Business practices to be changed by downturn

Date: 24th November 2009

The current recession will have profound effects on future business trends, the Confederation of British Industry (CBI) has said.

According to the business group, firms will become more "wary" of taking on too much debt in future and will look to take "alternative" financial options other than borrowing from the bank.

This could lead to businesses which use money from sales of goods and services to fund growth becoming more prevalent.

Moreover, CBI suggested that many firms will "reorganise" their relationships with partners and implement stronger ethical policies.

For employees, greater flexibility in working patterns was predicted for the next decade - with the size of core workforces decreasing and the size of a "flexiforce" of independent sole traders and others growing.

Richard Lambert, CBI director-general, said: "We may be at the start of a new era for businesses, in which attitudes to finance and to corporate leadership are changed for a generation by the shock of the past two years.

"What we now need is a more balanced, less risky pathway to growth - one in which the short-term returns may be lower, but the long-term rewards for management success will be a lot more sustainable and secure."

Posted by Claire Ford