Most Romanian CEOs don't expect recovery in 2011, A.T. Kearney study finds
Two thirds of business leaders in Romania do not expect a significant economic recovery in 2011, while one third believe there are no clear prospects regarding the end of the crisis at all, found a recent A.T. Kearney survey. While the crisis has a clear impact on all industries, only 10 percent of the CEOs interviewed see a low effect of the crisis on their own industry compared to the other ones, according to AT Kearney.
Although many respondents represent international players, only 13 percent expect to get relevant support from their international holdings. 90 percent of top managers from Romania believe the state can play a big role in stopping crisis, A.T. Kearney has found.
“Because most companies believe that a solution for stopping the crisis effects lye outside the company, there is the tendency towards next year in a “wait to survive mode ” without taking any significant step changes in respect of market approach and business model. Moreover, compared to other states, we have surprisingly high expectations that the state can and will aid us in overcoming the crisis,” said Michael Weiss, partner and country manager with A.T. Kearney.
“Everybody initiated cost control actions within past year and a half, but instead of structural changes to the business model, most measures were limited to headcount reduction, freezing salaries and new hires and stopping investments”, he goes on.
While these measures fit short term crisis, business leaders see themselves in a vicious circle of low motivated staff, aggressive competitors and a shrinking market size. This happens during a time when most of the big players have finished their multi-year restructuring projects.
While A.T. Kearney's analysis has shown that disposable income in Romania is shrinking and investments are postponed, 74 percent of the CEOs declare growth initiatives through sales push, 77 percent by increasing marketing efforts.