Peter F. Drucker Boxed Set (8 Books) (The Drucker Library)

CHAPTER TWENTY-SEVEN

Permanent Cost Cutting: Permanent Policy

SCORES OF LARGE ORGANIZATIONS—businesses of all kinds but also government agencies, hospitals, and universities—have sharply cut staffs these past few years. But few have realized the expected cost savings. In some cases costs have even gone up. In many more performance has suffered. And there are growing employee complaints about stress and work loads.

Cutting staffs to cut costs is putting the cart before the horse. The only way to bring costs down is to restructure the work. This will then result in reducing the number of people needed to do the job, and far more drastically than ...