Cost-Consciousness Culture and Cost-Reduction Strategies to Carry on Business Sustainability

Abstract

At present in the era of globalised economy, profit maximisation must not be considered as the sole objective of business. To survive in this competitive environment i.e. to maintain the sustainability, business is expected to relocate its focus on value maximisation instead of profit maximisation as the prime purpose, bearing in mind that 'price is what you pay, value is what you get' and to touch the target, each business should take heartiest initiative to bring down its costs. This mission can only be fulfilled with the generation of cost conscious culture throughout the entire business sector; as such culture crops up organisation's corporate values along with business strategy so that success of business is achieved. Creating sustainable cost alteration should not be considered as a change in process - it is a change in philosophy requiring complete organisational commitment and involvement. Various strategies, like implementation of ABB, ABC, Kaizen, standard costing etc. should be put into effect as the techniques regarding cost reduction.