Cost Leadership

A company with a cost leadership strategy tries to perform its activities at the lowest possible cost, opening a cost advantage over the competitors. To achieve a low cost advantage, a company's total cost for the activities in its value system must be lower than competitors' total costs. At the same time, the company must produce features and provide services that customers consider important. (Miltenburg, 2005).

Companies that use Cost Leadership

Function of Human Resource Management when using Cost Leadership

Within human resource management, companies may utilise consistent policies to reduce turnover costs and use effective training programs to improve worker efficiency and effectiveness (i.e. by training production employees reduces waste and scrap) and also use subjective performance measures.

The human resource management team that handles recruitment, training, employee development and organizational development one company can consider cost.  Most of the time for most companies cost leadership in HRM is all about offering lower salaries to maintain their profit margin.