food for thought to company leaders

In this crisis-situation, most industries and companies are fighting for their employees and survival. The future and results will be determined by our current decisions. In case of crisis a company has to manage many problems and even if there is a Business Continuity Plan, there may be other challenges. Here are some areas which certainly need to be taken into consideration.

Managing cashflow challenges
In case of liquidity problems, the mother company or bank loans may help, but it can also be considered to assure revenue by giving clients a discount. Potentially change of company profile can ensure revenue stream.
Ensuring production continuity
The extent to which a company can manage the continuity of its production capabilities will determine the faith of the company. In case multiple products are produced, the situation may be managed by reducing the variety of products. In case production in a certain country becomes impossible, it should be known if it can be redistributed elsewhere and if yes, how fast. Maybe it can be (temporarily) outsourced. Does all the documentation and specification of the product(s) exist, in a common language, to ensure that transferring or outsourcing of the production can be done as fast as possible? Companies which have proper, easily understandable documentation and flow charts, control points, may have an advantage.
In this time of pandemic, a company may also elect to continue production, but for example in such a way that fertilization is happening every 4 hours, the doors are being kept open, in order to reduce contacts and possibly it can rearrange settings so that the 1-2 meters distancing recommendation can be adhered to. And many other measures, if the work environment and infrastructure allow for it.

Change of profile
The possibility of a profile change depends on whether the resources can be reassigned or restructured, in order to adopt to the current market situation. Thorough consultation with our main experts including marketing advisors, should be considered.

Supply chain:
In case the primary suppliers can no longer supply, secondary supply channels need to be found. Companies still functioning in pandemic free areas, innovative corporations and technologies, like start-ups, 3D printing, etc., may offer a solution. Those companies who have record of supplier assessment and continuously explored alternatives, may have an advantage. In case office-based work needs to be changed to home based work in a time of crisis, management can explore which services are no longer essential (e.g. cleaning, security, etc.) and take temporary rationalisation measures.
In case supplier contracts are temporarily suspended, the contractual clauses must be adhered to, possibly temporary amendments can be made to the contracts. It is not necessarily the best choice to terminate contracts in order to, once the situation is over, quickly continue the partnership with the supplier.
Management of stock:
It may become necessary to find alternative use for stock, for example when it may be nearing its expiry date. Potentially it can be used within the framework of CSR, but maybe alternative demand markets can be found.

Employment rules, office maintenance:
In case of temporary/permanent home office employment, modifications to the employment contracts may be required. The employer must be clear with the legally maximum allowed number of days, during which home office can be requested, without the modification of the employment contract. Potentially the employer also has the liability to check and warrant, that the home office environment meets health and safety requirements. It should also be considered, that productivity may be different in a home office environment. Management must think forward and consider that eventually the economy will bounce back, so whether the best strategy is to lay off people or rather send them on unpaid leave. The latter possibly would result in employee retainment and reduce future recruitment effort and costs.
But in some companies lay-offs may be inevitable. The actual legal regulations must be considered. It may be a lengthy period requiring consultation, for example with the workers’ council.


Zentai Zsuzsanna,

FrameWork Hungary Kft. 


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