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The decision to downsize the company due to consistent losses made by the company is the only option that can secure a company from potential ruin (Karake, 1999, pp. 31). The process of downsizing should be carried out professionally using the available options that will be acceptable by the management and the company’s employees. It is critical to consider the employee’s emotions and the consequences of the retrenchment process. A company can compensate the employees with a small package or give them advanced notice before releasing them. It is always tricky to achieve a balanced ground when performing the retrenchment process, and it is thus imperative to ensure that the process is done in a legal way. This analysis will critically evaluate the best possible way of dealing with the financial crisis of WMDA for the past couple of years through downsizing.
The current situation in the West Midlands Designers and Architects Ltd. (WMDA) demands an immediate downsizing because of the business situation. The company has been making losses for the past two years, and there is a need to address the company’s problems by reducing the number of employees. There is a need to reduce four of the ten staff members using the most balanced and recommended way. The available options for the business include; last to come first to leave, Package offer for early retirement, merit selection of employees, and selection through employees decision.
These options are available for Russell to exploit in order to address the current company’s issues professionally and in a way that is acceptable. The profile of the employees provided gives an appropriate direction for the company’s actions in order to ensure a balanced discharge of employees from their duties.
Based on the available options and the employee’s details of experience, productivity, commitment, and reliability, there is an appropriate course of action that should be used by the company. The initial way, in this case, is the use of package offer for early retirement. This will be appropriate because it will be accepted by Matt and also viewed generally as an accepted way by the employees. The second option after the release of Matt is the use of merit selection; this option is very appropriate both for the company’s interest and also accepted by the company’s employees. The target here is Hiroshi, he has less commitment to the company as evident by his failures to utilize his excellent contacts with Japanese companies in favor of the company.
Simon is the other target by this option, considering the financial crisis of the company, the poor decision-making process by Simon could lead the company to more crises, and hence he should be released off his duties. This merit option will also see Donna released off her duties because of her level of talent and experience, which has not yet received any recognition from the local council despite her major building project. It will not be worth sacrificing experience and talent like the exemplary talent and experience shown by Pat, Henry, and Carla, among other employees of the company. At this financial crisis period, there is no chance to gamble with developing talent when there is adequate talent onboard. The two options will be acceptable both in the eyes of the management of the company and the workers as they clearly understand the current company’s situation.
The two options chosen to downsize the company are the best possible options of the four because of their implications both to the company and to the employees. The initial option, which is to allow early retirement with a package, will favor employees since it will be optional. The second option, which is by merit, will favor the company’s future and also acceptable by a number of the current employees. With only these two options, Russell will be able to reduce the number of employees to four and while maintaining the same efficiency, experience, and talent needed for the future of the company.
Karake, Z.,1999. Organizational downsizing, discrimination and corporate social responsibility.New York: Greenwood Publishing Group. pp.34-56.