by Outcast_Searcher » Sun 31 Jan 2016, 18:30:56
$this->bbcode_second_pass_quote('Rod_Cloutier', 'I') work for a mega-corporation food wholesaler. The company is absolutely panicked that growth has slowed from the 30 year long term average of 15%, to 7-8%. They are buckling down, cutting waste, trimming high wage management positions, and increasing sales targets to get growth back to 15% per year.
I don't personally see it coming. I think times of 15% growth per year are done, and 7-8 % isn't that bad really. Woe to business as usual if growth actually fell to zero or if margins started to contract. The whole economy of scale business model would crash and burn.
The steady state economy that so many people speak about achieving is a myth; we either grow or collapse.
First, growth at a high rate can't continue forever. Once entities get large, growth tends to slow down. China's economy is a classic example. (The term mega-corporation seems to indicate a big entity).
Second, you're right that the desire to continue growing at a 15% rate may be ill conceived and (as I just mentioned) may not be realistic. However, I give management props for trying to do something before, say, large losses develop. Corporate management often does little until such a trend becomes a disaster.
Given most corporate goals (and thus rewards to management) are focused on growth targets -- naturally the focus will tend to be on such growth instead of something perhaps more realistic and productive -- but potentially bearing much larger risks, like CHANGING the product mix, moving into a different area, etc.
One can't blame management for wanting to avoid doing the unconventional when they'll likely be fired if they fail AND unconventional has a serious risk of failure.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.