Impact of Recession on Organization

 •	Impact of Recession on Organization
Abstract
Background:
In the environment of recession, it is very important for hotels to determine effective strategies to minimize the impact recession and budget cut. There are different types of strategies such as strict rules and regulation, aggressive management of cost etc that can be used by the hotels to minimize the impact of recession. Holiday Inn Brentwood is UK based hotel chain facing the problem of recession. It has successfully gone through medium and long-term reforms to minimize the impact of recession over its operation.
Purpose:
The main purpose of this research is to analyze various actions taken by the organizations to minimize the impact of recession. The report is aimed at determining the steps taken by Holiday Inn Brentwood to minimize the impact of recession over it.
Methodology:
The research problem is exploratory in nature, so quantitative research type is used to collect data from primary and secondary sources of data collection. The questionnaire survey method is used over the 100 customers, from which only 80 participants responded. For secondary research literature is selected that helped to obtain quality information.
Findings:
From the research, it is found that there are so many steps that organizations can take to minimize the impact of recession over it. It is very important for the organizations to implement these steps to determine their sustainability and profitability during recession. There are different steps such as aggressive management of cash, transforming capital asset into financial asset and identification of key influencer that can be used to determine the effectiveness of organizations during recession also.
Further implication:
The research is quite effective for hotel industry to determine the effectiveness of these steps to minimize the impact of recession determining the sustainability and profitability of research.
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Recession & Its Impact
Introduction
Recession is the most severe condition the business world is facing today. Recession may be defined as the slowdown in the economic activities of a nation. Recession is a part of normal business cycle that tends to have a period about six months to 2 years. It is a situation under which the confidence of the consumer is being lost regarding the growth of economy and his spending power goes on decreasing. (Nagle,2009). Under recession the demand for the goods and services goes on decreasing that ultimately leads to the decline in production rising to unemployment in the economy. The impact that recession has over the economic world has made it a critical situation for different economies. 
According to the Nation Bureau of Economic Research, recession can be termed as the significant amount of decline in the economic activities throughout the economy having significant impact on the real income, employment and production of goods and services within an economy. (LaBonte, 2010). There are several factors that have effectively contributed in the situation of recession within an economy. Many of the authors have regarded inflation as the most severe cause for inflation within an economy. It is the increase in the prices of goods and services ultimately leading to a situation of recession. Today most of the nations are facing with this problem of inflation.
Increasing interest rates in the country is also regarded as one of the most important factor responsible for the situation of recession in an economy. With the increasing interest rate, the purchasing power and borrowing of people has decreased. (Rhodes & Stelter, 2010). This continuous decline in the purchasing power of people leads to slow down the economy gradually. In addition to this, decreasing value of money is also regarded as the important reason behind the recession in an economy. When the value of money decreases, there is a slowdown in the economic activity of the country and ultimately a situation arises where there is complete negative growth. (Farago, 2002). Today maximum of the country has experienced this decline in their value of currency that leads to a situation of recession.
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Recession has also given birth to different kinds of situation such as the budget cuts by the organization. Today maximum of the organizations are engaged in the practice of budget to effective face the situation of recession. It is a practice followed by the organization to make a decline in their overall budget to meet their business goals without affecting. Today most of the organizations are using budget cut as a tool to tackle the impact of recession effectively. It has become a need for organizations to introduce budget to tackle recession effectively. (Richardson, 2011).
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