Global recession creates opportunities, says new study.

• Author: Heffes, Ellen M.
• Position: STRATEGY

The impact of the economic downturn has clearly been significant, though not all companies were affected equally by the recession. This is one finding of a study of executives at 570 leading global companies conducted by Ernst & Young LLP.

When the survey was released in late June, E&Y noted that while the heat of the crisis had passed, the majority of companies were still focused on survival, with a significant minority looking to take advantage of the situation to pursue new opportunities.

The survey, Opportunities in Adversity: Accelerating the Change, found that more than half of the respondents 43 percent) said their operating model had been permanently altered by the events of the past 18 months; 45 percent said there had been a temporary impact. Similarly, 56 percent of the executives said their risk-management processes had been permanently altered; for 33 percent, it was temporary. For 45 percent, the regulatory framework for business had also fundamentally changed.

"Company management is being forced to review their methods of organization due to a range of macro influences such as challenges from diversification, globalization and (de)regulation," said Michael Rogers, a principal in E&Y's Transaction Advisory Services practice.

"Businesses that emerge strengthened from the current crisis will be those that reshape intelligently, not those tempted to move quickly to extract additional value," he added.

The survey followed an earlier one conducted in January and changes were noted. The overall mood was still somber, although 64 percent of the executives said they had been able to make cost reductions, 31 percent said they had improved revenues and more than a third said the environment was more positive in terms of making strategic acquisitions.

A majority had seen deterioration in revenues (58 percent) and profitability (56 percent). Only 20 percent had seen an...