Outline
This is a statement response paper on cost-cutting for business by Stephen Rampur. A brief summary of the author’s work and the perception regarding cost-cutting. Ideas for business. What are some of the most important primary issues as presented by the author? How this article confirms some of the previous beliefs and the challenges. What are some of the proposed additions or more options available for businesses in reducing costs?
Main text
Of all the conjoint beliefs held by a number of businesses, making redundant some of its employees has been the primary method of cutting costs. Most companies resort to this because it is one of the simplest methods to answer their immediate question of cutting costs. This became common especially during the financial crisis of 2007-2008 which led to one of the greatest recessions. In this article, Stephen Rampur disagrees with this notion and presents some of the many options that companies have in cost-cutting and still remain in business. He disagrees with the idea that the first option is to retrench employees as most companies did. In this article, some of the options Rampur includes asses company finances, best personnel management, marketing strategies and plans, administrative expense, waste management, looking for new business models, reviewing the available equipment, vendor contracts, and office /rent. All these can be adopted as deemed necessary by the management. (Rampur, 2012)
As stated above there are very important mechanisms that a business can be espoused by a firm to reduce costs. It is important that companies adopt some of these before resolving to retrench people. The creativity in management is determined by how they handle the issues in times of challenge. The reason this is important is that the company allures the public, allows coexistence, and appeals to people when it employs many locals. They tend to identify with the business as being part of them. I concur with Rampur in this article especially when he says that the loss of good employees may be a more comparable financial crisis. I subscribe to the author’s opinion at this point because for instance when a productive worker is retrenched, a competing firm takes him/her, it will energize the team in the competitor firm and therefore give a big blow to the former. In the long run, this method will be expensive to the company as compared to regulating the expenses incurred by every department. (Young, 2003)
Before the economic recession, which interfered with the economic stability of countries across the globe, a number of businesses retrenched their employees. For instance, just before the dawn of recession Lehman investment bank had already started retrenching its employees. The bank still collapsed this notwithstanding. The company had so many options as presented in this article, which they did not exploit. To the worse, their auditors Ernest and Young even helped them add erroneous figures to their balance sheets with intention of pleasing the government and investors that they were still performing well in the market. I believe that most businesses have since adopted some of the strategies as presented in the article and have managed to overcome some of the hardest times. (Rampur, 2012)
Conclusion
In conclusion, I share a lot of the observations made in this article but then tend to believe that more can still be done. Government involvement and necessary checks and controls can be important in ensuring the business perform better. For instance, so many questions were raised in the government’s participation in the Lehman investment bank’s fall. I think more emphasis can be put on relevant regulations being made with professional business practices. This will stop individual pursuit from adopting policies that only favor their interest but to those of the company and the interest of employees. (Wong, 2004)
References
Rampur, S., (2012). Cost cutting ideas for business, Web.
Young D.W., (2003). A manager’s guide to creative cost cutting: 181 ways to build the bottom line. McGraw-Hill: New York, N.Y.
Wong, Y.C,(2004). Cost cutting: besides staff, what else? Prentice Hall: Singapore.