Published by:
MIT Sloan School of Management
Length: 3 pages
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Abstract
Venture capital has dried up. Business pages report on getting back to basics. It has even become fashionable to snicker about the foolish mass hallucination of the New Economy. Anyone with a new idea in a corporation is being told ''cost cutting is our focus right now.'' Corporate management has battened down the hatches. Meanwhile, a few contrarian voices say that it''s a great time to start companies because talent is available, entrepreneurs'' valuation expectations have plummeted, and office space is cheap. And for existing companies, they say, it is not time to downsize but time to use freed-up talent to innovate in preparation for the next economic cycle. So which is the right corporate survival strategy - contraction or exploration?
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Abstract
Venture capital has dried up. Business pages report on getting back to basics. It has even become fashionable to snicker about the foolish mass hallucination of the New Economy. Anyone with a new idea in a corporation is being told ''cost cutting is our focus right now.'' Corporate management has battened down the hatches. Meanwhile, a few contrarian voices say that it''s a great time to start companies because talent is available, entrepreneurs'' valuation expectations have plummeted, and office space is cheap. And for existing companies, they say, it is not time to downsize but time to use freed-up talent to innovate in preparation for the next economic cycle. So which is the right corporate survival strategy - contraction or exploration?