MANAGEMENT AND DECISION MAKING
Following the recent unfortunate post-election skirmishes in the country that has gone on for a while now, the economy has greatly been affected. This has led to an economic slowdown whose ripple effects has hit our company and caused drastic changes in the operational activities in the company which if not dealt with prudently will destabilize and jeopardize the great success witnessed over the years of the company’s existence. It is to this effect that I have called this meeting with you (managers and supervisors) to disseminate information regarding the current company position given the situation at hand. The company has seen a high rise in production cost and an unsustainable wage bill that is threatening our financial stability.
As we all know, the currency has reduced in value, and this has caused inflation to rise by a significant margin. The cost of materials we use for production has skyrocketed because of the rise in imported goods given the fact that we import 90% of the needed materials for production. Given the market price dynamics associated fluctuations, the profit margin has reduced significantly because the cost of production is way high in comparison to the returns realized at the end. This has made our investors and other shareholders very unhappy hence threatening and jeopardizing the success that the company has built over the period of its existence. The situation has been exacerbated by the unsustainable wage bill which takes a considerable portion of the company’s total revenue. Challenging economic times have increased the cost of living with the labor laws being strict on employees’ welfare; these are the factors behind the current wage bill. A decision to deal with the wage bill problem has been reached by the relevant authority, and it is according to the decision making organ of the company, the best alternative to take in order to balance and salvage our financial stability.
Two options were presented to manage the wage bill problem. The first one was to reduce the wage bill by reducing the salaries of individual employee and the second one eliminating some of the employees altogether. Both options will reduce the wage bill and help stabilize the financial status of the company. It was decided that some of the employees will be laid off. The option was more preferable to the first one given the context in which it was arrived at. Reducing the salary of each employee will be tantamount to grievances from the same employees and also not ideal given the rise in cost of living in the country. Therefore, it is to this effect that I am revealing to you that a list of the employees that will be laid off has already been constituted. However, there is confidentiality of this list and information of employees being laid off and hence the request that any of the information should not be relayed to the rest of the employee base until after the specified period of two weeks when the list will be made public. To avoid any worry amongst the members present at this meeting, none of you is present in that list, and that should be enough reason for holding to the confidentiality request.
A move like this will give rise to questions of what will happen in the particular departments affected by the decision. However, the impact of the move in these departments has been assessed, and a plan constructed to cushion the impact. In the production department, planned introduction energy efficient machines that will fill the labor vacuum created and that will also save time, capital, and increase production at the same time because of their precision and efficiency. The human resource department is also one of the affected, however, reducing the number of employees will reduce the workload of the department hence a lesser number of workers needed.
Therefore, each departmental manager of the affected departments is tasked with planning for the absorption plan that will neutralize any projected impacts. To this effect, it is presumed that it will be difficult to plan and execute this plans without breaking the confidentiality agreed upon during this meeting, however, some assistance will be provided, but the central part of keeping the plan confidential will lay upon the managers wholly. The help will be in the form of consultation with the decision-making body of the company which managers of affected areas will liaise and hold planning meetings. This is so as to have a consolidated plan of how to cushion and ensure a smooth transition to the new structure going forward given the short time of two weeks.
The affected departments are expected to transition smoothly with time guided by the transition plan constituted in collaboration with the decision making committee. The plan is expected to contain a new structure of the department, and the clear description of what has been eliminated, as well as what measure has been put in place of the gaps created. This will be easy for the rest of the remaining employees to grasp and adapt. The plan should also ensure that no unprecedented occurrences will be experienced that will put the transition that could lead to overloading of work at risk, or conflicting functions which may lead to discontent among the workers.
Ehrmann, M., & Fratzscher, M. (2005). COMMUNICATION AND DECISION-MAKING BY CENTRAL BANK COMMITTEES. 9-24.