Management: How to Deal with Negative Scenarios?

Understanding the economic environment the company is facing, generating projections in real time and having the opinion of external consultants to the organization, are some of the strategies that could help companies in times of low sales.

Friday, September 20, 2019

In Central America, during the first half of the year, some economies reported declines in their productive activity. The most difficult case is Nicaragua, where economic activity has collapsed 7% in the last year. However, other countries face adverse situations, such as Costa Rica, whose level of economic activity has shown a downward trend over the last year and a half.

When planning for the next fiscal year, managers usually prepare for revenue expansion, and no one wants to anticipate a period of low sales, as may occur in economies that slow down or decline.

Economist Adriana Rodriguez, director of, explains that in a context like Costa Rica "... Managing during a recession or stagnation as experienced in recent months is as important to the firm and as professionally rewarding as managing during periods of growth. Properly done, it lays the groundwork for improved growth in the post-crisis period. An experienced business administrator nearby told me that it is only through recessions and times of crisis that companies reach their next levels of maturity.

The article states that "... companies and, above all, their managers, must know the economic environment well, be up to date with available projections and, in many cases, have the objective opinion of an external advisor or member on their boards or councils, which can bring greater realism to the scenario put forward by management."

The most relevant conclusion is that experiences have shown that crises bring opportunities that can be taken advantage of by those who are better informed, have the capacity to react, and have a strategic plan to deal with them.

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