Plastic Packaging company is experiencing various challenges the executives have decided to lay off some of its employees. The company faces financial struggles caused by a decrease in customers’ demands. The company also faces a lack of employee involvement in major decision-making decisions. Employees are informed of the executive’s decision to implement layoffs and are upset since they were not informed. Also, the company lacks a suitable team to implement vital decisions and highlight strategies to solve financial challenges. John handles the organizational challenges solely and ends up making wrong decisions. The end result is that the company is unable to satisfy its customer’s demands.
The layoff move by the packaging company is expected to pose challenges to the company. Firstly, the company will face a lack of skilled labor to perform various operations. Layoff leads to reduced skilled workers (Mujtaba & Senathip, 2020). Employees left experience low morale due to mixed emotions and fear of being laid off next. The remaining employees will also experience reduced satisfaction and commitment to the company operations (Mujtaba & Senathip, 2020). This will lead to low productivity, and the organization will struggle to meet the customer’s demands due to increased workloads. Hopelessness and depression may also affect the laid-off employees due to difficulties finding other employment opportunities
The financial crisis in the plastic packaging company may have been caused by poor management of company resources. The company could have committed more resources to the payment schemes of many employees, yet it is a small company that few employees could service. This has triggered the executives to lay off some employees to minimize wage costs. Also, poor management systems lead to financial crises and dissatisfaction among employees. When an organization is poorly managed, challenges such as financial crises are evident (Hertati et al., 2020). This is because the management sets a pace for the organization and decides where resources should be committed. Also, poor management leads to poor decisions being made regarding financial management.
Alternatives and Recommendations.
John could have involved employees representatives in decision-making before deciding on implementing layoff. Involvement would have led to the articulation of better strategies that will be favorable to both the employees and the company. Employees would understand the company’s action, raise their concerns, and find the best alternative together. Working in shifts and reducing employees’ wages would limit the stress and depression associated with looking for new employment opportunities. Employees would still work at the organization but for fewer hours. This may enable them to achieve a work-life balance. A reduction in employee wages will minimize costs and enable the company to utilize the extra costs to improve the financial situation. John could also change the company budgeting systems to ensure the funds generated are committed to solving the company’s challenges. Reviewing the budget will enable the management to figure out activities requiring priority in allocating funds and minimize operations lagging the organization behind. John could also have identified the root cause of the financial challenges as laying off the employees was not the utmost solution.
To improve employees’ involvement in decision-making, John could organize various team groups from the employees and involve them in decision-making. Groups contribute diverse perspectives and make better decisions than individuals(Stan, 2008). To implement a working shift model, John organizes employees in groups and fix their shift based on their teams and the priority of their tasks. A shift system is a flexibility program that will enable the company’s management to monitor employees keenly and lay off non-performing employees (Wynn & Rao, 2019). To change the budgeting model, John should identify the critical processes in the organization and commit more funds to those operations. Implementation of these strategies would solve the challenges facing the organization.
Hertati, L., Widiyanti, M., Desfitrina, D., Syafarudin, A., & Safkaur, O. (2020). The effects of the economic crisis on business finance. International Journal Of Economics And Financial Issues, 10(3), 236-244. https://doi.org/10.32479/ijefi.9928
Mujtaba, B., & Senathip, T. (2020). Layoffs and Downsizing Implications for the Leadership Role of Human Resources. Journal Of Service Science And Management, 13(02), 209-228. https://doi.org/10.4236/jssm.2020.132014
Stan, A. (2008). Groups decision-making within the organization. Studies and scientific research. economics edition, (13), 94. https://doi.org/10.29358/sceco.v0i13.29
Wynn, A., & Rao, A. (2019). Failures of Flexibility: How Perceived Control Motivates the Individualization of Work-Life Conflict. ILR Review, 73(1), 61-90. https://doi.org/10.1177/0019793919848426