Cutting travel may not be good for business

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Corporations around the world have been coping with the effects of the global economic downturn by cutting costs wherever possible. One of the areas that has seen significant cutbacks is business travel.

At the beginning of the year, when a number of airlines warned they were feeling the impact of the downturn in reduced passenger traffic, the International Air Transport Association (IATA) release figures showing that significantly fewer passengers were traveling in premium classes, and business hotels noted a decline in business revenues as well.

In a time that allows business to connect electronically, and video conferencing enables corporate executives to meet without leaving the office, many businesses began to shun air travel in favor of virtual meetings.

A study by professors at two leading graduate business schools in the US warns, however, that companies reducing face time between key employees separated geographically risks losing out on the development of trust and building of cohesiveness that is possible only when people meet in person.

“The long and the short of it is that you gain a specific type of knowledge if you spend time in another place,” said Mark Mortensen, who is a professor at MIT’s Sloan School of Management, in Cambridge, Massachusetts, in comments to CNN.

Thanks to edition.cnn.com for the above quotes, for more information on this article please visit their website.

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