As the world accelerates in advancements such as technology, the society is now capable of reaching greater heights in efficiency more than ever. The benefit of efficiency is not wasting any limited resources and time; however, it is not much so when business owners attempt to become more efficient by laying off their employees. In the business field, this strategy is called downsizing and it reduces the number of employees to operate the business more efficiently or especially during a crisis when the economy is unstable and the business cannot afford to maintain the current number of employees. As more and more businesses utilize downsizing, the question is, what is the impact on the
The reenergizing employees after a downsizing case study, explains the potential effects of downsizing a company, on both employees and the manager. Andrea Zuckerman is the editor in chief of Blaze and the person who must relay the message to the entire company. It is made clear throughout the case that Andrea does not agree with this downsizing and feels that it is wrong. However, due to the newspaper industry dwindling away and many people now reading the news from a mobile device, it must be done. Andrea’s biggest conflict is figuring out how to properly explain this downsizing to employees, as this is no easy task. The “new normal” that will be implemented consists of merging the five areas of reporting into either two or three. As said, explaining this situation to employees in a reasonable and understanding manner will be a complex task.
Downsizing refers to the voluntary actions on the part of organizations to reduce the overall size of their workforce, generally to reduce costs. The disadvantages of downsizing in a survey by the American Society of
The layoffs are at the heart of the problem affecting the hospital. From the CEO’s perspective, the layoffs are a response to decreased revenues where the facility has to reduce its expenses to stay in operation. In the case of the operations director, the layoffs are a cost-cutting measure and an appropriate response to reduced activity in the hospital. However, the employees are likely to interpret the situation as a lack of proper management or concern for their welfare (Sobieralski & Nordstrom, 2012).
When considering downsizing, one of the most vital questions to consider is whether downsizing will improve organizational efficiency, productivity, and performance. If so, Stonewall must then consider what practices of downsizing to implement – workforce reduction, work redesign, or systematic change (Belcourt & McBey, p. 263). If reducing the size of the workforce, things to consider are whether cuts will be either targeted or across the board, and whether the cuts will be carried out all at once or staged over a period of time. Although, downsizing strives to improve
Swatridge realizes the company is not being as efficient as they could be and downsizing is a strategy to keep costs down. Employees throughout the company are aware of this possibility and are constantly concerned about their job security. The uneasiness about not knowing whether layoffs are coming or not has younger employees worried about losing their jobs, older employees wanting to take early retirement, and skilled employees thinking about switching jobs. With the threat of downsizing looming throughout the company, employees are worried about job security, especially ones who have no other skills and would be hard for them to find a new job. There is a lack of communication between managers and workers which is affecting employee morale.
The problem in this case is L. J. Summers Company’s recently implemented cost reduction plan is causing degradation in the organization’s laissez-faire culture and has put the company at risk while challenging their competitive advantage. Furthermore, the inexperienced production manager (owner’s son, Blaine) is using his unearned power as an authoritarian leader to drive change. However, due to poor leader-follower relations, his management style is negatively influencing the synergies ultimately causing a decrease in group productivity and member satisfaction. In addition to causing turbulence between management and the employees, the cost reduction plan resulted in
The GM organization has been described as an organization with great culture crisis, the story in the study screams culture problems in the organization where employees are fired, many policy and procedures changes at without prior notice to them. Culture encompasses all the values and behaviors that constitute to a unique socialization which is a component of a healthy working environment for employees (Fullan, M. (2001). Culture greatly influences the organization 's output and performance; it as well provides better guidelines on customer care and service in addition to the concern for the environment.
When trying to maintain a healthy organizational culture the leader has many factors that he/she must balance. Maintaining a healthy organizational culture may be viewed as an entire strategic
In recent years, much attention has been given to downsizing, rightsizing, trimming the fat and other euphemisms for laying off workers. Generally, companies suggest that they are "forced" to lay off workers in order to cut costs and remain competitive. The financial community likes downsizing because it reduces the short term labor costs that companies must bear. Management likes downsizing for the same reason. This research considers the effects of downsizing and whether it is truly the panacea for a company 's ills, or whether it brings with it more problems. A specific company, Boeing, and recent downsizing decisions it has made is also considered.
A corporation needs to have a strategic plan in place in order for them to be able to implement a downsizing. There are many pros and cons to downsizing and it has a ripple effect on everyone in the corporation. Depending on the planning of the downsizing, one of the big issues to decide on is how to choose who will be terminated. For example, do you go by seniority, a percentage from all departments, an entire department, or by job level or position? These are major options that need to be addressed before anything happens. Most corporations today exist less for the well being of employees than they
The “lean and mean” organization resulting from downsizing has given way to emerging management concepts such as employee empowerment and self-managed work teams. These characteristics of the current workplace, in combination with a rise in the use of contingent labour, signify a serious cultural shift away from the traditional “pre-downsizing-era” workplace. Hierarchical, bureaucratic organizations which offered employment for life
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.
Many companies look to salaries and benefits as the first places to cut back when looking to make changes that involve cost-saving. When this happens, it is inevitable that some employees will leave the company to seek employment elsewhere. The employees that remain, whether they stay voluntarily or because they could not find employment elsewhere, are often resentful. Motivation decreases, taking job performance along with it. Employees lose their company loyalty and may even become angry enough to purposefully sabotage the company.
The downsizing of a company can affect employees before, during and after it occurs. Employees usually know of a possible downsizing, care of the almighty grapevine, months before it is supposed to happen. Thus, employees may become paranoid and self-absorbed, and their top priority is their own career rather than the bottom line of their employer. This causes them to be unfocused and prevents them from performing their jobs efficiently. Many workers would also be perfectly willing to stab their peers in the back in hopes of keeping their job. Usually when a downsizing is complete, the company is at an all-time low. This is due to the fact that in almost every merger, acquisition or downsize, employees are faced with uncertainty about their jobs before and after the restructure. After a large percentage of downsizes, ten percent of the remaining workforce will easily adapt to the change, while another ten percent will never adapt. Workers who survive the downsize often have feelings of anger, fear or distrust. Further internal problems result from employees who survive with the company, but cannot adapt to their new settings and expectations, and eventually quit their job.