This collection of papers is a compilation of research analyses undertaken by Chiba University of Commerce's Institute of Economic Research Project Topics in Cost Management in Modern Society. Cost management is an important management tool for modern-day companies and society. As such, cost management can be expected to play a role in addressing a variety of issues.
Cost management has always been extremely important in managing companies both in theory and in practice. This holds true in the present as well. Management is said to blossom during difficult economic times. Management theory is certainly blossoming all over. The flowers of cost management in particular are said to bloom and promote the blossoming of truly grand flowers. These days, a number of events tied to the weak economy continue to occur-surging materials costs, personnel cuts and other restructuring measures, factory and store closings, suspension of corporate advertising, and curtailing of unprofitable routes. In times such as these, sales do not increase and on the contrary, we cannot even expect sales to remain steady. As a result, the route out is through cost cuts. This sets the stage for cost management theory and practice.
That said, true cost management sometimes takes a wrong turn. This is flawed cost management. For example, worsening operations forcing industrial rice unfit for consumption to be sold as food. Falsely labeling foodstuffs with short lives with new expiration dates, extending consumption terms, and selling these goods. Similarly, reusing out-of-date materials. Or ignoring safety by faking earthquake resistance data and cutting steel content in an effort to cut materials costs. Whether such steps are deliberate or not, reports of these types of cost cutting measures, like cases of selling condominiums with inadequate steel construction, go on and on. Such cases of cost cutting that should not be occurring do not cease.
On the one hand, cost management that prioritizes safety, even despite higher costs incurred from emphasizing safety, is considered laudable. Like companies that emphasize employee's senses of togetherness and unity, converting employees of subsidiary companies with different compensation packages to headquarter employees. Many companies should adopt management strategies that, in weighing ensuring safety and cost increases, prioritize safety. Companies must do this in terms of carrying out their social missions. However, in reality this is pretty difficult to manage. We hope that companies can strive to implement cost management that does not lose sight of the important issues in their everyday operations.
Cost management is not only going on within companies, but also on a wide scale throughout society. The high cost structures in the airline industry are continuing to hurt operations. As revenue plunges with declining passenger numbers, cutting costs is the only way to stay in business. To that end, a variety of cost-cutting methods are being employed. The strategy of low-cost air carriers is to focus on weak spots and further debilitate their competitors. The companies can issue cheap tickets by cutting costs as much as possible, and then use these as weapons to compete against more established companies. Both sides are waging battle with cost cuts. The side that can produce results from cost cutting will emerge the winner.
Surging materials prices have raised cost awareness further. Raw materials costs can be controlled by using cheap substitute materials. Materials are not wasted. A sense of 'wastefulness' is a step forward for cost cutting. As cost awareness grows with people's sense of 'wastefulness,' huge cost reductions will follow. In times when goods fly off the shelves, there is not much concern about cost cutting. When times worsen and goods do not sell so readily, everyone is concerned about cost cuts. These are such times. There is thus a mountain of issues that must be addressed in modern cost management. As one case, we have added a more in-depth study of cost management for public works projects and in the construction sector.
