Unexpected changes in business circumstances, such as recession, rising of raw-material cost, changes in export markets, have affected seriously business earnings during last few years. Many companies are struggling for existance in a situation where costs are rising but price increases are becoming more and more difficult to obtain. To maintain desirable earnings in the face for these conditions, they are taking crash and drastic cost reduction programs to reduce costs, eliminate waste, and increase productivity. The purpose of this article is to examine environmental factors affecting business earnings mainly in manufacturing industry and to propose The Integrated Cost Reduction Program with more promising long-range results and to suggest business strategy for creative adaptation toward changing business environment. Most of our manufacturing enterprises have high material cost pattern, and so values added and marginal incomes, are very low. To increse those contributed values and marginal incomes, most attention should be focused to reduce variable cost especially material coat. First of all, the minimum possible cost of producing a part or product should be attained by the careful decisions made in the production design of products and the design of production system to produce products. And, next, cost reduction program should be designed to stimulate creative thinking about work, in fact, about anthing that results in a net gain to the business, to produce ideas for improvement that come to add to it`s earnings. But crash and drastic cost reducton, more or less on the spur of moment should, but cannot, always he avoided. Crash programs involve high levels of direct, hierarchical pressure for change or improvement and evoke hostility, resistance, and other counterforces. They, in the long run, cause further deterioration in it`s business earnings. Nevertheless, high productivity levels with low cost operation would be obtained by building cooperative systems that have high motivation, high performance goals, efficient communication, and good framework, and that seek in every way to achieve the organization`s objectives in the most economical and most efficient manner. Even if the earnings are satisfactory, it is advisable to take $quot;the integrated cost reduction strategy$quot; in terms of future and to reduce cost so as to be ready face unexpected adverse circumstances. Since the environment in which an enterprise operates is certain to change it can he no exaggeration to emphasize the importance of flexibility in managing. Not only must an effective management be able to recognize change but, preferably, so that he will have time to meet it, he should be able to anticipate change. Of course, it is always important to adapt to his environmental changes rapidly. intelligently, and rationally, but more desirable is creative and positive adaptation toward them.