Crisis prevention through competitive flexibility

The research project covers the preventive effects of competitive flexibility related to the past two years of global economic crisis. It will be analyzed, if and in which way this special form of flexibility enables companies to be extensively independent of global recessions and their destructive effects.

Due to the global economic downturn during the past two years, economic causes of corporate crises have been an everyday topic in the recent discussion. Nevertheless, the current indications for a recovery must not lead to a decrease of the controversy. Thus, it is the main objective of this research project – in contrast to the mainly symptom-based discussion focusing on current necessities – to develop an activity-oriented strategic approach to prevent companies from being affected by crises.

Therefore, it is analyzed in which way companies can use competitive flexibility as an instrument of preventive crisis management. The faster and the more precisely a company can adapt to the requirements of its environment, the better it performs in competition. As environmental requirements change especially in times of economic downturn, there is a particular need for flexibility. For this purpose, a cybernetic model of flexibility is developed, which focuses on the adaptability of a company relating to its competitive environment. Aspects of product policy and pricing are considered as well as the relations to suppliers, customers and investors.

The hypotheses constructed in the context of the model will be analyzed on an extensive empirical basis. First, relevant industries are selected based on an index reflecting the crisis concernment. Then, data will be collected and analyzed to develop implications for companies in the last step.

Because of the outstanding relevance of the topic – the crisis issue on the one hand and the requirement of flexibility on the other hand – the project delivers valuable findings for management research as well as for corporate practice.