DAVOS, SWITZERLAND--(Marketwire - January 25, 2010) - Many of the business leaders gathering
this week for the annual World Economic Forum in Davos need to build
stronger links with politicians and state officials as governments strive
to reassert power and influence over the corporate world, according to a
study by The Boston Consulting Group.
The authors of a new book, which identifies the strategies companies should
deploy to accelerate out of the "Great Recession," warn that chief
executives "ignore politics at their peril." Chief executives have "little
choice" but to get closer to governments amid a slowdown in the 30-year
trend toward economic deregulation, privatization, and trade liberalization.
David Rhodes and Daniel Stelter, senior partners at The Boston Consulting
Group, argue that a deep understanding of politics will become an essential
feature of a new managerial mindset for the postrecession era. Business
leaders will need to influence government policy even more than they do
today, anticipate (and thereby benefit from) government spending plans
aimed at revitalizing struggling economies, and help shape government views
on regulation. But many businesses have not yet engaged sufficiently with
governments.
In a survey of major companies for their forthcoming book, "Accelerating
Out of the Great Recession: How to Win in a Slow-Growth Economy"
(McGraw-Hill, February 2010), the authors found that business executives
expect the rising tide of government intervention to act as a brake on
growth and the global economy.
Executives at more than 400 companies with revenues greater than $1 billion
were surveyed, with the following findings:
-- 81 percent expect an increase in government regulation
-- 81 percent believe that regulation will be a restraint on growth
-- 75 percent expect an increase in trade and financial protectionism
-- 71 percent expect an increase in labor protectionist measures
-- 64 percent believe that growth will be more difficult
The BCG partners contend that the relationship between businesses and
governments will be critical to agreeing on policy solutions that stimulate
sustainable economic growth.
According to Rhodes, "In the future, a chief executive's decisions will not
just be based on business criteria. They will have to take into account
what government wants -- or, in some cases, demands. Clearly, executives
should focus on what they know best: growing their businesses in difficult
circumstances. But they ignore politics at their peril. Company leaders
need to learn politics well and lobby hard."
"In a world in which long-term fiscal and monetary stimulus policies become
the norm, businesses will have to become even closer to government --
either through lobbying or by anticipating where the government plans to
spend money," added Stelter. "This is not good for the long-term health of
business or the economy. But business has little choice."
To learn more about the survey or the book, or to arrange an interview with
one of the authors, please contact Eric Gregoire at +1 617 850 3783 or
gregoire.eric@bcg.com.
About the Survey
Survey results are based on an online questionnaire of 434 business
managers in seven countries. All respondents represented companies with at
least $1 billion in global revenues in 2008, from all industries except
financial services. The survey was commissioned by The Boston Consulting
Group and administered by Grail Research from August 24 to September 1,
2009.
About the Authors
David Rhodes is a senior partner and managing director at The Boston
Consulting Group and the global leader of the firm's Financial Institutions
practice. Since joining BCG in 1985, he has worked primarily on projects
involving major strategy and organizational change in large financial
institutions, working with clients in Europe, Asia-Pacific, the Middle East,
and the United States.
Daniel Stelter is a senior partner and managing director at The Boston
Consulting Group and the global leader of the firm's Corporate Development
practice. He is also a member of BCG's Executive Committee. During his 19
years with BCG, he has participated in and directed many projects
throughout Europe with a focus on corporate finance (including M&A, IPOs,
due diligence, strategic alliances, and joint ventures) and strategy
(including portfolio strategy and value management).
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm
and the world's leading advisor on business strategy. We partner with
clients in all sectors and regions to identify their highest-value
opportunities, address their most critical challenges, and transform their
businesses. Our customized approach combines deep insight into the dynamics
of companies and markets with close collaboration at all levels of the
client organization. This ensures that our clients achieve sustainable
competitive advantage, build more capable organizations, and secure lasting
results. Founded in 1963, BCG is a private company with 68 offices in 39
countries. For more information, please visit www.bcg.com.
Boston Consulting Group Urges Business Leaders to Rebuild Government Relationships as Part of the Corporate Recovery From the Great Recession
A Study by BCG Shows That Chief Executives Are Not Yet Doing Enough to Nurture Links With the Political Elite, as Protectionism and Other Forms of Government Intervention Emerge to Threaten Business in the Coming Decade
| Source: The Boston Consulting Group