Abstract
Projects on environmental protection and personnel management have a significant impact on the level of fixed costs and changes in operational risks of industrial enterprises. The most effective implementation of these projects is possible at the stages of production growth and expansion of sales of companies. At the stages of recession, this work requires strict control over the level of operational risk and changes in the share of fixed costs in the cost of production. Improving the efficiency of environmental and personnel management projects requires maintaining an optimal level of operational risk. It is proposed to retain project risks at the planned level by controlling and regulating the amount of fixed costs at the enterprises. Various regulatory systems are proposed for periods of recovery and recession of economic activity of enterprises.
Highlights
The relationship between risk and return is a key concept in business financial management
While during sales growth operational risk retention allows the introduction of additional positions of nonproduction workers and other elements providing for an increase in fixed costs
The following conclusions were made based on the study of the changes in operational risks at enterprises as a result of budgeted sales increase or decrease
Summary
The relationship between risk and return is a key concept in business financial management. Personnel management improvement at enterprises to a large extent aims at personnel reduction and labour productivity increase [12-15] When implemented, such improvement projects modify the proportion of the company’s fixed and variable costs and affect the level of operational risk. This article presents findings of the study of changes in the level of operational risks at enterprises with high and low percentage of fixed costs in the cost of production depending on increasing or decreasing budgeted sales. This is when it is necessary to keep operational risks at an initial level to ensure sufficient efficiency of new personnel management projects. Operating leverage for enterprises with relatively low percentage of fixed costs rises from 3.7 to 5.29, i.e. becomes 1.43 times higher
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