If the direct and indirect costs are scaled down in line with the loss of business, hopefully this is sufficient to alleviate the capital shortage.

In addition to cutting costs, the company should also look for ways to increase revenues to temper the financial impact of some of the loss of business. While much of the other recommended work falls to senior management and the human resources department, this component of the recommendation falls mainly to the sales staff, along with senior management. The sales staff must creatively pursue new opportunities for incremental revenue growth that will, in concert with the cuts, allow the company to stabilize its financial situation. Increasing revenues, unfortunately, often means increasing the R&D budget due to the time-consuming nature of courseware development (Kang & Goodyear, 1996). This means that new sales growth will likely come from the re-purposing or re-marketing of existing products. The company...
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