Cutting cost? not so easy... feasible though.. very

For me, cutting cost can be done in 2 methods:
1. Cutting cost, reduced the fixed + variable + bla bla bla cost
2. Makes more profit.

Well, you should be wondering why I put making profit in the cutting cost measure. The bottom line of cutting cost is................ increasing profit right? so.... making more profit in a way, is a cutting cost. Both works for the same goal.

It does seem that normally people think about no. 1 option only in increasing profit. Strange that how people go very far to save on teeny weensy items just to reduce cost. Even in personal life, we scrimp, eat less, spend less on clothes, and so on in order to increase our savings. Rarely does we ever think of making more profit in order to increase savings.

In corporate world, it tends to be hierarchical. Well, it needs to be so if it wants to work. Unfortunately, when cutting cost is done, it uniformly (most likely) affects the bottom rank the most. Therefore, we see laying off here and there. We see the pervasiveness of part time workers for the sake of reducing benefit cost to the company (contract workers are not entitled to paid-leave most of the time and no benefit, no bonus). Rarely did we ever talk about getting the managers to get more projects, perform better and increase profit from their work. Strange huh!?

Say a company of 60 man (small one), having 40 bottom rank people. Not raising their pay by S$200 saves about S$96,000 annually. On the other hand, a manager working harder to seal 2 projects of S$60,000 each with 15% profit margin increases profit by S$18,000 a year. That's with a very conservative profit margin considering that nowadays a profit margin of 50% is entirely feasible. Therefore, 6 managers working harder to seal 2 projects can actually cover the cost cutting measure. Imagine... straining 6 instead of 40 men! Yet.... those high up tend to stress only the bottom rank. I wonder why.

Frankly my dear, those middle managers (in my view) seem to work less than the top and the bottom rank. Since they are at the middle section, their work will tend to rely on the flow from the bottom and the top's approval. Therefore, most have poor time management which should translate to higher cost. I have seen managers dilly dallying at most of the time in the days, churning works slower than the bottom rank (same type of work) and yet not improving the company's profit margin by any bit too often. There should be a way to motivate these managers to improve their productivity, really