The firm is carrying out the process of downsizing. Downsizing involves the reduction of the labour force. This process may involve temporary suspension or conclusive termination of an employment contract for business and strategic reasons (Cummings and Worley, 2014, p. 359). The management prefers downsizing as one of the turn-around strategies for a declining organization. The senior management also pursues layoff in a bid to cut costs and achieve labour effectiveness and efficiency. Downsizing has become vital for the firm under consideration due to the following reasons. First, the organization has been experiencing low activity and rising labour costs. Secondly, the company’s revenues and profits have sunk, probably due to the shooting wages. Hence, the firm should consider laying-off part of its workforce. Downsizing will create a lean and efficient labour force (Cummings and Worley, 2014, p. 359).
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Downsizing is a two-pronged strategy. It may make or break an organization. Its success is dependent on how the implementation process is thoughtful, conscious, and participatory. If the process is carried out in a hasty and unsystematic manner, it may create an atmosphere of perplex and defensiveness as the survivors identify with those who have been severed from the firm. Redundancy may also hurt the morale of the workers in the period before its implementation.
Also, this strategy will increase the responsibilities held by the surviving workers in the affected departments (Cummings and Worley, 2014, p. 360). Despite these negative consequences of laying-off, the affected departments will register a substantial decrease in labour costs. Labour efficiency will also be achieved in the areas where the labour force will be reduced. For instance, the surviving employees can better use the available working space and machinery.
Planning for a redundancy strategy is very fundamental to its success (Cummings and Worley, 2014, p. 360). The planning process should start early and should actively involve all the affected units. The departmental managers have to plan for the event bearing in mind that employees are one of the valuable assets of the firm. The managers have to ensure that the downsizing process is equitable and free of favoritism. The supervisors should make prior arrangements for carrying out the layoff process in privacy. They should identify suitable reasons for discharging an employee and consider being kind and respectful.
The management should be careful to plan on how to deal with the transition period after the implementation of the downsizing strategy. This will shield the firm against the development of a degenerative environment. The supervisors and departmental heads should hold frequent information exchange meetings with the survivors to empower them to deal with the change effectively. Such communication meetings will diminish grieving and fears about being the next victims. The workers should be left to verbalize their concerns among themselves and to the management without fear. Indeed, the management should create group sessions and open communication forums to address the feelings of the surviving employees. Team building is also vital in the post layoff era. The supervisors and managers should consider forming new work teams to ensure the efficiency of the surviving labor force.
The supervisors and managers also need to be aware of the necessity to look into the needs of workers who are made redundant. Bearing in mind the negative effects occasioned by being fired, the supervisors and managers should develop ways of aiding workers who are made redundant. The management should organize for family, personal and outplacement counseling, relocation services, severance packages, and support them in finding a new placement. These services will aid the redundant worker in transiting.
The case under consideration requires a tactical decision. Tactical decisions are essential for the achievement of strategic decisions. A tactical decision involves the determination of what is necessary for the achievement of the organization’s goal. A tactical decision is made by midlevel management in collaboration with senior management. The firm has chosen to layoff its workforce in a bid to bring down costs and increase profits. The middle-level management, comprising of supervisors and divisional managers, should identify tactics of achieving the strategic goal set by senior management. The supervisors and divisional managers are expected to plan for the layoff and address the needs of the survivors and victims.
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Decisions are made in contexts characterized by organizational, technical, information, legal, social, and psychological challenges. Decision making challenges present barriers to change and can degenerate to problems. An organization’s structure determines its responsiveness to change, including downsizing. The availability of information on human resources is fundamental in planning a layoff. Lack of real-time information may slow down the process of downsizing.
Employees’ attitudes also present a major challenge in the implementation of a layoff strategy. A firm’s ability to align the surviving workers’ attitudes towards its goals determines the success or failure of a layoff strategy. Strategic and tactical decisions also present legal challenges. For example, unfairness in the layoff process can lead to protracted court cases between the employer and the employee. Indeed, decisions should be made after careful consideration is made to the perspectives involved.
Cummings, T., and Worley, C. (2014). Organization development and change. Stamford, CT: Cengage Learning. Web.