Downsizing: Costs and Assigned Government Executive

Industry downsizing has been a major part of the incorporated world, rase establishment agencies are downsizing. GovernmentExecutive. com covers the business of the federal government and its extensive departments and agencies dozens of which dwarf the bangingst institutions in the private sector on its website. get wind the assigned Government Executive article and answer the following questions Which industries nurse substantially reduced fixed cost commitments? Do you believe this step-down in costs has substantially impaired the ability of these industries to meet the demand of their customers?It appears that both privite and public sectors are reducing fixed cost. According to Ciccotello and Green, the technology, auto, and government industries have substantially reduced fixed costs. The specific examples referenced in the article, Industrys Downsizing Lessons, were IBM, Honda, and the DoD in some cases the downsizing has been beneficial and in others it has been det rimental. DoD has taken the lead in the period round of federal downsizing, instituting several initiatives to reduce permanent staff positions, entrust more than on temporary help and outsource production.Honda made large cuts in its permanent engineering staff in response to the more volatile sales environment for automobiles since the mid-1980s. These cuts left Honda unable to keep chiliad with its competitors in the design of new automobiles. The results have been the loss of market fate and profit for Honda, which now faces the difficult task of trying to catch up. The meaning of cutting fixed costs too far could be even more dangerous for a government enterprise like DoD. The estimator fabrication is chop-chop changing technology is causing companies to reassess large, fixed-cost commitments.As a result, evidence of decreasing operating leverage in this industry abounds. Many large computer firms have made dramatic cuts in permanent staff. Standard and Poors reports that IBM had more than 370,000 full-time employees in 1990 and fewer than 270,000 in 1994. At the same time, computer firms have greatly increased outsourcing of products and leasing of equipment. twain of these trends reduce the requirement for large in-house expenditures on personnel, plant and equipment. Outsourcing and leasing make the enterprise more nimble, more able to quickly adapt to a rapidly changing sales environment.