The possible cause of the company’s decline is because the popularity may have fallen due to seasonal changes in the market demand. The Italian furniture market may be saturated with other marketers making the consumers have a variety of sellers. The other thing that would have caused the decline on the profits is due to increased expenditure. This may be due to the hiring of trained and more staff in the business. Also, maintaining the business in a strategic locality may lead to increased expenditure due to increased bills (Thompson, 2010). Market fluctuations could also have led to the decline on performance of the company. This means that when the cost of material increases the gross profits decline substantially. The venturing into the market of producers with compromised products will greatly affect the profit margin of a business significantly. This is because the compromised products will sell at a cheaper price making the genuine product delay to sell. This also means that the volumes of sales drop significantly.
Downsizing the operation means the business reducing the overall workforce in order to increase the business’ productivity. What Mr. Wilson should do in order to have a smooth transition during downsizing is that he should inform all the employees on the importance and the reasons for his act of downsizing. He can opt to set a target with the employees that the company should increase its profits in a certain period failure to which it will lead to retrenchment. Laying off employees should be conducted in situations where they do not perform as expected.. This will be a civilized way to handle those people who are not performing in the business (Minnick, 2009). This will act as a wakeup call to the employees and this will extremely increase their output. Another thing is that Mr. Wilson should hold onto the employees he needs. This is by investing in them through training, increase of communication with them, involve them in decision making like in salary cuts and dismissals. This will make the employees feel much appreciated and respected and this will motivate them accordingly.
Merson, R. (2011). Guide to managing growth: Turning success into even bigger success. Hoboken, N.J: Wiley.
Thompson, J. L., & Martin, F. (2010). Strategic management. Andover: Cengage Learning.
Minnick, D. J. (2009). Survive downsizing: How to keep your job and become indispensable to your company. New York: iUniverse, Inc.