Downsizing Decision-Making Discussion

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Management

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Feb 20, 2024

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docx

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As the senior manager of Izzy’s Bed Emporium, Areama has many decisions to make that will impact effectiveness and efficiency during the company’s downsizing. The first, and likely most important decision, involves creating a new organizational structure and workplan (Lively, 2020). Merging different departmental functions and eliminating positions is the first decision that will then lead to many other decisions occurring. In order to make the decision about the new organizational structure, Areama will need to work with corporate as well as her current employees. A group approach with open communication is vital during a downsizing event (Lively, 2020 & SHRM, n.d.). Areama needs to make sure she stays informed from corporate and is transparent with her employees regarding the process. This will help to build and maintain trust while avoiding rumors that can negatively affect employee morale (ASP, 2020). After decisions are made regarding the new structure, Areama needs to decide how to communicate to the people within the positions that will be affected. Recognizing that this will be painful and difficult for the all those involved, Areama needs to remain objective and do her best to use emotional intelligence to avoid personal biases, be mindful of her choice of words and timing, and recognize that people are not being cut – positions are being cut, and the employees are unfortunately affected by those cuts (Rice, 2021). Being respectful of corporate’s plans, Areama also needs to decide if she thinks it’s best to fight with corporate’s decision about using a consultant to deliver the news given that this is a small-town family- owned company and she likely has a relationship with all the employees. Additionally, Areama will need to decide and work on providing alternative options such as early retirement, voluntary layoffs (considering some many not want to work for a big corporate company after previously being family-owned), and providing outplacement/transition services to displaced employees to help alleviate the stress associated with transitioning to new employment (Lively, 2020). These options will help send the message that the company is still looking out for its people, even when difficult decisions regarding downsizing are necessary. This helps maintain company reputation and employee morale during the transition period (Lively, 2020). Finally, Areama will need to decide about the reallocation of job responsibilities, how to adjust benefits and compensation based on added responsibilities, and how to provide new training to those with expanded roles (SHRM, n.d.). Again, the key to success for this decision involves clear and open communication. Maintaining as much normalcy as possible by continuing with regularly scheduled meetings and procedures, while focusing on the job and emphasizing the new opportunities being presented are all ways to help restore employee morale while maintaining effectiveness and efficiency (ASP, 2020). Given that the downsizing is a nonprogrammed decision for Areama, a systematic process will help with the decision-making process (Black & Bright, 2019).. This involves first recognizing that a decision needs to be made (completed already). Next, Areama will need to generate multiple options. This should involve communicating with other people within the company and being creative. Areama then needs to analyze the options and consider all the factors. This will involve considering the long-term implications as well as thinking critically and again, communicating with others. The next step is to select an option and then implement the selective option. While recognizing not everyone will be pleased with the decision, communication is key during these steps. Sharing information regarding the reasons behind the decisions and addressing any conflicts in a productive way are important to maintain employee
morale. Finally, evaluating the decisions made is an important final step that may then lead to additional decisions being made regarding possible re-hiring or other alternatives if necessary (Black & Bright, 2019). ASP. (2020). 8 Tips for Effective Leadership During Downsizing. https://www.theaspteam.com/blog/8-tips-for-effective-leadership-during-downsizing Black, S. & Bright, D. (2019). Organizational Behavior. OpenStax. https://openstax.org/books/organizational-behavior/pages/6-1-overview-of-managerial- decision-making Lively, R. (2020). Downsizing: What Critical Steps Do You Need to Take? Rai Resources. https://rairesources.com/4-critical-steps-when-downsizing/ Rice, D. (2021). 10 Strategies for Dealing with Layoffs. HR Exchange Network. https://www.hrexchangenetwork.com/hr-talent-management/articles/10-strategies-for- dealing-with-layoffs SHRM. (n.d.). Managing Employees in a Downsized Environment. https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/ managinginadownsizedenvironment.aspx
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