Cost-cutting needs to be balanced: CEOs
By siliconindia   |   Wednesday, 06 October 2010, 14:20 IST   |    1 Comments
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Cost-cutting needs to be balanced: CEOs
Bangalore: As a lesson learned from crisis, most of the chief executives of various companies believe that during a crisis, a well-planned strategy is of utmost importance. Most of the CEOs think that when it comes to innovation, cost-cutting measures need to be balanced with a long-term focus to remain competitive. "I've discovered that you can't actually reduce your costs dramatically and still remain profitable", said an UK-based CEO. These are highlights of a survey. The global professional services firm PwC has conducted a survey, named 13th Annual Global CEO Survey, among 1,198 global business leaders asking them about lessons they have learned so far in areas like financial health, risk management, cost structure and volatility and flexibility. According to the survey, remaining disciplined in terms of costs is always preferable for companies, but many a time, cost-cutting measures adopted by companies result in inefficiencies throughout organizations. The other issues highlighted in the survey include the fact that companies have learned not to rely on a single source for financing. While the companies must encourage banks to lend money, they should also keep ways open for other sources as well, because banks favour companies whose strategy and long-term outlook give them confidence. CEO's also believe that considering the speed with which market conditions change today, there should be enough flexibility within an organization to make changes at a moment's notice, says the survey. One of the most frequently cited lesson learned by CEOs is the importance of good risk management practices, the survey revealed. Although managing risk in a changed environment is a challenge, compared to situations when conditions are improving, risk management is needed in both good and bad times.

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