Posts Tagged ‘key objectives’
How to Run the Cost-effectiveness
In these difficult times, managers reduce costs to bring the situation. A reasonable approach, at least to some extent. Some even advocate the thesis that the reduction of costs can not generally be achieved by methods of participatory management and democratic. It is clear that individuals who will be affected not smile at the suggestion to “cut their heads.” To induce this behavior requires a particular kind of crisis, just as it is obvious that, if not reduce costs, we are left without work.
But cost reduction is dangerous when they lose sight of two fundamental elements: the cost and effectiveness. Effectively replace the word “contribution to key objectives.” Then, compare the cost objectives. What happens? Well, the results can be quite surprising.
When the lens allows, may be necessary to increase spending. You do not want to follow the example of a company facing a drop in customer numbers and revenue, has decided to reduce its sales to disappear from the market. Therefore, profitability, often it should mean to provide new resources for uses that offer the best potential return. For example, before the current crisis, a company of tourism and hotel services has decided to launch a program to reduce costs and invest those savings in more advertising to attract new customers. The company even asked its workers to “save money for the company to use to get new customers.” They all work in the effort to reduce costs and the results are very positive.
Economic crises are more painful when we see people who suffer the consequences. However, it is an undeniable fact that companies that learn to survive in adversity more strengthening, more aggressive and arguably more cost effective.