Cost-Cutting Strategies

Analytical Essay # 115857

Business > Management

This paper examines four articles dealing with the topic of effective cost-cutting strategies.

1,837 words () | 5 sources | APA | 2009 United States

Paper Summary:

The paper analyzes Chris Murphy's article "What's Next" that focuses on current IT outsourcing practice and Lee and Margaret Covell's article "A Strategic Approach to Overhead Management" that discusses operations cost-cutting. The paper then looks at Joseph Bozada's article "Generating Shareholder Value: Much More Than Cost Cutting" that suggests that worker layoffs might be counter-productive and finally, the paper examines the editorial in the Measuring Business Excellence magazine that explains how improved cost-efficiency can also be achieved through an innovative use of accounting and financial processes. The paper notes that all four authors agree that companies need to look beyond such traditional cost-cutting methods as layoffs, outsourcing and downsizing.

Outline:
Introduction
Analysis: New Perspectives on Outsourcing and Operations Cost Cutting
Analysis: Novel Approaches to Cost Cutting
Conclusion

From the Paper:

"In today's challenging business environment, companies are considering cost-cutting strategies more often than just a couple of years ago. There are three well-established methods of cost cutting: downsizing, outsourcing and cutting the costs of operations (Crampton & Hodge, 2007, p.341). Managers usually turn to one or a combination of these strategies during difficult economic times and/or situations of company underperformance. However, according to many analysts, such behavior might be counterproductive and even dangerous (Bozada, 2004, p.17). While hasty layoffs and downsized operations might improve the immediate financial situation, in the longer term they might create a strategic disadvantage and even cut into future revenue gains. According to Bozada, this happens because "This approach primarily focuses on cost cutting and will, by definition, only produce limited results" (p.17). What is needed therefore is a strategic and innovative approach to the concept of cost cutting."

Sample of Sources Used:

Bozada, J. (2004). Generating shareholder value: much more than cost cutting. Chemical Market Reporter, 265(2): 17-19.
Crampton, S., Hodge, J. (2007). Age discrimination and downsizing. The Business Review, 7(1):341-347.
Editorial. (2004). Power of finance goes beyond counting cash. Measuring Business Excellence, 8(1): 72-73.
Lee, J. , Covell, M. (2008). A strategic approach to overhead management. Strategy & Leadership, 36(2): 40-46.
Murphy, C. (2008). What's next. Information Week, 1176: 29-31.