Retrenchment among small manufacturing firms during recession

摘要

Empirical evidence suggests that retrenchment enhances a firm's recovery from declining performance. Identifying exactly when and how to retrench is the next step in applying retrenchment re- search to managerial practice. Our re- search to repots in-depth analysis of re- trenchment during the past recession and offers guidance to small firms facing the next recession. First, retrenchment is identified as a common but not universal response to recession for small firms: over two-thirds of the firms sampled re- trenched during the 1990-1991 reces- sion. Second, a theoretical explanation of the priorities placed on the retrenchment of certain factors of production is ad- vanced.