Cost management in a wartime economy: problems and areas for optimisation

Abstract

The paper examines cost management in a wartime economy as a strategic instrument for ensuring enterprise viability, operational resilience and long-term competitiveness. It is substantiated that under wartime conditions cost management cannot be reduced to mechanical cost cutting, since certain expenditures become critically important for business continuity, security, flexibility and recovery. The study highlights the main challenges faced by Ukrainian enterprises, including energy risks, logistics disruptions, labour shortages, inflationary pressure, limited access to financial resources, declining purchasing power and increased security-related costs. Particular attention is paid to the transformation of the cost structure in wartime, including basic operating costs, wartime adaptation costs, operational resilience costs, strategic recovery costs and risk-compensation costs. The paper proposes the concept of wartime-adaptive cost controlling, which combines management accounting, budgeting, variance analysis, risk management, scenario planning and digital analytics. The main areas for cost optimisation are identified, including the digitalisation of cost management, energy and logistics optimisation, personnel cost optimisation, revision of the product and customer structure, reduction of administrative costs and improvement of financial flexibility. It is concluded that effective cost management in a wartime economy requires a transition from short-term saving to strategically justified optimisation aimed at strengthening enterprise adaptability, resilience and competitiveness during wartime and post-war recovery.