NEW YORK--(BUSINESS WIRE)--Senior executives at many Fortune 500 companies spanning a wide range of industries are missing key opportunities for cost containment and revenue growth during the current recession, finds a recent survey by Booz & Company. The management consulting firm surveyed 155 senior executives at Fortune 500 companies and found widespread concern that traditional cost-containment measures are falling short during this downturn, as well as clear evidence that new approaches are needed. The survey found that chief executives and other senior managers are struggling with the downturn's scope, timeline, and solutions and often trying to apply traditional solutions to a very non-traditional recession. Ninety-two percent of senior respondents cited "constantly changing objectives due to unstable economic conditions" as a major challenge to achieving their cost-reduction goals. This indicates that such unusual economic circumstances may leave senior executives stymied about implementing new solutions with any degree of certainty that they will work.
As a result, many companies are turning to traditional spending cuts and layoffs. Almost 40% of companies surveyed are focused on cost reduction alone, and most senior managers have already exercised their default plans. Measures such as across-the-board cuts, working capital management, marketing spend reductions, and renegotiating purchasing contracts have been widely employed among respondents. Since these measures typically realize significant savings within six to eight months, they are often the first actions taken by companies during downturns.
