Lessons from the Recession: : a

Citation

Adcroft, A. (1998), "Lessons from the Recession: : a", Management Decision, Vol. 36 No. 2, pp. 135-135. https://doi.org/10.1108/md.1998.36.2.135.3

Through analysis of recessions in the USA, Europe and Asia, this book offers a number of insights and thoughts on what happens when economies turn down. It considers the causes and consequences of recession, the reaction to recession on the part of the media, government, business and individuals and finally, as one would expect given the title of the book, it offers a number of lessons to be learned.

If the lessons are explicit in this book, what is much more implicit and subtle is the prescriptive subtext that runs through most of the chapters. The book aims not only to share the experiences of recession in places as diverse as the USA, Poland, Japan and China, but also aims to tell public policy makers, business managers and individuals what they can and should do about it.

In general terms, the book offers four main lessons which are common wherever and whenever recessions occur:

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  It is better not to have a recession than it is to have a recession. In times of recession, politicians are voted out of office, businesses lose profits and individuals lose their jobs.

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  The task of managers and management is easier when the economy is growing than when it is contracting. When the economy is not doing well, managers have to make difficult decisions.

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  In a recession there is always something that can be done. Governments have a number of options to control deficit spending, managers can always find new management tools and individuals can develop new skills.

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  In the dynamically changing world of the 1990s and beyond, everyone will have to behave differently from how they behaved in the past.

The strength of this book is in its description of the effects of recession. Quite rightly the book draws attention to the effects of recession on government policy and on the management of business. The general line of argument through the 14 chapters is that in times of recession the profitability of firms is diminished, they usually react by downsizing, this causes unemployment and governments experience reductions in tax revenue, increases in welfare spending and this usually results in a financial crisis of one sort or another.

Coming from a management and communications perspective, the book becomes weaker and less convincing in the analysis that it offers of what causes recessions and what governments, firms and individuals can do about recessions. In the economic world created by this book, the economy will be just fine provided that the media report more good news than bad, firms look at what others do before copying it and displaced workers get themselves a new skill to get themselves back into the job market. For example, in explaining why recessions happen, blame is placed firmly at the door of the media. In reporting the state of the economy, the media (in particular television) spend too much time reporting the bad times and not enough time reporting the good times. If the media are always telling us that it is bad then eventually we will all believe it, act like it is bad and thus it will become bad. In reality this assumption does not bear up to scrutiny. The point of an economy is that it grows and in doing so generates output, wealth and jobs. Over the long term this is what happens and so when the media report an economic downturn it is because it is something out of the ordinary. If the book is weak on what causes recessions, then it is equally weak on what should be done about recessions. Time and again Lessons from the Recession falls back on the outdated notions that firms should copy and emulate the successful in order to be successful themselves. The book uncritically accepts that benchmarking is the way forward for firms struggling during a period of recession; the key is in finding out what those who are better than you do and then measure yourself against them to give yourself a target to aim for.

In summary, this book attempts to provide an original and, at times, interesting angle from which to examine the causes, effects and consequences of recessions, but readers should be wary of being presented with two dimensional perspectives and one sided arguments.