Case 16 Trimming Expense Accounts
Setting: Consulting Firm; Your Position: Senior Partner, Administration
The consultants in your firm spend much of their time visiting clients around the world. Recently changes in the market for consulting services have made collaboration and exchange among consultants far more important. Accordingly, you were receptive to a proposal from the managing partner to try out a two-week workshop on team building offered by an external consultant. You were skeptical, as were your consultants, but after much complaining and adjusting of travel schedules, the workshop took place. The results far exceeded your expectations, and you have been able to use your "team" on several general policy questions.
Competition in the market has recently exerted considerable pressure to reduce costs. One of the principal sources of costs is travel. You have asked the accounting department to review a sample of past expense reports. They have just given you a detailed report showing that 55 percent of all travel expenses incurred by the consultants were avoidable. This total figure was broken down into categories to enable you to assess the contribution of specific practices to the excesses.
You have studied the analysis at considerable length. Some of the proposed savings would require executives to stay away over a Saturday night--a practice that you regard as unreasonable. However, you are impressed with the savings that could be achieved by such steps as restricting first class air travel to only those occasions when economy class is unavailable, requiring the use of airport buses to hotels instead of taxis, and the like. Even more savings could be made if the consultants carefully planned trips so that multiple purposes could be achieved in the same trip where possible.
You feel strongly that the success of any cost-saving measures will depend on the amount of commitment to them. You do not have the time (nor the desire) to closely review the expense reports of each consultant. However, you know that none of them share your concern over the matter. They lack the data in which you have immersed yourself for the last few weeks and would probably lack patience with the "needless interference with their ability to do their jobs as they see fit." Having once been in their position, you know they all feel themselves deserving of travel amenities. Your task is to determine which changes, if any, are to be made in current travel and expense account practices in light of the market.