Organizational resilience in the inflationary slump of the plastics industry

Rising prices of raw materials in the plastics industry and rising cost of production, high inflation, declining consumer purchasing power and, consequently, reduced demand and currency fluctuations have raised the possibility of a stagflation crisis in Iran’s plastics industry and some experts have gone further. And acknowledge that an inflationary recession has formed. Of course, in the event of a stagflation as well as overcoming it, usually measures and strategies at the level of the economy and macro-policies are taken by the central bank and governments, but organizations must also prepare themselves to overcome this crisis.

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In all of the above cases, a common occurrence occurs for organizations, and that is to increase the cost of goods, then reduce productivity and production below nominal capacity, and finally adjust manpower to reduce costs. If we accept that organizations do not play much role in stagflation And usually this unbelievable phenomenon originates from macro-policies, the main question is what the organization itself can do in this situation to be able to get out of this crisis with minimal damage. The answer to this question is one of the topics that has received much attention in recent years and it is the concept of organizational resilience that prepares organizations to overcome internal and external crises of the organization.

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Today, the term resilience in the face of all kinds of human and natural crises has become one of the most important theoretical and practical concepts in management. Compliant organizations are organizations that create themselves due to their high level of readiness, planning and flexibility; They can overcome crises at low cost.

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Inflationary recession is a complex event in which two opposing economic factors, including inflation and recession, appear together. This phenomenon first occurred after the economic boom of the United States in the 1950s and 1960s, when government officials raised inflation to reduce unemployment, and this inflation coincided with rising commodity prices, especially the OPEC oil embargo, which skyrocketed. Raw materials of industries became dependent on oil and consequently increased the cost price of products, and on the other hand, the decrease in market demand reduced the production capacity of industries and also the pressure of labor to increase wages to compensate for inflation is a vicious cycle between rising inflation and Rising wages created this dilemma along with rising oil prices led to the phenomenon of stagflation. This experience in the industry of polymers is already showing itself, even in a world where prices Oil is on the rise, and an increase in this rate may be beyond the reach of the global economy. The situation is similar in the market of polymers and is witnessing an increase in the price of raw materials for the plastics industry in the world. We are, but due to the influential factor of the exchange rate, the acceleration of price growth in Iran in recent months has been much higher than the growth of world prices. This situation is reflected in the growth of the total cost of manufacturing enterprises and proves the increase in cost.

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The concept of resilience has been defined in various ways and several conceptual circles have been formed from it. However, there is widespread agreement that the essence of resilience is a return to the past, the degree to which the system is able to absorb risks and be able to organize itself.

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Strategies of organizational resilience in the face of stagflation

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The occurrence of stagflation in the plastics industry can be limited to factors such as rising raw material prices, declining productivity, rising wages, government policies on imports and exports, as well as exchange rate fluctuations. Creating a resilient supply chain for any organization is normally a strength and a competitive advantage, but having a resilient supply chain is doubly important during a stagflation. The resilient supply chain must be flexible and able to change in critical situations. The resilient supply chain must have high efficiency and the ability to respond quickly to change, and finally the most important factor is the high level of cooperation among supply chain members to exit the crisis. Another factor to consider is increasing productivity to resilient the organization in It is a time of crisis. One of the consequences of stagflation is the decrease in the productivity of organizations, but resilient organizations, using various productivity tools, keep themselves to the maximum so that they can maximize their cost savings by increasing productivity and, consequently, can get out of the crisis with minimal damage. To be.

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