Recession and its impact on society

Abstract— business lifecycle when an economy that grows over a

These days, looking out the window is not pleasant. period of time tends to slow down. An economy typically
There is such a heavy storm and thunder outside. grows for 6 to 10 years and later is likely to go into a
Bailouts, bankruptcies, equity market volatility, job cuts, recession for about 6 months to 2 years. Thus, economic
cash flow pressure.... the speed of recent movements recession is a declining phase of the business life cycle
in the world economy has ebbed the confidence of when their decline in economic activities spread across
everyone. The world economy is in turmoil and its the economy. There appears to be little study on the
impact is being witnessed by all countries around globe adverse impact of recession on higher studies,
with varying degree. In India, the situation is not so particularly in India. This can be known through the kind
much awful till now. India has taken an array of of response for admission to professional course like
monetary and fiscal measures, in quick succession, to MBA. It was been told that unlike previous year when
contain inflationary pressures and, more importantly, to almost all the seats were filled in the first week itself, not
make available adequate domestic resources to even half had been filled this year. One of the reasons for
maintain growth in the face of an unprecedented poor response to MBA course, which was in high demand
international financial crisis and global economy as it promised a bright future till recession set in, is
drifting into recession. But still, all is not well in Indian apprehension among the parents and their children
industry. The impact of global economic crisis has now arising out of uncertainty prevailing over the job market.
slowly started impacting the Indian Educational
Institutions as well, especially those which are either After all, hardly anybody pursues professional course for
internationally exposed. Hunger makes man creative the sake of gaining academic satisfaction or adding
and this creativity when well channelized leads to additional degree, but to get a better placement and
productivity. We can make and we can consume and to handsome salary so that he or she could not only recover
link the two we must invest - our minds, efforts and the cost of education, but also lead a secured and
scarce resources.. prosperous life. The present job market is not more
promising for the future of graduates and postgraduates
Keywords-unemployment, Fiscal policy, inflation,
in professional disciplines, at least for the time being.
Debt ,GDP, Recovery Strategies
Thus, the parents are not prepared to take the risk of
investing a large sum, which would be not less than Rs.
I. INTRODUCTION 2.50 lakh for the two-year MBA course and immediately
after completing the course a job offering a monthly
Most of the countries all over the world are going through salary of just Rs. 5,000 to MBA students of final semester
this phase of economic recession. Many old and big will be offered.
companies have already been brought down on their
knees to bite the dust. Many companies as well as The situation would change once the economy got back
countries have become bankrupt or are on the verge of it. on the path of progress. The economy may be sputtering,
Millions and millions of people have lost their jobs. Many but entrepreneurs can still succeed with the right
people have lost millions and billions of dollars. People in business model and cost controls. In total the recession
general are scared and fearsome. This is not the first time have turned down the growth process and have set the
that the global economy is going through recession and minds of economists and others for finding out the real
this is also not the last time. There is a pattern involved in solution to sustain the economic growth and stability of
it. On an average it is happening after every 8-10 years. the market which is desired for the smooth running of the
Business is slowing and there is lot of news about an economy. Solution for the problem still remain at the top
economic recession. Economic recession is defined as a of the mind of every one, still everyone facing the impact
decline in the country’s gross domestic product growth of recession but how long is the major question which is
for about two or more consecutive quarters in a particular of great importance.
year .GDP is the total value of goods and services
produced in a country during a period of time (usually a
year). Gross because no account is taken of depreciation .
of the country's capital stock. As a part of a normal
CHARACTERISTICS OF RECESSION this will come out as a stronger entity or person or
country. Education institutions are no exception to this
 Freezing the recruitment. No new hiring. rule. They are also trying hard to survive. With them they
 Fresh graduates or those who are new to the market are also trying to float and swim through as many people
will find it difficult to get a job. More so, if they are not as possible but certainly not all. As a part of cost cutting,
from A-grade institutes. some of the employees need to be laid off so that the
 Last in, First Out. Among the employees who are company and others can survive. Similar things happens
already inside the company and are employed, the in a lift, when it is overloaded; ship, when it is sinking and
person who has joined recently will be the first one to even airplane, when it is overloaded and etc. Something
go out. To be more precise, all those who are on their or someone needs to go out for the rest of them to
probation will be shown the door. survive.
 Average performers or difficult employee will also be
shown the door. Performance records of last three
years will be re-examined and reanalyzed and those
with average or below average performance will be
shown the door.
 Outsourcing to increase. Most of the routine
functions will be outsourced and those departments
will be closed.
 Training and Development programs to freeze. No
more expenditures on company sponsored training
and development programs.
 Perks, benefits and retention allowances to be
withdrawn. The company will freeze all perks and
EDUCATIONAL BUSINESS STRATEGIES IN
benefits that has been extended to its senior
RECESSION
employees.
 Bonuses and incentives to be stopped. For the time
Did you know that there are some people and
being the companies will stop all the bonuses and
businesses that don’t experience a recession with the
incentives that are due to its employees.
masses? Do you know how they accomplish that?
Mostly through planning and implementing solid and
IMPACT OF GLOBAL RECESSION ON INDIA’S
proven business building strategies.  Here are several
HIGHER EDUCATION
helpful areas to consider for your business. The
In our life, there is a special place for money. Most of the following are some ideas to explore your Educational
problems that we are facing in our life and day-to-day business during this hard time:
living are linked with it. Food, shelter, clothes, life-style,
comforts and education involves money. Money should 1. Concentrate on the 20 That Produce the 80
be revolving; it comes, it goes and it comes back again. It
should always change hands or else it is useless. It is this Remember the Pareto principle. Twenty percent of your
nature of the money that drives the economy of a customers bring in 80 percent of your revenue. This
country, a company or our life. And when you are going number varies, it could be 20 percent that brings in 95
through recession, it means no money is coming in. percent, but you get the point. In a downturn, students and
Money is not coming in but yet one need to live and parents are more likely to go with a more trusted source.
hence there is a need for cost-cutting. But we never know If the Educational Institutions constantly build relationship
how long the recession will continue and hence more with their existing students and parents i.e. customers,
cost cutting. People drive the economy and when there is then they are adding more power to one’s Educational
recession then it is these very people who suffer. Institution. Stay in touch with them and let them know
In such times of global recession when everyone is trying that management peoples of the Educational Institutions
hard to survive and pass through one of the toughest are interested in working with them.
phase of their life, no one thinks about making the profit
out of adversity. Anyone who will be able to pass through
2. Spend Smarter and Diversify- Don’t Stop Educational parents or students and one will not be able to implement
Marketing the strategies that will make and keep it profitable.

By all means, don’t cut on marketing and advertising of 8. Diversify

Educational Institutions, but it is fine to reduce budgets if
appropriate. Creative marketers could use some of the Find new revenue streams by offering additional courses
low cost to free methods to keep their educational and services related to your primary line of business.  One
business out there. If existing marketing efforts work fine, great way to do this is through affiliation business which
keep doing them but if cost is the problem consider them allows you to refer people to businesses directly from
at smaller scales. Complement with other educational your website and earn a commission for closed sales. 
marketing strategies.
9. Bring “A” Game

3. Repackage for students and parents as customers

Give 100% to your Educational business and your
with Limited Budgets
customers and they will not only give you repeat business
but will trust you with referral to their friends and family.
Related to the second point above, students and parents
i.e. customers or clients are also looking for ways to cut
10. Become Efficient
cost. When Educational business is good and one is busy,
then one may have overlooked some of the smaller If one’ Educational Institution is not using technology
customers who can’t afford what one has to offer at the efficiently, start to. This will develop a gradation in
price point. Consider repackage of courses, fees and teaching and there are so many daily tasks that can be
services so they become more affordable to another automated, and can save you lots of time and energy.
market segment. When business is slow, then one has to
search for alternatives that put extra revenue in one’s 11. Focus
pocket.
This has always been a struggle for everyone and I know
4. Provide Value and Measurable Results that many Educational entrepreneurs also struggle. Get
some accountability if one need to, but just do whatever it
Besides repackaging courses, fees and services to make takes to stay focused. Don’t start new projects until your
them available to small budget customers, one may still current projects are completed.
have to emphasize on value and provide measurable
results. Remember that people are looking to save money
and unnecessary spending. They may be more likely to
request a refund if one’s course or service doesn’t provide 12. Be Prepared
the kind of results they want.
Have a plan and work on the plan. Be proactive, not
reactive to changes in EDUCATIONAL INDUSTRY and in
5. Seek Additional Revenue Sources
the societal place.  Most of all, don’t expect what has
It may be the right time to team up with business partners worked in the past to always work in the future.  Many
to cross promotes each other. It may be in the form of make this mistake several times and it becomes very
direct promotion. This is a type of a strategy where one costly.
can enhance the image of the other Educational
13. Cut Costs
Institutions as well as of their own and the same can be
received in reciprocal. This is one of the fantastic and
The good technique for planning is to foresee the things
new forms of strategy.
and then construct the objectives. According to our
objective, know all ones actions required to provide better
6. Stay Healthy
courses and teaching to the students. Then eliminate all
If one’s Educational Institution get run down and stressed the undesired actions and automatically there will be
out, then it won’t be any good to the Educational business, cutting of costs. If one doesn’t has a budget for business,
stop now all the un-necessary actions and know
appropriate actions. If the Educational business is small
and if one co-mingles personal and business expenses,
then it not the best practice, but one is probably paying
too much.

14. Stay in front of Customers

One should communicate consistently with their clients. If

not, then they are very likely doing business with other
Educational Institutions i.e. competitors educational
institutions. Doing this by post is costly, so I recommend
using email marketing. E-mail marketing is one of the
economical device and most like device to be in touch
with customers. This net has become the daily habit of
the people in the society to use it for their own knowledge
and experience. If they do not use it they feel that they are
missing something from their daily routine.

15. Teach employees of Colleges or Universities the

value of a customer

The customer i.e. the students is the future of the

Educational business. The customer helps pay their
paycheck.  The customer is not an interruption. The
customer in front of you takes priority over the anything
else.  To stay recession proof, you have to have a team
that understands the value of the customer not just
coming back, but bringing others back with them

RESEARCH METHODOLOGY

Sample Size: 100, Sampling Technique: Random

Sampling, Population: Finite, Data Collection Instrument:
Questionnaire, Demographic: Students and Teachers of
Private Management Colleges or Universities, Geographic SUGGESTIONS
Location: Luck now, U.P. INDIA.
Management Colleges or Universities should provide
Healthy packages to the Management Faculties as well
as Management Staffs.

Management Colleges or Universities should provide

better platform and better Working Environment for
development or growth of the teachers and staffs.

Management students should move towards the

Entrepreneurs category than to the job of managers and
government should help them in sanctioning loans,
providing licenses and other formalities of paper work.
They should be given special preference for doing
businesses or manufacturing because they are highly
qualified.

I like to request the Management Teachers that they

should not deteriorate the quality of teaching in
 recession because the teaching profession is very noble
and the TEACHERS are given the place next to GOD. We
are the source of Career formation of the students and
not the Career distinguisher. The situation would change
once the economy got back on the path of progress.
Reports in the media indicate the signs of recovery from
over two-year economic slowdown
CONCLUSION
In such times of global recession when everyone is trying
hard to survive and pass through one of the toughest
phase of their life, no one thinks about making the profit
out of adversity. Everyone is trying to survive and it will be
survival of the fittest. Anyone who will be able to pass
through this will come out as a stronger entity or person
or country
We are in a situation where no one can actually help and
there is no point in blaming the God or the circumstances
for our situation. One cannot also blame the Government
of our country or the Educational Institutions who are
working in this situation. It is just a tough time and the
fittest will survive, others will get washed away with the
time.
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