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Corporate Retrenchment or Corporate Renewal?


There are two major ways for managing officers to respond to downturn: one is to retrench, cut costs, pull back; the other is to renew, revitalize, grow stronger.

Strangely both responses look the same on the bottom line, at least at first: they both reduce costs. But there is a profound difference in the long-term profitability and competitiveness of companies that renew, regenerate rather than just retrench.

Retrenchment, even when it is done superbly, can produce a weaker, frightened organization that has lost muscle, market, bone, and spirit. Business literature and oral histories are full of ugly examples.

Renewal, though, that's different?

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The above is an abstract of a chapter in Fire in the Corporate Belly.
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