A strategic approach to overhead management
Citations Over Time
Abstract
Purpose of this paper The average company spends 23 cents out of every dollar of revenue on overhead, yet most firms lack a plan or system for aligning the with their strategic goals. This paper aims to look at a strategic approach to overhead management. Design/methodology/approach The paper reframes how overhead can be categorized and assessed. Findings The paper finds that viewing overhead as an investment in a capability is the key to preventing wasteful stop‐and‐start cost‐cutting initiatives. Practical implications The paper presents a way to protect the critical capabilities of organizations that are likely to be at risk during cost‐cutting initiatives. Originality/value The paper offers a new framework for classifying what is spent on overhead and for evaluating the strategic logic of it, so that management can instill a new discipline to managing overhead.
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