1. Each and every business organizations aims at earning the maximum possible pr
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Question
1. Each and every business organizations aims at earning the maximum possible profit by generating the maximum amount of revenue. In each organization a bad phase is very much normal and the management formulates different ways and strategies in order to tackle the situation. It can be stated that in this context Intel believed that layoff is the option and has eliminated more than 10000 jobs and as a result huge number of employees were terminated. I believe that in order to survive and sustain in the industry, layoffs become necessary sometimes and a healthy attrition is expected but adopting the quantitative approach I will prefer layoffs based on the performance of the unit and also the individual performance of the employees, terminating an employee because the unit is not doing good is not at all fair and if this goes on employees will lose the feeling of trust and security from the organization.
2. The approach is quite logical because when the objective is to make the business successful and profitable it has to adopt few strategies which may seem harsh and unfair for some but it is been done for the betterment of the business. The business is not a non profit organization neither it is a social community so if revenue is the parameter then the decision may seen perfect, but this activity will change the mindset people were having about the organization. A person works in an organization not just for the salary he earns but he also expects security from the organization which is absolutely fine and valid, due to this layoff incident a major section of people will think twice before joining intel in the near future because they think that at times of recession the organization will not think about its employees.
3. As already mentioned the quantitative approach adopted by Intel may seem a bit unfair because intel analyzed the results of all the departments and depending on the performance of the unit, the layoff was done. Managers and mid level management employees were the primary target but this type of layoff may seem unfair because there are employees and also managers who have performed well individually but their unit has failed and their termination is a loss for the organization. It is true that the organization is going through a bad phase but the organization should understand that this is not going to last long and plan accordingly. If the layoffs are low resulting in lower margin of profit may turn out to fruitful and successful in the future.
4. There has been retraining, reskilling and redeployment of employees in different departments and units and there are employees who are complaining about the fact that they are doing something for which they were not hired and I feel that it is very much obvious and normal. On one hand it is the responsibility of the organization to educate the employees about the turmoil situation in the industry and should also vocally assure that once the situation is back to normal or close to normal the employees will be driven back to their actual work area. On the other hand the employees should also understand that there are various employees who have lost their job because of this recession and the organization is not in a good shape so it would be better if instead of complaining cooperation is provided which will help making things better for both.
5. The company's approach should be such that the short term goals are achieved and in the process the way to achieve the long term goals become convenient and better. Maintaining a positive work environment is a basic expectation from the organization because if the young employees who have just joined the organization and started their career feel that the organization they dreamt of working in is not doing well then this will have a huge impact on the employees and the organization. The mid management level, Senior management level and the executive level should be aware of the situation but they should not highlight this in front of the new joiners and junior employees.
If the organization is unable to provide security then maintaining a positive work environment is really challenging but the team of managers and senior managers should cooperate so that this menace is avoided.
6. There are other ways to control and reduce the expense and increase the margin. The most important are mentioned below:
I believe that if there is a will to survive, an organization can an idea needs to be there and has to be implemented wisely.
Explanation / Answer
Leadership: Change and Organizational Learning (Is There an Ethical Way to Implement Downsizing without Hurting Your Best Employees?) Intel has restructured and eliminated about 10,500 jobs during the past 20 months. The company decided to make these cuts owing to declining revenue and market share. Intel used a quantitative approach in making the cuts. That is, the company studied workforce demographics and determined what areas were most in need of cuts and then reassigned people based on where they might best contribute to the company's future plans. The managerial ranks were reduced the most. Corporate executives are pleased with the process because the company is now more profitable and competitive. In contrast, some employees believe that the company "botched the restructuring in ways that have harmed morale, employee development, and long-term leadership quality." Interviews with employees uncovered complaints that "Intel disregarded employees' passions in reorganizing, squandered the talents of HR specialists and unwisely shifted leadership training efforts from lower-level managers to upper-level executives." Disgruntled employees believe that Intel did not consider employees' interests during the restructuring. An internal memo obtained by Workforce Management indicated that senior management knew they would be losing quality employees. The memo states: "We know we are losing good people in this move. But we have too many managers, and this manager reduction is necessary to improve our decision making and communication and to resize the company. In addition, since we need to become a leaner company and are limiting job openings, redeploying their skills, as individual contributors or as managers, is not a reasonable option."
Solving the Dilemma: The following ‘areas of concern’ are provided to help stimulate your thinking and should be included in your analysis of this case. They are not intended to provide a list of questions to answer.
1. How Would You Have Handled the Layoffs at Intel? (1 Paragraph)
2. Intel's approach sounds logical to me. Revenues are up, and the company just unveiled a new processing chip that Time called the best invention of the year. You can't make everyone happy when you let go more than 10,000 people. (1 Paragraph)
3. Downsizing solely by the numbers is bad. Management should have accommodated employees' passions and interests when restructuring even if it resulted in fewer cuts than desired. In the long run, this will lead to higher employee satisfaction and performance. (1-3 Paragraph)
4. It sounds like the criticisms are being leveled by people who don't like their new assignments. They should quit complaining and be happy they are still employed. (1 -2 Paragraph)
5. I am not sure that there is an optimum approach. It is impossible to balance the short-term goal of reducing costs while maintaining a positive work environment in which people are doing the type of work they are passionate about. (1 - 3 Paragraph)
6.Invent other interpretations or options. Discuss. MOST IMPORTANT Provide 3 - 4 Options. (1 - 4 Paragraph)
(Reference: MSC102 Ch 16)
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