A strategic approach to overhead management
Article publication date: 7 March 2008
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.
The paper reframes how overhead can be categorized and assessed.
The paper finds that viewing overhead as an investment in a capability is the key to preventing wasteful stop‐and‐start cost‐cutting initiatives.
The paper presents a way to protect the critical capabilities of organizations that are likely to be at risk during cost‐cutting initiatives.
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.
Lee, J. and Covell, M. (2008), "A strategic approach to overhead management", Strategy & Leadership, Vol. 36 No. 2, pp. 40-46. https://doi.org/10.1108/10878570810858202
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