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Running Your Business

Updated: June 1st, 2009 03:07 PM GMT-05:00

How Companies are Using the Economy as an Excuse for Poor Decisions

Roberta Chinsky Matuson
Human Resource Solutions

Leaders are using the economy as an excuse on a daily basis. Don't believe me? Just ask your managers why now it's okay to lay-off those employees who haven't come close to meeting their performance objectives over the past several years. Perhaps your company could have avoided lay-offs if the entire team had been operating on all four cylinders. This is just one example of how companies are using the economy as an excuse for poor decisions. Here are some others.

Poor planning
You can blame employees for a lot of things. However, at some point you have to take responsibility for what is in your control. Here's an example. Have you ever heard of a fast food restaurant that sells only pizzas at an airport location running out of food at 3:00 PM? According to those employees staffing the counter, this is not an uncommon occurrence. So who is to blame? Certainly not the people who are popping the frozen pizzas into the convection oven.

This is a planning and inventory problem. Not an economic problem. However, if you look at this company's declining earnings and recent interviews you will hear them say that business is down because less people are going out for pizza. Maybe less people are eating their pizza because there is no food to be had. Is this really the way to increase profits in a down economy?

Creating new expectations
Everything appears to be on sale these days. It has gotten to the point where people will not make purchases unless there is a discount associated with the price. Is this really the fault of the economy? Or have businesses created an expectation among customers and clients that has created this new reality?

What if you were to offer a product or service that people felt was worth the purchase price, regardless of what this number was? What would that mean in terms of increased revenue and profitability? In spite of the economy, people are still purchasing luxury vehicles and are patronizing restaurants where they perceive the experience is worth the money spent. Customers are choosing cool electronic equipment over cheaper less innovative products.

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