Impact of Recession and Its Effects on Hrm
Impact of Recession and its effects on HRM
INTRODUCTION:
The world has suddenly plummeted into a deep economic crisis (called Global Meltdown or Financial Tsunami), the worst ever since the 1930's. It has almost taken all the countries across the globe into its grip. Almost all the sectors of economy with varying degrees have caught business by surprise during the current global downturn with so much swiftness that every day has become a question of survival. Organizations are grappling with low demand of their products, manufacturing plants are kept idling, export markets are dying, job markets are being annihilated everyday and the symptoms of slowdown are getting starker and starker with every passing day of downturn phenomena.
Definition:
A recession is a decline in country's gross domestic product (GDP), in other words, it is a suspension of growth for a period of two or more consecutive quarters of a year. It simply means 'not so much cash in hands' to play with as before resulting in harsh measures like cost cutting, lay-offs etc. A recession normally takes place when consumers loose confidence in the growth of the economy and spend less. This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spend less as they fear stock values are likely to fall and thus stock markets fall on negative sentiment.
Impact of Recession in Developed Countries: More than half of the world's economy has shrunken and among them USA- the citadel of capitalism and free market has suffered the worst. In the first ten months of 2008, there have been 1.2 million job losses in the USA and the economy has suffered heavily due to financial crisis resulting in global credit squeeze. "There is a real risk that millions will be thrown back into poverty." (Dominique Strauss- Khan, MD, IMF) In present situation down fall in one sector leads to a negative
INTRODUCTION:
The world has suddenly plummeted into a deep economic crisis (called Global Meltdown or Financial Tsunami), the worst ever since the 1930's. It has almost taken all the countries across the globe into its grip. Almost all the sectors of economy with varying degrees have caught business by surprise during the current global downturn with so much swiftness that every day has become a question of survival. Organizations are grappling with low demand of their products, manufacturing plants are kept idling, export markets are dying, job markets are being annihilated everyday and the symptoms of slowdown are getting starker and starker with every passing day of downturn phenomena.
Definition:
A recession is a decline in country's gross domestic product (GDP), in other words, it is a suspension of growth for a period of two or more consecutive quarters of a year. It simply means 'not so much cash in hands' to play with as before resulting in harsh measures like cost cutting, lay-offs etc. A recession normally takes place when consumers loose confidence in the growth of the economy and spend less. This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment. Investors spend less as they fear stock values are likely to fall and thus stock markets fall on negative sentiment.
Impact of Recession in Developed Countries: More than half of the world's economy has shrunken and among them USA- the citadel of capitalism and free market has suffered the worst. In the first ten months of 2008, there have been 1.2 million job losses in the USA and the economy has suffered heavily due to financial crisis resulting in global credit squeeze. "There is a real risk that millions will be thrown back into poverty." (Dominique Strauss- Khan, MD, IMF) In present situation down fall in one sector leads to a negative
References: - * Employee downsizing –An introduction; By SumatiReddy. • Appelbaum, S.H., Everard, A., and Hung, L. (1999). Strategic downsizing: Critical success factors. Management Decision, 37(7), 535-559. • Strategic HRM –By P.K gupta.