
Deficient cost control is the result of management risk 319
best is Southwest Airlines. The worst case is US Airways, which has gone bankrupt.
It is appropriate to take notice that the correction of a cost situation that has gone out
of control is a rewarding exercise. An example is given in Figure 15.3 with Bank of
America. In the mid-1980s its overhead had run wild – equal to the worst case in
Table 15.1. Then, over a period of less than two years, a new management was able
to trim the overhead by nearly 25%.
15.3 Alert companies are in charge of their risks and of their
costs: Berkshire and TIAA
What cost-restructuring can produce in terms of economic ...