Cost control also known as cost
management or cost containment is a broad set of cost accounting method and
management techniques with the common goal of improving business cost
efficiency by reducing cost or at least restricting their rate of growth.
management or cost containment is a broad set of cost accounting method and
management techniques with the common goal of improving business cost
efficiency by reducing cost or at least restricting their rate of growth.
Businesses use cost control methods
to monitor, evaluate and ultimately enhance the efficiency of specific areas,
such as department, divisions or product lines, within their operations.
to monitor, evaluate and ultimately enhance the efficiency of specific areas,
such as department, divisions or product lines, within their operations.
During the 1990s, cost control
initiatives received paramount attention from corporate America. Often taking
the form of corporate restructuring, divestment or peripheral activities, mass
layouts, or outsourcing. Cost control strategies were seen as necessary to
preserve or boost corporate profit and to maintain or gain a competitive
advantage. The objective was often to be the low-cost producer in a given
industry, which would typically allow the company to take a greater profit per
unit sales than its competitors in a given price level.
initiatives received paramount attention from corporate America. Often taking
the form of corporate restructuring, divestment or peripheral activities, mass
layouts, or outsourcing. Cost control strategies were seen as necessary to
preserve or boost corporate profit and to maintain or gain a competitive
advantage. The objective was often to be the low-cost producer in a given
industry, which would typically allow the company to take a greater profit per
unit sales than its competitors in a given price level.
Some cost control proponents
believed that such strategic cost cutting must be planned carefully, as not all
cost reduction techniques yield the same benefits.
believed that such strategic cost cutting must be planned carefully, as not all
cost reduction techniques yield the same benefits.
