Scarcity Management – Dealing with bottlenecks through and in communications
Scarcity management is one of five trends identified by the Communications Trend Radar 2023. It is about dealing with shortages and bottlenecks to ensure that corporate goals or functional objectives are achieved. Current events such as labor or energy shortages and their effects, like the recession, have disrupted global supply chains, limited the availability of products and services, and increased costs. The transition from abundance to scarcity challenges companies and their communication.
Communication leaders must deal responsibly with scarcity when communicating for their organizations and when managing the activities in their communication units.
What does scarcity management mean?
Scarcity describes the state of something being in short supply. In the past, increasingly efficient supply chains, overnight logistics, and B2B platforms have allowed more or less all needs to be met without any delay – and led us into today’s “affluent society”. But things have changed recently. Labor shortages, disrupted global supply chains, soaring energy prices, and subsequent effects like inflation have restricted the availability of products and services or increased costs. As a result, even in industrialized countries, the availability of everyday items has dwindled.
When products and services are in short supply, corporate management, and communication executives must deal with scarcity wisely to safeguard the company’s long-term future. An increasing trend toward scarcity management is therefore to be expected.
Scarcity management refers to dealing carefully with shortages and bottlenecks to ensure that both overarching corporate goals and more specific functional objectives can be achieved.
The impact of scarcity on the economy
Scarcity is far from being a new phenomenon and has been intensively studied by researchers for many years. One key finding is that scarcity affects different levels in the economic sphere, and that it can have positive as well as negative impacts.
- Scarcity on the macro level (economies and societies) can lead to an economic downturn caused by missing infrastructure. On the other hand, studies have shown that scarcity can also encourage innovation. It can help to build more sustainable economies, or to invent more energy-efficient processes.
- Scarcity on the meso level (companies) might cause business models to fail. For modern businesses, any bottleneck may have negative consequences for just-in-time supply or delivery. But companies can make a virtue out of necessity and even use scarcity to boost their sales through positive framing („The scarcer, the more attractive”). Consumers, too, can benefit from scarce products or services. The feeling of self-uniqueness and pride of ownership can have a positive impact on individuals.
- Scarcity on the micro level (consumers and employees) can lead to irrational behavior. Consumer research shows that scarcity creates a competitive environment that drives people to maximize their own profit (e.g., stockpiling). On the other hand, having less doesn’t need to be bad. Scarcity can help to break out of established mindsets and think beyond the previous use and functionality of products. This promotes creativity and more responsible consumption.
Recommendations for communication professionals
How can communication leaders deal responsibly with scarcity in order to balance its positive and negative aspects between competitive advantage and social responsibility?
- Communicating challenges and consequences of scarcity: Scarcity can be both a challenge and an opportunity for corporate communications. For example, a pre-order model and waiting times for a desired product can make it more attractive. In this case, communication can focus on positively framed storytelling. On the other hand, delays and waiting times for products can generate frustration and complaints that need to be addressed.
- Managing scarcity in communication departments: Be it missing resources for print products, personnel for events, or energy-saving measures – scarcity and bottlenecks force communication leaders to assess and redesign the business models of their departments. They could introduce new communication products and services that do without scarce resources, or try to adjust the high expectations of senior management and external stakeholders. They can build more resilient internal workflows and enforce internal budgeting and revenue models that cushion supply uncertainties. Last but not least, communicators must outline the value created by buffering negative business effects of bottlenecks through corporate communications in order to keep or increase budgets.
About the study
For the third time the Academic Society for Management & Communication presented the Communications Trend Radar – an interdisciplinary and scientific study on the most important trends that will influence communication management in the near future.
The study analyzes changes in the areas of society, management, and technology. For 2023, the research team identified the trends State Revival, Scarcity Management, Unimagination, Augmented Workflows and Parallel Worlds.
These trends were selected and scored on a scientifically sound basis, developed by a research team at Leipzig University and the University of Potsdam (led by Professors Stefan Stieglitz from Business Information Systems, and Ansgar Zerfass form Communication Management). More than 100 sources from research and practice were included. The study aims to support communication managers in setting the course and guide decisions.