Professional Documents
Culture Documents
Group Members:
1- Abdul Quoduos Rahimi
2- Vankadara Venkata Vaibhav
3- Anushka Singh
4- Kashish Bansal
5- Shreya Gupta
Roll No:
A-21
A-22
A-23
A-24
A-25
Contents
Introduction to case
Types of downsizing
Reason for downsizing
Downsizing and HR system
Effects of downsizing
Case Summary
Questions and Answers
Suggestions
Introduction to
Downsizing refers to the process of reducing the overall size and operation cost of
a company most directly through a reduction in the total number of employees.
when the market is tight, downsizing is extremely common when the company
fight to survive in a hostile climate while competing with other companies in the
same sector.
There are several reason to engage in downsizing. The primary reason is to make
daily operation of a business more efficient.
The secondary reason for downsizing is technology improvements that allow fewer
workers to do the same amount of work.
Downsizing is intend to be permanent and downscaling and layoff is intend to be
temporary in which the employees may in later rehire.
Economic Crisis
Change in Management
Case Summary
As the largest employer in Ouachita country, Arkansas, International Forest Products
Company (IFP) is an important part of the local economy.
Scott Wheeler, the human resource director at IFP, tells of a
difficult decision he once had
to make. According to Scott, everything was going along
pretty well despite the economic recession , but he knew that sooner or later the company
would effected. I got the word at private meeting with president, Janet Deason, that we
would have to cut the workforce by 30 % on a crash basis.
First, I thought about how the union would react. Certainly, workers would have to be let go
in order of seniority. The union try to protect as many jobs as possible. I also knew that all of
management's actions during this period would be intensely scrutinized. We had to make
sure that we had our act together.
Then there was the impact on the surrounding community to consider. The economy of
Ouachita country had not been in good shape recently. Aside from the influence on the
individual workers who were laid off I knew that our cutbacks would further depress the
areas economy and there would be a number of government officials and civic leaders who
would want to know how we were trying to minimize the harm done to the public in the area.
Continue
We really had no choice but to make the cuts, I believed. First of all, I had no choice because
Ms. Deason said we were going to do it. Also, I had recently read a news account that one of
the competitors, Johns Manville Corporation in west Monre, Louisiana, had laid off several
hundred workers in a cost-cutting move. To keep our sales from being further depressed,
we had to ensure that our costs were just a low as those of our competitors. The wood
products market is very competitive and a cost advantage of even 2-3 % would allow
competitors to take many of our customers.
Finally a major reason for the cutbacks was to protect the interest of our shareholders.
Certain antipollution n changes. In general , though, the share holders seem to be more
concerned with the return o their investments than with social responsibility.
At our meeting, the president reminded me that, just like every other manager in the
company, I should place the shareholders interests above all else I really was quite
overwhelmed as I began to work up a human resource plan that would balance all of these
conflicting interests.
Suggestions
1)
The best way for the company was to identify those workers who voluntary want to
retired and those who are in seniority age should be retired it is a good way to
downsize the employees in an organization.
2)
The organization should not make focus on government from the future action taken
by the government.
3)
As the human resource director the main focus should not be on interest of the
company they should focus on social responsibility.
4)
Instead of laying off and turning them out of the job the company can cut the bonus
promotion , salary and extra charges.
5)
When an employee is recruited in a company the company should open an accoun for
pension for retirement .