The Economic Crisis and Occupational Stress
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The Economic Crisis and Occupational Stress

Ritsa Fotinatos-Ventouratos and Cary Cooper

The global economic crisis of 2008 caused the collapse of the world’s financial institutions, large-scale unemployment, the devaluing of housing stocks leading to mortgage defaults and left many countries in debt, unable to meet their financial obligations. The consequences of this in the workplace were substantial and for those who remained employed, longer working hours, heavier workloads, an insecure working environment and micro-management became manifest. Examining the impact of the recession on organizations and individuals at work, this book explores the long lasting effect the crisis will have on workplaces for the future. An insightful and thorough account of how the economic crisis has unfolded on an international scale is presented and the profound psychological impact that this recession has had on the workplace assessed.
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Chapter 2: The origin of the economic crisis

Ritsa Fotinatos-Ventouratos and Cary Cooper


In order to assess the psychological impact of the economic crisis, it is essential to take one step back and shed light on how we have reached where we are today. By getting to grips with the origin of this global crisis and by fully understanding various world events that unfolded, a greater and more solid vision can be established. This is necessary because any world economic crisis not only means economic misfortune, but also psychological turbulence in the world of work occurs simultaneously. It could be suggested that at the most superficial level, the rate of growth of any economy is by definition the sum of productivity growth and workforce growth, the latter of which appears to have been neglected or pushed aside dramatically in this current world recession. However, beginning nearly two centuries ago, the true determinants of economic growth were outlined in the Primitive Production Function model (as cited in Strategic Economic Decisions, 2010), which clearly included the workforce as a key determinant factor in the equation. More specifically, the output of an economy began to be interpreted via a simple theory in which existing technology transformed the three basic factors of production into output. These three ‘input’ factors were land, workforce and capital.

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