Cost reduction in the time of crisis |
The 2008/2010 period was very difficult for both employers and employees, all over the world, as well as in Serbia, and it is expected, according to estimates of experts, that the effects will be felt until 2014 and even later in some industries. Surprised with the crisis situation, without proper cost management, most companies resorted to rapid cost reduction strategies. As revenues fell, and cash flow was reduced, the companies of all sizes have established a stringent controls of every major expense as the first answer to the crisis. The strategies that companies have implemented in this period had a more or less profound effect on their business. This paper analyzes the most frequently used strategies for cost reduction applied during the 2008/2010 crisis in companies around the world, describes a logical sequence of events and consequence, which follows their implementation, and proposes that a new proactive approach to cost management and cost reduction in companies be introduced, which should support stable business in good times as well as in bad times.
Tanja Milić |