According to the Grant Thornton International Business Report (IBR) 2010, more than half of leaders of privately held businesses globally, 56% to be precise, feel that their stress levels have increased over the last year.
The operations in fast growing economies come with the pressure of sustaining the scorching pace of growth; more so, in privately held companies, where the performance at every count is related with the fluctuations in the stock prices of the company in the financial markets. Better the performance of the company, better the valuations and higher the market capital for the private companies.
The research from the IBR 2010 covers the opinion of over 7,400 business owners across 36 economies, where Mainland China tops the table for the most number of stressed leaders with 76% feeling the heat.
The high stress levels across privately held businesses in Mainland China is followed by Mexico (74%), Turkey (72%) and Vietnam (72%), which feature in the list of economies with high stress levels in initial 70s by percentage terms.
According to the report, the high stress levels are particularly linked GDP growth and high expectation levels in fast emerging economies like China and Mexico among others.
However, the consensus report varies on the stress levels being experienced in India. The survey indicates that India related figures for the leaders of privately held companies’ stands at 56%, a figure lower by 23% from 2007 levels.
Do you agree that Indians could be feeling lesser stress than others?
The report also states that the stress levels have also increased in Greece (68%), Spain (65%) and Ireland (62%). Most of these economies have witnessed a severe slowdown on account of global recession during the last year. In fact, Greece’s national debt is bigger than the country’s economy which has led to downgrading of Greece’s credit rating at the lowest in the Euro zone.
Alex MacBeath, global leader – markets at Grant Thornton International,
"We have businesses at both ends of the GDP growth scale experiencing high stress for very different reasons. In mainland China the pressure is on to keep up with tace of expansion while in Ireland, for example, the economy is retracting and business owners are worried about how they will keep their business alive."
It is the stress to keep doing better in terms of performance in fast growing economies, while in economies still in trouble; the concerns revolve around curbing high costs that depresses the profit-making ability of the company.
Austerity measures are introduced to cut costs and reducing the losses by withdrawal of ‘so-called’ unreasonable amenities provided on the company’s behalf. The reduction in the number of holidays for the employees is often, the main cause of increasing amount of stress in the privately-held companies.
Do you agree that environment in private companies could be as stressful?