Tight For Cash? Spend BIG!

It seems whenever the economy takes a crap on corporate (North) America, companies go into survival mode, streamlining productions and cutting cuts where ever they are able. Making them stronger than before s*** hit the fan economically. The E-Commerce Times reports that companies that spend large during recessions end up coming out on top once the economy rebounds. For example; if your company spends $2 million annually on R&D and then spends a fraction of that once the recession hits, then your company will not likely enjoy a competitive position in the market, for obvious reasons. A common problem during recessions is that companies cut costs across the board, every department must save 10% of their budget from the previous year. But there are problems that accompany this strategy. As a marketing graduate, my profs always told me that many companies will cut marketing spending as a cost saving strategy. But how will your company save money by limiting your marketing departments overall effectiveness? It likely won't, sure they'll save money from the budget, but they'll also not enjoy the same level of sales as they probably could. Then the economy will likely be blamed for the slump in sales, not management's decision to handicap their marketing department. The point I'm trying to get across here is that during a recession companies cannot afford to cut costs carelessly, they must make logical, meaningful cuts that will not affect the overall effectiveness of the business.