The Value of Communication - Preventing Corporate Crisis Through Effective Communication

Insolvency is a common phenomenon in the German "Mittelstand". Since small and medium sized companies account for nearly 95% of all businesses in Germany, the impact on the economy is massive. Besides the macroeconomic effects, insolvency entails serious consequences on the individual level. How can impending crisis and thus insolvency be prevented? In his book, Bernhard Ollefs picks up this important question and identifies effective comunication between management and the workforce as a strategic instrument to prevent crisis and insolvency. By means of effective communication, managers should "immunize" the company to enforce a long-term crisis prevention. After a brief introduction, Bernhard Ollefs describes the phenomenon of crisis in the German "Mittelstand" and how communication can contribute to prevent insolvency. He analyizes exigencies for implementing effective communication as a strategic instrument and describes factors that could jeopardize this process. He then provides solution proposals that can be implemented in order to profoundly improve communication between management and workforce. In the last part of his book, the author investigates the communicative environment of three insolvent companies and compares it with the communicative environment of three successfully operating companies. Based on the comparison, the author draws a final conclusion.