Case Study

692 Words Feb 3rd, 2015 3 Pages
DOWNSIZING: SAVING MONEY WHILE REMAINING ETHICAL
Downsizing has become a commonplace strategy for organizations to adopt in an effort to cut costs, eliminate redundancies, and streamline organizational systems. Over the last 15 years, many organizations have engaged in downsizing more than once. Most companies have learned from the mistakes of the past, but some companies are still trying to use the same tactics today that were used in the mid 1980s, that leave employees reeling.
Read the scenarios below describing two different approaches to downsizing. Analyze the downsizing practices utilized by each company, explain which activities/practices you believe would have been both effective and ineffective, and explain why. If you could
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Severance pay was provided to those employees not matched to vacant positions. In other words, if the company offered an employee a comparable position (even one involving a transfer) and the employee refused the new job, no severance benefits were paid. Relocation packages were provided in the case of job transfers. Finally, the organization offered outplacement services to displaced workers.
Company B

The reorganization of Company B (a small restaurant chain, with 13 locations) resulted in the loss of 30 jobs. The corporate management decided to put several restaurants up for sale, in an effort to refocus the organization's emphasis onto a particular area of the country. One particular restaurant was sold on April 30, 1999. The company did not inform the employee that the restaurant had been sold. Operations ceased on May 16, 1999. Corporate management came to the restaurant location to hold a staff meeting on May 17, 1999 (a Monday, which is a day on which the restaurant was always closed), and notified employees that the preceding day had been their last day of employment for the restaurant. Employees who wanted to continue to work for the restaurant were asked to assist in a one-day packing workday, after which they would be let go permanently.
II. Internet Exercise www.merck.com Sixty years ago, the first package of brown powder called Penicillin left the Merck Lab for a

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