Managers are confident that they can guide their organisations through the economic turmoil.

A survey of 1,118 senior executives by the Chartered Management Institute (CMI) showed that, despite 66 per cent of managers saying that the crisis was having a negative impact on their organisations, 55 per cent said that they were “optimistic” or “very optimistic” about business prospects in the next year.

About 68percent of respondents said that the key to survival was to “focus on product innovation and service”. Only 35 per cent thought that cutting costs during a recession was a good business strategy.

Despite the bravado, however, many managers admitted that they were finding the environment tough, with 54 per cent saying that “work has become more stressful”, 75 per cent responding that the downturn had presented them with “greater challenges” and 37percent noting that they were “more focused at work”. One in five was losing sleep about the economic uncertainty.

The majority, 82 per cent, believed that focusing on their management and leadership skills would help them to survive the recession.

Jo Causon, a CMI director, echoed those views, saying: “In these challenging times, it has become more important than ever to demonstrate strong leadership. It is vital that the UK's leaders remain composed in the face of growing economic pressure, because kneejerk reactions will serve only to exacerbate the problem.

“It's easier to manage when times are good, but the current climate is a real test of how strong the UK's leadership credentials are.”

However, workers do not appear to think much of their managers' capabilities. A survey of 200 business people by the Aziz Corporation showed that few people believed that their managers had experience of how to deal with a downturn and many believed that managers were using the turmoil as an excuse to cover up problems caused by their own mistakes.

There is a widespread perception that business leaders are reluctant to be totally honest about financial problems - 74 per cent of those surveyed said they believed that companies were reluctant to communicate the extent of the financial problems they were facing.

Senior managers may be reluctant to communicate unpleasant news; however, this flies in the face of the wishes of their employees. Nine out of ten respondents agreed that staff would like to know the full extent of any bad news.

Despite the optimism reported in the CMI survey, the Aziz Corporation reported that 66 per cent of business workers believed that too many managers regarded being positive as more important than being realistic.

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