Case Study Hsbc
1 - Case Study Hsbc introduction. 1. Background To HSBC’s shareholders, they would be very happy. HSBC has exceeded its profit expectations in the first quarter of 2011. The bank generated a $11. 5 billion pretax profit for the first half of 2011 up from $11. 1 billion a year ago. But to the bank’s employees, they may not dare to join the celebration. It is because most of them would become unemployed in the next second. HSBC announced its strategy to cut 30,000 jobs before 2013 for cost savings and shaping the business strategy. Due to the HSBC’s layoff plan, the bank creates tension between the shareholders and the employees, employees are afraid of losing their jobs.
The morale and productivity of the company is then sharply decreased. Therefore, we are going to address the problems and find out solutions for HSBC in the coming parts. In recent years, the whole world has been continuously facing economic recession. European Debt Crisis has also been highly concerned and has been posing a potential hazardous danger to the global business world. In the unfavorable economic environment, many small and medium enterprises (SMEs), which could just have a break-even business before, suffer great loss and eventually collapse despite struggle.
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Even multinational corporations (MNCs) have to work hard to find different innovative ways to increase profit margin and reduce cost in order to regain their competitiveness and survive in the market. Different means are used by companies to strive against the bear market and they include partial automation, restructure of operations and so on. In fact, among all of them, the most frequently used method is downsizing, i. e. reducing the number of employees in a company, especially the middle management.
In this essay, in the context of the world’s local bank, the Hong Kong and Shanghai Banking Corporation Limited (HSBC), two issues regarding downsizing will be addressed, which are the negative reactions from the remaining employees and other possible negative effects arising from downsizing, and the corresponding solutions to resolve the negative consequences mentioned. 5. Conclusion In conclusion, downsizing in even a MNC like HSBC will inevitably result in negative reactions from the remaining employees, for instance, morale decline and no incentive to work hard.
In addition to the above consequences, there are other negative effects such as additional costs incurred and low-quality work. Fortunately, there are some possible solutions to alleviate the problems discussed above, for example, job redesign and provision of generous compensation. Although not all of them are applicable to all companies, they could still be a useful reference. Undoubtedly, business environment is dynamic and changing quickly without clues. Unless an organization takes one step ahead of others and highly adapts to the turbulent environment, it could hardly succeed if not being kicked out of the market.