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PESTAL Analysis of Government of Alberta

Discuss about the Downsizing Implementation and Financial.

Marita Smith, victim of the case study, works as a clerk in a government department. This department is facing the problem of downsizing. Sometimes having more number of employees working under an organization than that of required at that particular time. In such cases organization has to make some really difficult decision regarding restructuring the organization in terms of human resource management (Datta, Guthrie, Basuil, & Pandey, 2010). To overcome such issues human resource management has to perform organization downsizing process. In this process organization terminate its employees who are not so worthy to have them in the organization. This downsizing affects for the victims as well as the survivors (Small, et al, 2014). Victims are those who involuntarily lose their job and survivors are those who have to bear the extra workload of terminated employees (Bhuvaneswari, et al, 2011). In this case Marita is the victim as she has to leave her job because of the department downsizing.

External and internal factors that may influence an organization and its operations can be analysed with the help of PESTAL analysis of that particular organization (Snider, da Silveira, & Balakrishnan, 2009). In the given scenario Alberta, Canada Government is the organization that is undergoing the downsizing of its several departments (Fertel, Bahn, Vaillancourt, & Waaub, 2013). In this context the PESTAL analysis of the Alberta government is done as following

Political aspects: Country has a multi-party system that requires a strong co-operation between parties to maintain the government operation effective and more efficient. Lack of co-operation between these parties will lead the employment sector to a mismanagement of governments departments in terms of its recruitment and selection process for different posts (Babiak, & Wolfe, 2009).

Economic aspects: Canada is one of the wealthiest nation and showing a less increment in the inflation rate in the last few years. Service sector of the country contributes around 70% of the total GDP which employs more than 75% of the total population (Frue, 2016).

Social aspects: In 2000, average family income of the country was $66,160. Around 40-50% of total population falls in the middle category. This shows that the country has to improve its employment policies to provide more jobs.

Technical aspects: Technical environment of the country is changing rapidly by the combined efforts of government and other global technical leaders in the field of communication and technology. This enhances the government operation to make termination of some of the employees from different department to overcome the economic burden over the government (Dobuzinskis, & Howlett, 2018).

SWOT Analysis

Legal aspects: Country’s legal system has its roots from the British common law system. Structure of the legal system consists of two major laws that are common law and civil law. These laws are used to provide better legal judgments to the people of Canada.

SWOT analysis shows the key factor of an organization that influences the organization management operations in respective manner. Strengths, Weaknesses, Opportunities, and Threats of the Canadian government are analysed as following.


·       Entrepreneurial support: Government of Canada supports entrepreneurships. With several avenue tax breaks and tax reductions entrepreneurs feel confident in Canada.

·       Niche market growth: Canadian government has seen an increase in the exports in the niche market of the counry.

·       Close to America: Being the eighbour of America, Canada has benefits of substantial trade surplus.


·       Dependency on US: Although closeness of Canada to the US serves several trading benefits, this closeness can turn into dependency as a weakness for the country.

·       Fluctuating Canadian dollar: In theh recent year Canadian dollar has been up and down more frequently that can be a weakness for the country.


·       Emerging market: Canada having a big exporting market has an opportunity of exporting to the international market.


·       Closing of the stores: Low value of Canadian dollar in international market has threatened the future and livelihood of many stores in the country.

·       Lonnie connected to the oil: It has been observed that Canadian dollar has a correlation with oil prices in international market but in the recent time dropped oil price in international market has threatened the Canadian dollar as well.

When an organization faces some tough times for the business purpose owners mostly opt for the cost-cutting operation to make business profitable in such tough times. In the recent few years Canadian government digitalizing its operating departments that is resulting in downsizing in most of the department (Maertz, Wiley, LeRouge, & Campion, 2010). Some of the key issues HRM facing in the recent times in Alberta government are as following

  • Constant GDP growth in the last few years
  • Involvement of technology in various operation of the government departments
  • Digitalization of various departments

These issues are needed to bring in light as in the current scenario government downsizing in several departments. Employees are facing involuntary loss of their jobs. They need to understand the reason behind such act of the government implementing in many departments including the government department, the given victim Matrina was working in for the last five years. Such operations of the HRM in govt. departments are affecting people serving the government honestly with their hard work.

One of the significant areas considered in the employment laws defined in the Canada is termination of the employees. This termination of employees is of two types as termination without any specified reason and termination for a specific cause. Under the consideration of termination of employees for a specific cause there are certain laws that can be defined as following

  • There is no employment “at will” in the Canadian legislation.
  • Employers cannot terminate employees for any type of conduct issue.
  • In all but most serious misconduct of the employee in only one incident does not allow termination of employees for their misconduct (McMillan, 2018).

In the given case scenario Merita was facing the situation of termination for a cause. The reason of her termination is the on-going downsizing of the department she is working in. For this type of termination legislation has a provision of giving preference to the terminated employees for any other desirable post in the same organization.

Downsizing in an organization should be the last and extreme step to be taken for restructuring the organization in terms of human resources (Sitlington, & Marshall, 2011). There are so many alternatives of downsizing which are resting on two major pillars called share the pain and strong human resource initiatives. In order to avoid downsizing there are many long-term staffing alternatives (Muñoz-Bullon, & Sanchez-Bueno, 2010). Some of these effective alternatives are as following

Issues Faced by HRM

Hiring linked to the vision of the organization: This alternative defines that organization should identify that what kind of skills it will need in the future. Therefore, during the process of recruitment and selection organization must consider these requirements to be fulfilled by the selected candidates. This will prevent such type of downsizing which are results of technical advancement introduction to the organization.

Cross training for development: By understanding the need of skill mix staff candidates and linking this consideration to the anticipated skills required in the future , organization must allow the employee to determine what skills they need to develop to be the gainful employee in the organization for a longer time period.

Redeployment within the organization: Redeployment of the organization can be linked to the alternative placement but this placement can be seen often within the organization a sophisticated career management process is required to implement successful redeployment so that managers as well as employees can be made aware of the open position ( 2009).

These alternatives can solve the problem up to an extent. Hiring linked candidates will ensure the recruitment and selection of the candidates who are eligible for such technical changes in the organization. This will prevent termination of employees only because of the digitalization in the department. Cross training of the employees will also help the organization to use their employees more efficiently without terminating them as this training will develop employees to work with more flexibility and make use of the existing employees. Redeployment will also help organization to redeploy their employees to avoid such downsizing (Cascio, 2010).

Organization facing such type of downsizing because of lack of technical knowledge in the employees must use some effective alternative ways to avoid such situations. There are so many alternatives that can be used for the purpose of satisfying the employees with a long term employment to them. Among all these alternatives “hiring linked to the vision” is the best alternative. This alternative requires a strategic recruitment and selection process to be followed by the human resource management of the organization. in this case government shoud consider such strategic changes in their recruitment and selection processes while recruiting candidate in any of the department which may experience such technical enhancement in the future. This strategic change in the process of recruitment and selection will help the government to avoid such situation where employees challenge the organization for their legal right violation.

Alternatives to Downsizing

This process of implementing strategic recruitment and selection process will require only a few changes in the pre-existing process like

  • Provision of separate HRM department
  • Strategic implementation of the strategies designed by the HR managers
  • HR managers are needed to redesign their interview pattern including new question which are specifically related to the skills that are organization is looking for in the desired candidates.

This alternative for such situations will surely make it to the employers to keep their employees for a longer time period. Such initiative increase market image of the organization and help them to attract desired talented candidates for the further recruitment and selection process for the organization. the success of ssuch implementation can be measured through the organization performance enhancement as the loger time employment will motivate employees to be the part of such organization and they will work had to be that part of the organization. Therefore, Number of application organization receives in the future recruitment and selection process will measure the success of this alternative.


The above analysis of the report concludes that the environment of an organization influences the recruitment and selection process as well as other HRM activities of the organization. These activities are important to deal with several tough situations an organization may face at times. The alternatives suggested in the report are effective and can be used to avoid situation similar to the given case. These alternatives require only a few extra efforts that may change the complete scenario with a positive impact on the organization and its performance as well.


Babiak, K., & Wolfe, R. (2009). Determinants of corporate social responsibility in professional sport: Internal and external factors. Journal of sport management, 23(6), 717-742.

Bhuvaneswari, K., Fields, P. G., White, N. D., Sarkar, A. K., Singh, C. B., & Jayas, D. S. (2011). Image analysis for detecting insect fragments in semolina. Journal of Stored Products Research, 47(1), 20-24.

Cascio, W. F. (2010). Downsizing and redundancy. The Sage handbook of human resource management, 334-346.

Datta, D. K., Guthrie, J. P., Basuil, D., & Pandey, A. (2010). Causes and effects of employee downsizing: A review and synthesis. Journal of Management, 36(1), 281-348.

Dobuzinskis, L., & Howlett, M. (Eds.). (2018). Policy analysis in Canada. Policy Press.

Fertel, C., Bahn, O., Vaillancourt, K., & Waaub, J. P. (2013). Canadian energy and climate policies: A SWOT analysis in search of federal/provincial coherence. Energy Policy, 63, 1139-1150.

Frue, K. (2016). SWOT analysis of Canada. Retrieved from (2009). Alternatives to downsizing. Retrieved from

Maertz, C. P., Wiley, J. W., LeRouge, C., & Campion, M. A. (2010). Downsizing effects on survivors: Layoffs, offshoring, and outsourcing. Industrial Relations: A Journal of Economy and Society, 49(2), 275-285.

McMillan, (2018). Employment laws in Canada: Provincially regulated employers. Retrieved from

Muñoz-Bullon, F., & Sanchez-Bueno, M. J. (2010). Downsizing implementation and financial performance. Management Decision, 48(8), 1181-1197.

Sitlington, H., & Marshall, V. (2011). Do downsizing decisions affect organisational knowledge and performance?. Management Decision, 49(1), 116-129.

Small, H. J., Meyer, G. R., Stentiford, G. D., Dunham, J. S., Bateman, K., & Shields, J. D. (2014). Ameson metacarcini sp. nov.(Microsporidia) infecting the muscles of Dungeness crabs Metacarcinus magister from British Columbia, Canada. Diseases of aquatic organisms, 110(3), 213-225.

Snider, B., da Silveira, G. J., & Balakrishnan, J. (2009). ERP implementation at SMEs: analysis of five Canadian cases. International Journal of Operations & Production Management, 29(1), 4-29.

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