Linda Yueh, an economist, shared an article about how managerial practices influence the ability of economies to weather large shocks such as the Great Recession and the more recent Covid-19 crisis. The article draws useful insights from the Great Recession to understand how to build managerial talent and logistics in cushioning economic shocks from crises such as the coronavirus.
Research suggests that countries with a higher quality of management prior to the Great Recession were able to limit employment losses by moderating real wage growth, the article noted. However, economists also believe that the effect of management quality on macroeconomic outcomes could be quantitatively different for Covid-19 and its recovery, but qualitatively similar.
The Covid-19 crisis has highlighted the importance of the swift reorganisation of tasks and logistics to cushion economic shocks. This implies rapidly deploying teleworking and online services, reorganising supply chains, and supporting firms to preserve skills, production, as well as market shares.
Many studies have suggested that effective managers respond to exogeneous microeconomic shocks by reallocating workers to preserve, develop and utilise workers’ skills, maintain their incentives and satisfaction, and preserve productivity, the article detailed.