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Well, it's December and the holiday season is upon us. In business, enterprises are certainly operating in a different climate this year. The credit crunch worldwide is causing companies to crunch numbers when it comes to Christmas parties and the like. It's definitely a season unlike those in recent history. It portends to be the way companies may choose to conduct affairs for good in the future.

 

The era of extravagance is over in many corporations. Sure, there will be those who have maintained their financial health and are still booming. These may not curtail their planned Christmas celebrations significantly, if at all. However, many will and are; they're cutting back on what they are giving to their employees and customers alike.

What's causing this new way of doing things in business entities worldwide? It's the recession tied to the subprime mortgage crisis in the United States. With national economies linked to one another worldwide, a crisis in a major nation like the U.S. spreads rapidly to a host of other nations. Very quickly, a national crisis becomes an international one. This is exactly what we are seeing today, and businesses are suffering.

Christmas at work is now a victim of excesses on Wall Street and elsewhere. As they continually say, what happens on Wall Street affects Main Streets in many countries. Now, at this time of year companies are cancelling Christmas parties. If they choose not to cancel them, they are scaling them back. They are also cutting back on their Christmas card mailings or cancelling them altogether. A penny or dollar saved is definitely one earned in today's financial atmosphere.

Many companies are choosing to scale back their corporate Christmas gifts to their preferred clientele as well. On top of all that, companies are cutting back on end-of-year performance bonuses and Christmas bonuses. It's a way for businesses to put the brakes on spending to help survive the downturn.

In the current economic environment, cash flow is key. Companies have to keep cash flowing in to be able to pay their expenses. Rent, mortgage, taxes, salaries and wages, advertising, utilities, inventory, and other expenses all require on time payment. In times of economic uncertainty, corporations are looking to maintain and even build their cash reserves. Whatever cash comes in they're not doling it out unwisely. That's why companies are having no Christmas parties, or having Christmas parties but without all the trimmings.

The current mindset among many corporate executives is to hope for the best, but prepare for the worst. Many are planning to maintain not gain sales in 2009. They are looking at the economy realistically and know that consumers are decreasing spending. Consumers have no choice. Job losses continue and major companies once thought of as 'blue chip' enterprises are faltering. People do not know if they will have a job when they show up for work the next day.

Wise business executives are making contingency plans to maintain the financial health of their enterprises. They know a prolonged recession can sap their corporate resources quickly. They're making the hard decisions now so they can avoid layoffs and closures. Hence, the decline of the corporate Christmas party, and attendant holiday offerings.

Just what are companies doing, along with cutting back on Christmas expenditures? Aside from personnel layoffs, which seem to dominate the news lately, what other measures are companies taking? The following are five ways businesses are getting a handle on their cash flow:

Cutting Advertising Expenditures

While this is not always a good thing to do, some companies are cutting in this area. Yes, they still want to grow their sales. However, they're looking for less expensive ways to get the word out about their products and services.

Cutting Corporate Sponsorships

This involves a myriad of areas. Some companies are cutting back on sponsoring sports events and teams. Others are cutting back on expenditures in the arts. Some companies are also decreasing their expenditures when it comes to sponsoring community events.

Cutting Back on Charitable Donations

Unfortunately, some are also cutting back when it comes to charitable donations. Others are maintaining their current levels but are cancelling planned increases. They are doing so to build up cash reserves so they remain viable going concerns. In the end, this will pave the way for future donations to charities. A charity cannot receive donations from corporations that no longer exist.

Cutting Back on Travel and Entertainment

Some businesses have no choice but to send their executives, managers, and employees on business trips. The recession is causing companies to look at value for their dollar in this area. Employees are finding their meal and entertainment budgets frozen or reduced. Their flights may now be economy class. Economy-class hotels and motels are becoming the order of the day for some firms.

Cancelling Planned Corporate Expansions

Companies are also placing on hold, or cancelling, their corporate expansions. Again, it's building up their cash reserves for future rough times and letting aggressive plans to expand sit on the back burner. Companies are waiting until growth is prevalent for a sustained period throughout world economies.

It certainly is the season for frugality at businesses around the world. It's a tough decision to cut back when it comes to Christmas parties. presents and bonuses, no one wants to be considered a Scrooge, but it is necessary considering the pressures businesses are facing. Companies are hoping they can weather this season's storms, figuratively and literally, so they can enter the New Year in better financial shape.