"The governor of the Bank of England, Mervyn King, has warned that the UK is "in a deep recession" in 2009 and said rate cuts may no longer work"The governor of the Bank of England ,MERVYN KING today said the UK is in a deep recession...
Which is a big hurt to UK businesses.....
In my opinion,it is a even worse news compared with interest rate declined to 1%....
From the chart we can see that 2009 is the worst year,because in this year output might touch the lowest point(-6%)...which means this year for UK economy is the most difficult year ever...
So,what will it impact business...
During the recession,some business might merge,because they strong company has more probability to keep alive...but it doesn`t fit for small businesses..some of the small businesses might bankrupt...therefore powerful company may merge small businesses as they want get benefit from it...for instance,they might consider that merge a small business might reduce their raw material or have good business idea and feature produts.
The structure of the organization might be recombined:they might have
-tall structure with a narrow span of control:the advantage of using this structure is subordinates might be more promotional...the productivity might increase
-flat structure with a wide span of control: the advantage are it will reduce overhead costs(total cost)and there will be more delegation and more responsibility it also is good for the company in such awful conditions
Even the unemployment rate is high,but I think it should be a good opportunity to big company,because they can employ some workers with low salary,so it also causes reducing total cost
Government support:In this situation,government may not help any of the small businesses,it`s risky,however the banks might be asked to sell shares to the government,it is a way government support the banks
Shareholders:shareholds might get loss ....
tourism:people may stay at home instead of going abroad....
X/M:import might expensive,export might cheap....
But the forcast said that this situation will recover from 2010....is it ture?....
