Downsizing, a widely recognized phenomenon in today’s corporate and business world, poses ethical dilemmas for managers. They must carefully consider the effects of downsizing on all those impacted by it within organizations globally. Remarkable instances of downsizing have been witnessed in numerous organizations worldwide in recent years.
If the typical organization was depicted five years ago, it would resemble a Christmas cake; however, nowadays it resembles a pancake (Garters, Reg 4). In 1998, corporations announced the highest number of job cuts for the decade, totaling 677,795 (Hoffman, 1). This significant figure for 1998 raises concerns about the future in the new millennium. The fundamental query is whether downsizing is ethical or not. This question poses a difficulty, as some argue it is necessary for corporations to survive in today’s market, while others believe it is not.
In regards to downsizing, an interesting perspective on the significance of values is presented by author Kenneth W. Johnson. He proposes utilizing the acronym EPIC as a framework for establishing a reference point for values. According to Johnson, the letter E represents Empathy, indicating the importance of considering how our choices affect others and contemplating the repercussions for those not directly involved in decision-making.
P = Patience means taking the time to consider and ponder the potential outcomes of a decision before taking action.
I = Integrity involves making choices that are consistent with both each other and the expressed and practiced values on empress. It entails striving for ethical consistency in decision-making.
C = Courage is about choosing to do what one believes is right, even if it may not be popular or may require personal sacrifice.
As managers, how can we ensure legal protection and minimize the difficulties associated with downsizing? One approach is to have a solid business justification. By effectively communicating a well-defined consolidation plan, the company can establish trust and credibility with both the employees leaving and those remaining. It is crucial to provide a written statement clearly outlining the rationale behind the staffing changes (Hoffman, 1). Additionally, it is important to review regulations regarding plant closures to ensure compliance with employee notification laws, as well as regulations imposed by state and local government officials.
The written notification should contain the layoff date, justification, unemployment office address, and state authority name (Hofffman, 1). Assess the various positions to determine if they can be merged, and also analyze the employees to identify potential consolidation opportunities. Managers generally prefer to retain highly productive employees over less effective ones. Prior to undertaking this strategy, it is crucial to have performance evaluations for all employees to mitigate potential consequences, as employee layoffs are already a challenging task.
To ensure convenience, it is advisable to promptly notify employees about the downsizing so they can start looking for new job opportunities. Treating them with the same respect you would expect is crucial, as this greatly impacts their experience. Many writings on various business subjects, including this one, are accessible. Personally, I find it captivating and occasionally exasperating to read about how certain businesses handle or neglect their employees.
I am determined to do everything within my capability to act ethically, even if others may not always perceive it that way. It is advisable for the class to gain a comprehensive understanding of downsizing for both legal and personal reasons. This knowledge can greatly benefit all the parties involved and potentially improve their situations.
