Artemis Sportswear Company
Artemis Sportswear is a manufactory company that provides high quality women's, men's, and children clothing and distribution of active outdoor apparel and footwear. In today's competitive business reality, company faces some difficult decision regarding expenses. Nobody wants to cut back on quality or service, nor can a company afford to lose money for a prolonged period. Artemis Sportswear must lower its operating costs and increase productivity just to survive. Reducing fixed and variable expenses can be one way to maintain an acceptable profit margin in the company. However, the Artemis Sportswear company must approach cost cutting very cautiously in their own ethical standards and along with potentially compromising company's operational effectiveness in order to stay competitive in today's market.
Artemis Sportswear Company's way to reduce operational costs is to become more diligent of where their money goes and improving there business ethics to increase their productivity and profit margins.
Part of the problem is that they have too many drivers that increase their spending. For instance, the reasons for the high costs are in their "decisions rights, information and metrics, motivators, and structure." (Erickson, 2007) Thus, they would need to restructure the way that these areas of high cost, to reduce and maintain a low-cost environment.
There are two ways of looking at decision rights, the way that drives up the high costs, and the way that maintains a low-cost environment. When you look at anything that may or may not affect costs you first have to analyze what is making the costs go up. Overly centralizing decision rights drives a narrow span of control and doesn't broaden it over items that are in need. When there is lack of clarity in the decisions about rights it leads to an increase in inefficiency about resource deployment. This inefficiency is also brought on by decentralized decisions. Of course when you...
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