Survival Big Concern for Major ME Firms

A comprehensive survey of senior executives at nearly 900 major companies worldwide by Ernst & Young reveals a very different business environment compared with 2009 and it is a corporate world that for the most part is still nervous about recovery.

Ernst & Young's Lessons from Change - Findings from the Market revealed that, more than half of the companies agreed that surviving 2010 would still remain a challenge as compared with nearly three quarters who said they were focused on securing the survival of their present business 12 months ago.

However, the percentage looking to pursue new opportunities in 2009 has also risen to 34% from 19% in January 2010.

Companies focused on improving the performance of their current assets were down from 39% to 27%, and the proportion still restructuring their business also declined from 37% to 27% over the year.

"The region has, in varying degrees, bucked the more extreme after effects of the downturn," said Ernst & Young Middle East senior partner Tariq Sadiq.

"Organizations may be less worried about survival over the next 12 months, but the return to a healthy operating environment is still some way off. The overwhelming view is that most companies are still focused on securing the present, which means that companies are still at the early stages of responding to the current environment.

"It is clear that many companies are seeking to learn the lessons of the changed market. These successful companies are essentially equipping themselves for the new economy and navigating a new future," he added.

"This actually represents a very entrepreneurial outlook - a trait that many of the biggest firms in the region already advocate.

"Regional corporations also understand that the shape and form of their operations in 2010 will depend on the recovery patterns of individual countries which are determined by the way individual economies have responded to the downturn.

"Economies that were healthier before the downturn will emerge with their status enhanced while the weaker economies will take longer to get back to a steady growth path." - Gulf Daily