40% execs doubt their cos' ability to manage crisis: Survey

NEW DELHI: A significant over 40 per cent of senior managers worldwide doubt their companies' strategy to navigate through the present economic downturn, say a study.

"As much as 43 per cent of senior managers doubt that their (companies') leadership has a credible plan to address the economic crisis, while an even greater number of around 46 per cent are not sure that their leadership could carry out the plan, credible or not," says a survey by global consultancy Booz & Company.

Meanwhile, about three-fourth of senior executives worldwide consider their companies to be financially strong despite the recessionary conditions, the survey revealed.

"The speed with which the crisis has unfolded has left most companies in a shock, struggling for the right strategy to manoeuvre through the downturn. While the optimism of the senior managers shows they are less aware of the risks from the slowdown," Booz & Co Managing Director-India Suvojoy Sengupta said.

More than half of the respondents (54 per cent) expect crisis to ultimately have a positive impact on their company and be able to emerge from the crisis stronger, it said.

However, the survey found their optimism does not square up with their balance sheets and there is a disconnect between many companies' financial/competitive position and strategic response.

"The CEOs of leading global companies need to rethink their strategies, as there liquidity positions are precarious after there debt-fuelled growth binge wherein firms had chased valuations rather than old fundamentals of revenues," Sengupta said.

Geographically, the survey captured responses from managers in 65 countries which includes India, UK, Switzerland, North America and Western Europe.

In India, as much as 85 per cent of respondents believe their company is financially strong and nobody thinks they need urgent financial support.



The Booz & Company survey conducted in December 2008 of 828 senior managers, explored how well corporate executives are handling the global economic crisis, the actions they are taking and the impact on the companies' social responsibility agendas.

Further, as much as 65 per cent high number of hard-hit companies worldwide are not doing enough to ensure their own survival, such as accelerating efforts to dispose of assets or secure external funding, the survey revealed.

Besides, among companies that state they are financially strong, one-quarter of them are not taking advantage of opportunities to improve their position in the crisis.