Abstract
It is important for a company to keep the high level profitability through investing on R & D projects. The global competitions are heating up and only the companies who invest on the right projects can survive. In such circumstances, they pay attention to the best usage of the precious financial resources credit. With the limited financial resources, the cost effectiveness is very important aspect, especially in the pharmaceutical industry. This research tried to find the critical factors of the cost management that contribute to the corporate profitability by multiple regression analysis, t-test and interviews to the excellent companies. It was found that the cost management maturity strongly correlated to the profitability. From the multiple regression analysis, it was found that the motivation supported by appropriate appraisal system directly affects to the corporate profitability, and the cost flexibility, IT system, strategy execution plan, and vision sharing are supporting the motivation. The comparison between the companies whose profitability were more than 20% and less than 10% showed that the cost flexibility was the most significant effort of the excellent companies. As a solution, this paper proposes the best practice of the cost management aimed to maximize the effectiveness of cost usage.
