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A swift response. Years of weighing in on divisive social issues have prepared many corporate leaders to respond quickly and decisively as problems arise. Now, after dealing with the COVID-19 crisis, companies are tackling another global crisis head-on. When the war in Ukraine broke out, hundreds of companies acted fast to protect the lives of their workers and their businesses’ reputations. More than 400 firms with a footprint in Russia have halted or cut back their operations there. [WSJ] |
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Fading optimism. As the conflict continues in Ukraine, hope is fading for a quick end to the war, the effects of which are being felt worldwide. In Japan, business confidence has fallen for the first time in almost two years, according to the Bank of Japan’s quarterly survey. Business sentiment for the country’s top manufacturers slipped three points between December and March. Meanwhile, a surge of COVID-19 cases in China is intensifying concerns over a potential economic slowdown across Asia. [WaPo] |
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War and uncertainty. The largest war in Europe in nearly 80 years is a severe humanitarian crisis in a world already grappling with the uncertainty of a protracted pandemic. In addition to the tragedy of lives lost and disrupted in Ukraine, “the energy and food crises are pinching at the livelihoods of people across the world,” says Sven Smit, McKinsey senior partner and chair of the McKinsey Global Institute, in the latest episode of The McKinsey Podcast. Many companies are setting up crisis teams (as they did during the COVID-19 crisis) to understand how the war in Ukraine affects their people and operations.
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Months vs years of economic pain. If hostilities are resolved diplomatically in the coming weeks, assuming a modest policy response, we’d be unlikely to experience a stoppage in the supply of energy and some critical materials, says Smit. “In that case, maybe the first or second quarter of this year might look wobbly, and then we might emerge back to some form of normal trajectory.” However, if hostilities are prolonged, with economic sanctions lasting longer and at higher levels, “we could easily be two, three years under,” suggests Smit. |
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| — Edited by Belinda Yu |
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