous amount of goodwill out there, despite the fear and uncertainty.<\/p>\n Businesses should find ways of harnessing it meaningfully, and not squandering it with ill thought-out decisions.<\/p>\n Tags:<\/b> JENNA HAMILTON <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"See Campaign: <\/strong>https:\/\/www.legalreader.com\/in-a-post-covid-economy-asset-stripping-is-socially-unacceptable\/<\/a>
Contact Information:<\/b>
JENNA HAMILTON <\/p>\n
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Businesses should find ways of harnessing it meaningfully, and not squandering it with ill thought-out decisions. The global COVID-19 pandemic is something we have all had to adapt to. We are on unfamiliar ground, where a host of new words and phrases has become commonplace: social distancing, furloughing, lockdown. One word, however, now connected to … Continue reading In a Post-COVID Economy, Asset Stripping is Socially Unacceptable<\/span><\/a> Continue Reading