Wednesday, June 01, 2005

Rupee wise, Dollar foolish?

When costs are to be cut, why are companies "penny wise, pound foolish"?

In more than one organisation I know, the cost cutters first struck at free tea that was served to employees ( which saved them a rupee per day per employee). The next "big opportunity" they saw was "night snacks", which were essentially a hardship allowance for those who stayed back at work and not because they did not have a home to go to. Executives continued to travel business class and stayed at 5 star hotels. Marketing strategy meets were held in exotic places while the company associates struggled with spartan after hours transport.

Researchers toil in their labs at 25 degrees while the corridors were kept cooler ( because clients walk the corridors-wow!). Another company I know started charging associates for using company transport (a mini bus) and started to provide reimbursement for those who used cars to commute!

Air conditioners are switched off or run at higher temperatures. Wow! And I thought that cost cutting meant cutting excesses, not necessities. These are not isolated phenomenons, I am sure.

But the question is, why is it that cost cutting always looks insincere to the persons lower down?


Anonymous said...

i think its got more to do with the fact that lower end people are considered commodity.

while it may not be so...the top are ONLY ones that matter to the company (wrong strategy no doubt...but thats the way it is)

Kumar said...

It is true.But even in that situations only 20%-30% of the people quit,remaining continue.Most important thing is nobody dares to ask these questions in the company meetings.I think thats the major reason companies continue to do such cost cuttings.