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Reorganization and Layoff- Issue and Problem Identification, Essay Example

Pages: 3

Words: 948

Essay

Summarize the Issue

The issue that arises for companies going through the process of re-organization and layoffs involves potentially unavoidable adverse reactions that can defeat the primary objective of implementing the strategy in the first place. When the economy is down, in order to remain competitive within the market place, it is necessary for companies to cut costs, and in many cases this means laying-off workers. The GE Transportation article shows how layoffs can be inevitable despite some alternative options for cutting costs, and it also demonstrates the negative impact external forces can have on the company’s decision making process. The article mentions that prior to making the layoffs, GE Transportation tried to negotiate alternative measures but in the end the company was unsuccessful. In her article on how layoffs can be mismanaged, Brenda Bouw’s expands on the issue by focusing on the internal impact layoffs can have on remaining staff long after other employees have been dismissed. Both articles reveal the real issue companies face when reorganizing and cutting employees is that the negative consequences can far outweigh the positive benefits.

Identify the Problem

The real problem is not the necessity for companies to cut costs, but the intangible factors that can ultimately decrease a company’s productivity if they do not handle the reorganization process with caution. Both articles make the point that in some cases layoffs are unavoidable. However in Brenda Bouw’s article, she talks about the devastating consequences of mismanaging layoffs, and identifies one form of mismanagement as assuming layoffs need to be made just to show stakeholders costs are being cut when alternative measures would be highly more effective and necessary. Bouw points out the way managers choose to deal with the employees they are cutting can have a significant impact on the morale of the employees they keep long after the re-organization process has finalized. The problem is the chosen approach to reorganization, and most importantly the way that chosen approach is handled when it involves employee layoffs.

Why this is the underlying problem?

The reason the method through which the reorganization process, is executed is the real underlying problem is because it has the most long term impact. The primary reason why companies consider cutting employees is because they need to reduce costs but this does not necessarily mean their only option for cutting costs is to layoff employees. Since firing employees can have both external and internal consequences that can impact production, companies must take careful consideration when evaluating the advantages and disadvantage to their chosen reorganization approach.

Group collaboration process in defining the problem

The Collaborative problem solving process involves negotiation. In the GE transportation case, Jim Martin notes that there were failed lobbying and negotiation attempts which resulted in the need to layoff over 1,000 jobs. The collaborative, or negotiation, efforts he is referring to primarily entailed the interactions between management and potential retirees. It also refers to collaborations with Rapid Response groups and the Labor Department to mitigate the negative impact of unemployment on those the company is obligated to layoff. The focus of these collaborative efforts reveals that the company identifies, and defines, the real problem to be the potential individual consequences endured by the layoff group and not how the company’s actions would be perceived by other stakeholders. For GE Transportation focusing solely on employee layoffs as the solution to their problem was a mistake, because they did not take into consideration how their approach to handling layoffs would impact the corporate culture or employee morale of their remaining staff. They collaborated with the Labor Department, Rapid Response groups, senior employees near retirement, but the article made no mention of collaborations with any other parties.

How a clearly defined problem can help find solutions

In addressing the conflicts that arise within the re-organization and layoff process, one could easily identify the problem to only be the need to cut costs, or just the need to assist employees with their transition to find future work, or just the obligation for companies to be transparent in the process. The truth is that all of these problems tie into the core issue which is the necessity for companies to handle reorganization and layoffs effectively. Once the problem is clearly defined, focus can be placed on the criteria necessary to create the best environment for an efficient reorganization process. For example, the GE Transportation article mentioned that the company attempted to negotiate with employees who were near retirement, knowing that every employee that chose to take an early retirement would save a job. The article also mentioned how the company collaborated with Rapid Response Groups and the Labor Department in an attempt to reduce the impact layoffs would have on the employees they let go. What the article did not mention however was how transparent the company was with their employees about this process, or how much time company invested in finding alternative ways to cut costs independent of their employee based options. These were two primary steps mentioned in Brenda Bouw’s article that she noted could help companies avoid mismanaging layoffs. If GE clearly defined their problem as a necessity to reduce the impact of the layoff and reorganization process as a whole, it would immediately open of collaborative dialogues between all parties involved about the best solution, long before it’s too late. A prime example that GE probably did not define the problem clearly can be seen in the fact that they attempted negotiations but ultimately these negotiations were not effective in preventing the outcome they were trying to avoid.

References

Bouw, B. (2013). Mismanaged layoffs can go ‘horribly wrong’. The Globe and Mail, Toronto.

Martin, J. (2013). Layoff plan moves forward at the GE transportation. Tribune Business News, Washington.

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