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, reduced 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. 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. 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 because of their high level of preparedness, planning and flexibility; They can overcome crises at low cost. 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 caused a dramatic increase in prices. Raw materials of industries became dependent on oil and consequently increased the cost 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. Rising wages created this dilemma along with rising oil prices led to the phenomenon of stagflation. This experience in the polymer industry is already being demonstrated, even at a time when oil prices are on the rise in the world, and perhaps an increase in this rate is beyond the tolerance of the global economy. The situation is the same in the polymer market and we are witnessing an increase in the price of raw materials in the plastics industry in the world, but due to the influential exchange rate factor, the acceleration of prices in Iran in recent months has been much higher than global prices. This situation is reflected in the growth of the total cost of manufacturing enterprises and proves the increase in cost. 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. Organizational resilience solutions in the face of stagflation 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 is normally a strength and a competitive advantage for any organization under normal circumstances, but having a resilient supply chain is doubly important during a recession. The resilient supply chain must be flexible and able to change in critical situations. The supply chain must be highly efficient and able 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 make the organization more flexible. 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. Another factor that can be found in the concepts of resilience is the creation of a financial management system in plastic manufacturing companies that can be managed by proper management of financial resources and attracting cheap financial resources, as well as creating a stable cash flow in the organization and regular monitoring of financial indicators and ratios. And provide the necessary infrastructure for the organization to overcome the leading crisis. The last factor that we address is the resourceful human resources working in the organization who can find the ideal solutions to the problems of the organization with the right understanding of the conditions of the organization and the external environment and the training they have received and their past experiences with high creativity and in the fastest possible time. If these solutions are implemented in the issues of reducing costs and increasing organizational efficiency and effectiveness, it will have the greatest effect on the organization’s path through crises.

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