Table of Contents

CONTENTS

Preface VII

Introduction 1

1 THE WORLD HAS ENTERED A NEW ECONOMIC STAGE:

FROM NORMALITY TO TURBULENCE 5

What Is Market Turbulence? 12

Factors that Can Cause Chaos 18

Conclusion 41

2 MANAGEMENT’S WRONG RESPONSES TO TURBULENCE

NOW BECOME DANGEROUS 45

Resource Allocation Decisions that

Undermine Core Strategy and Culture 51

Across-the-Board Spending Cuts versus

Focused and Measured Actions 53

Quick Fixes to Preserve Cash Flow,

Putting Key Stakeholders at Risk 56

Reducing Marketing, Brand, and

New Product Development Expenses 57

Declining Sales and Price Discounting 60

Decoupling from Customers by

Reducing Sales-Related Expenses 62

Cutting Back on Training and Development

Expenses in Economic Crises 63

Undervaluing Suppliers and Distributors 64

Conclusion 69

3 THE CHAOTICS MODEL: MANAGING VULNERABILITY AND OPPORTUNITY 71

Constructing an Early-Warning System (EWS) 81

Construction of Key Scenarios 89

Scenario and Strategy Selection 98

Conclusion 102

4 DESIGNING MANAGEMENT SYSTEMS FOR RESILIENCE 103

The Chaotics Management System108

Finance and Information Technology 112

Manufacturing/Operations 122

Purchasing/Procurement 129

Human Resources 134

Conclusion 138

5 DESIGNING MARKETING SYSTEMS FOR RESILIENCE 141

Common Marketing Reactions to Crises 145

Strategic Marketing Responses to Crises 150

Operational Issues Facing the Marketing Department 157

Operational Issues Facing the Sales Department 162

Conclusion 166

6 THRIVING IN THE AGE OF TURBULENCE:

ACHIEVING BUSINESS ENTERPRISE SUSTAINABILITY 169

Business Enterprise Sustainability 172

Conclusion 190

Notes 193

Index 205