Business faculty research focuses on forest products industry

March 8, 2013

Many businesses have sought ways to achieve competitive advantages during the "great recession." New research by one of Northland College's business faculty members suggests specific actions that can help companies combat a number of challenges. Though geared specifically toward forest products industries, this research is relevant to other sectors as well. The Forest Products Journal (FPJ) recently published research by lead author and Northland College faculty member Rajat Panwar that explores how forest products companies can prepare for and predict economic downturns.

"Companies should not exclusively rely upon outside economists," said Panwar. "The recession does not hit every company at the same time so companies should have an in-house capability that could tell them when an economic recession is coming and when is the threshold for when it will start affecting them."

Panwar is the Chapple Chair of Business and Social Responsibility at Northland College. His article published in the FPJ, "Gaining Competitive Advantage in the New Normal," presents research that may have implications for the forest products industry in northwestern Wisconsin. According to the article, forest products markets experienced the worst downturn in recent years since the first oil crisis in the 1970s. Panwar's research focuses on the business cycles and offers insight into what companies should be doing when a recession hits.

"When faced with a recession, companies can take two types of actions: defensive and offensive actions. The best results belonged to companies that focused on operational efficiency while continuing to invest in buying assets and market development. Other alternatives did not provide comparable results. In fact, companies that laid off employees faced the worst results." Panwar said, "When the recession was over, production was way worse."

Panwar's analysis is based on a number of studies that used data collected during the last three recessions. His findings suggest that companies will gain more from an adaptive leadership style to help their employees adjust during a recession. His research explores whether businesses may benefit from "share the pain" programs that ask employees to work fewer hours to save jobs during an economic downturn.

"This is not just a philanthropic act. This is a fundamental change in the culture of how we view ourselves within an organization," said Panwar.

His research also indicates that continuous improvements in manufacturing and support system technologies will allow companies to better adapt to market changes.

Panwar presented on this topic as a keynote speaker at the 2012 Division 5 International Union of Forest Research Organizations Conference on Forest Products in Lisbon, Portugal. He is one of the eminent sources on corporate social responsibility and strategic management in the forest products industry. Panwar has written many papers on these topics, including for the Food and Agriculture Organization of the United Nations. Panwar is also the editor of the "Journal of Forest Products Business Research" - a publication of the Forest Products Society.

The FPJ is also a publication of the Forest Products Society, an international nonprofit association that provides information on the forest products industry. The FPJ is respected among peers in the forestry sector for its peer-reviewed findings on the state of wood science, technology and issues of importance in the international forest products industry.