Business cycle management and companies’ performance: current knowledge and the way forward

Abstract

Purpose: the purpose of the literature review is to analyse and critically assess current research in academia starting with the business cycle phenomenon and gradually narrowing down the analysis to the current research performed on business cycle management in order to summarize research gaps, highlight research possibilities and put forward recommendations for further research in terms of business cycle management and companies’ performance indicators.

Approach: in order to reach the aim, the following method is utilized: systematic review of the literature and descriptive statistics via analysis of 47 journal articles, 11 books, 14 scientific conference proceedings and reports on business cycle management and the business cycle as such.

Findings: due to the recent global economic crisis, the researchers have paid particular attention to the business cycle mechanism and how this phenomenon is explained (Dobrescue, Badea and Paicu, 2012; Li, Rong and Wang, 2014; Gali, 2015; Anzoategui, 2015). The business cycle has an enormous impact on companies’ sales, profits, cash flow and other financial indicators; however, in the management literature there is a lack of studies that focus on companies’ performance and behaviour during the business cycle and look at the issue empirically (Navarro, Bromiley and Sottile, 2010; Lorange and Datson, 2014; Navarro, Sottile and Bromiley, 2008; Conti, Goldszmidt and Asconcelos, 2015). On the basis of the literature review, the authors conclude that there is a lack of holistic research in academia regarding business cycle management from a managerial point of view, a lack of crossdisciplinary, cross-country and cross-industry studies on this matter in the recent business cycle (Navarro et al., 2010; Conti et al., 2015; Kaya and Banerjee, 2012). As can be seen from the literature review, in academia several studies have been carried out on specific business cycle phases and specific factors of business cycle management, not looking at the phenomenon holistically and with concluding factors that are more or less significant.

Research implications: the literature review demonstrates that in academia business cycle management is a topic that has several limitations, such as sample size, the fact that no countrywide comparisons are taken into account, nor how economic dynamics influence business cycle management in different industries and countries, and the fact that no heterogeneous business cycle management model has been developed; in general, research on business cycle management and companies’ performance is arguably the least developed research stream in all of management scholarship (Navarro et al., 2010; Conti et al., 2015; Abbasoglu, Genc and Mimir, 2015).

Originality: the article summarizes and classifies measurements of companies’ performance that are used in business cycle management literature and summarizes the main business cycle associations, providing a holistic view of business cycle management factors. In addition, the article concludes that there is a lack of research that encompasses a common set of companies’ performance indicators and provides a heterogeneous model of business cycle management that encapsulates industry-sensitive factors and the factors’ significance.

Paper category: Literature review