The first step that we are going to take to know and understand what the term waste means is to proceed to find its etymological origin. Specifically, in doing so we will discover that it is a word that emanates from vulgar Latin and more precisely from the word “minimare”, which can be translated as “reduce something to a minimum”.
Decrease is the deplete action and effect (make something go down or decrease, consume a part of something, remove some part of a certain amount). A loss, therefore, is a portion of something that is subtracted or consumed naturally.
For instance: “The company has suffered a significant decrease in its income in the last year”, “The decline in agricultural production threatens the economy of the Pampas towns”, “The manager announced that there will be a decrease in wages due to the economic crisis”.
In the administration from Business, is known as shrinkage to the reduction in the quantity of goods produced by a difference between inventory books and actual quantity of products available. The decline can be caused by natural (when perishable products expire), operational (goods are damaged during normal company operations), administrative (a failure to register) or external (a theft).
As we have seen, many can be the cause of a company in question suffering a significant decline that translates into a notable reduction in its profits. However, among all those, we can establish that, from the point of view of human resources, the situation may be caused by employees who identify themselves as being unfair with the entity and who, behind the back of their bosses, act by carrying out actions that harm them and the industry in general.
In the same way, on a human level, we can also rule that they can be equally generators of loss, both personnel who are not part of the company’s staff but who work indirectly for it, as well as those who are included within it but that has problems with external agents to it.
In the current economic crisis situation that is being experienced around the world, many are the entities that have suffered notable losses in their benefits, which has meant that they are in very complicated situations of stability or that they have had to close permanently. And it is that the consumption of ordinary citizens has been reduced, among other things.
On a general level, shrinkage is a reduction of a certain amount of the total of something quantifiable. It is said that the purchasing power of the population suffers when there is a high rate of inflation. If one person wins 2,000 pesos per month and inflation equals 0, said person has a monthly purchasing power of 2,000 pesos. On the other hand, if the subject obtains the same salary but an inflation of the 4% monthly, the purchasing power will experience a decline even if the individual has received the same amount of money as in the previous months.