Report On Organizational Downsizing - Challenges And Strategies

Description of the situation/event

Choose a public event or issue that has happened relatively recently. This could be an issue, an announcement (internal or external) or an event.

Write this as a report to an organisational board and include:

– Description of the situation/event
– The challenges facing the organisation
– The stakeholders affected and their likely responses
– The objective that the organisation wanted to achieve
– The communication theories that you think were used to develop a strategy
– An explanation of how the strategy related to these theories
– Recommendations for going forward

Unfortunately, downsizing in most organizations is necessary in some cases. This, however, does not mean that the process is not faced by difficulties and other challenges. Downsizing leads to the introduction of a lot of challenges and changes in the organization (Noer, 2009). Employees, who remain, for instance, are bound to be faced with insecurities for their jobs, as well as discomfort due to the experiences they have just been exposed to base on the exercise (Mayfield et al. 2015). It is highly natural for all employees to feel insecure after downsizing takes place in the entity. Most are bound to miss their co-workers once they have been detached from the entity, while others may face future fears of being cut off as well (Brokner, 2008). Organizations have to, therefore, acknowledge that corporate downsizing leads to high level of stress among personnel, and in some cases, may be a cause of conflicts between employees leaving within departments. The podded company recently announced its intention to undertake to downsize, as a result of the basic challenges facing the enterprise, both resource wise and the financial aspect of the organization (Driscoll, 2018). The event was announced through internal memos in the organization functional units, with the message intended to reach all personnel and internal stakeholders within Podded Corporation.

Downsizing in every organization is not regarded as a pleasant task (Weiss, 2010). Everyone is affected in one way or the other when any organization decides to cut down the number of its workers. However, basic problems faced by the organization influence such a decision, which results to complete restructuring and a change of duties for the majority of the employees. Much deliberation is made before downsizing is considered the best strategy in the organization (Driscoll, 2018). Major problems facing Podded Corporation, making it result in the announcement of downsizing in the entity include;

The challenges facing the organization

High costs incurred

The organization has to deal with payment of extremely high wages as a result of the number of employees. Employee payroll is considered a liability to the organization, which highly reduces the equity of the owner (Driscoll, 2018). Therefore, eliminating some of this liability is considered a way of solving the problem of high costs incurred, which in turn, suppress the level of profitability in the organization.

Reduced productivity

The organization has decided to look into corporate downsizing for the purpose of boosting productivity in the functional units (Greenberg & Baron, 2013). The entity has, therefore; taken up the initiative to rotate workers, and replace others with sophisticated equipment and technology for the sake of enhanced productivity in the workplace (Driscoll, 2018). The lack of technology in the organization is a challenge, which in turn, leads to decreased quality. In order to deal with this problem, downsizing and replacement of human resource in some units with sophisticated technology will boost overall productivity in the entity.

Executives

Executives in the organization ought to be warned earlier, in order to make preparations. In this case, the executives need to know what to say to the employees and realize that their actions will have an impact on the company financials and the brand of the organization (Driscoll, 2018).

Human resources

The human resource team in the organization should be able to answer all the questions about the benefits offered by the organization (Fisher, 2011). These include; outplacement, planning and financial aspects of the organization. Serious inquiries such as the mental health of the organization's financials cannot be shunned, especially in the stress-related issues that come along with downsizing.

Coworkers

After the announcement of layoffs has been made, coworkers and all other employees are bound to work in a tense atmosphere thereafter (Driscoll, 2018). The job security of every employee is threatened, and employees might not be generally productive as expected. Therefore, it is important for the surviving coworkers in the organization to be extremely sensitive to those affected by the event (Gibbons & Katz, 2011). It is also important for them to communicate about the process to those provided with layoff notifications, considering the changed work processes, data and pending projects.

Notification giver

In such a scenario, the management, or any other individuals mandated to provide the news about the event to all internal parties in the organization needs to be fully aware of how to convey the message (Driscoll, 2018). There is also a need to know how to handle the different responses which are bound to result from the scenario.

The stakeholders affected and their likely responses

External vendors

All internal executives at Podded Company need to have a discussion with the external vendors to the entity and describe how the event will impact the processes between the different parties (Weiss, 2014).  The external vendors will, in this case, be required to work with those exiting, in order to find new contact persons for the purpose of upholding the organization-vendor relationships (Bowe et al. 2014).

The objective that the organization wanted to achieve

The organization had two motives when making the announcement on the internal event which would be undertaken at Podded Company. First, downsizing is a signal that the entity was looking into restructuring all systems, and that change ought to be embraced (Driscoll, 2018). The changes were meant to increase the profitability of the organization. On the other hand, shareholder support was also advocated for, considering the advantage of increased profitability resulting from the reduction in the payroll figures. This way, the value of the stock of the company will be increased. This way, Podded Corporation would get more investors on board, hence increasing equity and overall shareholdings within a short time.

The perceived value would be boosted, which was a major objective (Miller, 2014). The organization was also hoping to achieve effective outsourcing, through cutting a number of employees. Companies in most cases, overextend themselves when it comes to the types of services which are offered to the market. Through downsizing, more focus will be directed towards products and services the organization offers, rather than focusing on an extensive range of activities including production, distribution, recruitment, and selection among others (Driscoll, 2018). Therefore, a decrease in the number of personnel was necessary for Podded Company. This generally, is a chance to boost productivity and also reduce costs incurred, which were also objectives in taking up this strategy.

The communication theories that you think were used to develop a strategy

Communication is the most critical aspect of organizations, and cannot be shunned (Driscoll, 2018). Communication strategies and pathways were chosen in the organization determine the overall culture in the entity. Efficiency styles need to, therefore, be developed for the purpose of flexible operational effectiveness, information theory has been relied on for the purpose of developing strategies related to the event in question, which is downsizing at Podded Corporation (Everse, 2011). The theory focuses a lot on how information travels from one point to another in the organization, with minimal mistakes. Information theory focuses on how management can be able to fix messages so that they reach the recipients on time, in a proper manner, and while at the same time, working on a contingency plan in case of any negative reactions from stakeholders.

The objective that the organization wanted to achieve

The communication theory is meant to help in fostering accountability, understanding, and consistency despite the situational hand (Driscoll, 2018). The postpositive theory of communication is also linked to the communication theory. This theory recognizes that misunderstandings and conflicts are inevitable in organizations. The aspect of downsizing in this case is bound to bring about negative reactions. Therefore, messages relayed to stakeholders under this theory should be designed to ensure that people continue working together, smoothly and in harmony with the organization (Driscoll, 2018).  Agreements need to also be met, to avoid instances of reluctance.

An explanation of how the strategy related to these theories

Focusing on the communication theory, all personnel who were affected by the layoffs were reached out to, and the responses determined beforehand (Driscoll, 2018). This way, it is much easier for the management to cover all loopholes, and deal with subsequent effects of the internal event. The postpositive theory is also related to the strategy in the organization. The theory is meant to ensure that order prevails in the organization, despite the issues at hand. At the same time, the postpositive theory helps to survive employees to have work morale and not to be discouraged as a result of their job insecurities and events that may have recently unfolded (Driscoll, 2018).

Recommendations for going forward

Work processes at Podded Company are bound to change, especially where layoffs are involved. Employees will be required to overstretch and do more, with less (Driscoll, 2018). Other roles and responsibilities will be taken up, in order to keep the organization functioning more effectively. The organization culture is also likely to be harmed, which should be considered. Therefore, there is a need to ensure that leaders help personnel deal with the experience. Employee motivation should be prioritized. Rewards should be offered to the surviving personnel for their good work (Driscoll, 2018). At the same time, remuneration should also be boosted, to enhance motivation. Management should also demonstrate sincere sympathy for the remaining group, recognize the powerful impact of their actions, focus on positive actions, and meet will small personnel groups for consistent debriefs (Fieldstein, 2016).

List of References

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understanding in a global world. Cambridge University Press.

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Everse, G. 2011. Eight Ways to Communicate Your Strategy More Effectively. Harvard Business

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Fisher, D. 2011. Communication in organizations (pp. 228-9). St. Paul: West Publishing  Company.

Feldstein, M., 2016. Temporary layoffs in the theory of unemployment. Journal of political economy, 84(5), pp.937-957.

Gibbons, R. and Katz, L.F., 2011. Layoffs and lemons. Journal of labor Economics, 9(4), pp.351-380.

Greenberg, J., & Baron, R. A. 2013. Behavior in organizations: Understanding and managing

the human side of work. Pearson College Division.

Mayfield, J., Mayfield, M. and Sharbrough III, W.C., 2015. Strategic vision and values in top

leaders’ communications: Motivating language at a higher level. International Journal of

Business Communication, 52(1), pp.97-121.

Miller, G. A. (2014). Psychology, language and levels of communication. Human

communication: theoretical explorations, ed. by A. Silverstein, 1-17. New York: J.

Noer, D.M., 2009. Healing the wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations. John Wiley and Sons.

Professor Sue Driscoll. 2018. STC3CTA Week 1-6 lectures

Weiss, A., 2010. Job queues and layoffs in labor markets with flexible wages. Journal of Political economy, 88(3), pp.526-538.

Weiss, A., 2014. Efficiency wages: Models of unemployment, layoffs, and wage dispersion. Princeton University Press.