Cutting business travel budgets is a bad idea

Recent reports show that companies that try to save money on travel may be losing business

Travel Insurance News - 18/05/2009

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With the recession hitting hard, most businesses are doing everything they can to pinch pennies and stay afloat. To many, one of the most obvious areas where savings can be made is in business travel, with many companies opting to cancel business flights and trips altogether.

However, in recent reports business advisors have suggested that cancelling business trips abroad is actually a false economy as they can be extremely beneficial. A study by professors at two foremost U.S. business schools indicates that companies which opt for communication with clients via the internet on video conferencing rather than flying to meet them in person risk missing out on a kind of trust and bond which can only be attained when people meet face to face.

As Mark Mortensen, professor of Management at the MIT Sloan School of Management told a leading news network recently; "You gain two types of knowledge when you spend time in another place. If, for example, you spend some time in Tokyo you learn about the customs, the way people work, their way of thinking. But there is also what we call reflected knowledge -- you also learn how the way they see you, the way your home office comes across."

Knowledge of other cultures is invaluable to companies who trade in the global market, so perhaps companies should think twice before cancelling overseas business trips.

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