The problem with a crisis is that it does not come with a name tag round its neck. But you may be able to sense it from the many giveaway symptoms, as listed by C. Vasanta Madhavi in ‘Business in Crisis’ (www.taxmann.com). For instance, sales go down, demand declines, prices go up, costs rise, unemployment increases, stock market becomes bearish, inflation seems to fall though not leading to a price fall, companies start reporting losses, production plummets, sectors begin negating the predicted trends, currency depreciates, cross-border trade tumbles and investments take a plunge.
“The economy, industries, government, and consumers – all face the brunt alike. The economic growth slows down. Industries slow down in production, supply, sales, and profitability. Consumers reduce the spending, face unemployment and face the rising prices. Government has the tough task of boosting the economy, industries and consumer confidence…”
In such a situation, a business must first understand the crisis in detail and get a complete picture, advises Madhavi. “All players in a market are equal in the eyes of a crisis. A company should try to focus on its business by responding to the market signals like reduced demand and rising unemployment.”
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The author cautions that a government not enjoying enough confidence in its usual governance cannot win its way through a crisis; and that it may create a weak economy ambling through the recovery process.
Crisp messages.
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