Discussion 2: Downsizing

Part 1: The recent economic times have caused many companies to downsize. From an ethical standpoint, there are two opposing views: 1) Downsizing is ethically valid and a morally responsible corporate behavior necessary to protect the long-term fiscal viability of the company and prevent the company from going out of business. 2) Downsizing violates the psychological and social contracts implicit in the employee-employer relationship since there is an implied sense of job security as long as the employee is productive, thus making downsizing ethically immoral. Which view do you support? (Option 2) Why? Part 2 (Respond to Bethany): Downsizing is something that no one wants to go through, but it is feared by all. The company, of course, does not want to downsize because that is a direct indication to the overall health of the business. Employees hope that they have security and are not going to be at risk, and worse, when it does happen, it is only natural to hope that you make the cut. But the truth is, when a company is in danger and needs to make serious financial cutbacks to survive, downsizing must be considered as an option in order to endure in the long term. The truth is that we hope the company has been handled responsibly, has taken every opportunity and precaution to avoid laying people off. However, when every other avenue has been exhausted, payroll is one area that can save major cost. The expectation when this has become the only option is that it is handled in the best possible way. How many people must be considered, determining which people that will have to go, how the process will take place, and what is the company able to offer as severance. Every step of downsizing must be a well thought out plan, remembering that these are the very people that have been contributing their time and efforts to the success of the business. Part 3 (Respond to Jaclyn): While it is hard to stand firm on either standpoint, the size of the company would have to be the ultimate factor for me. My opinion is also biased because I have lived through it second-hand. My father, the sole breadwinner, was downsized from a large company when ownership changed hands. After a year of searching, he was able to find a job with a small, family owned business. He has been with them for over 20 years now, through the good times and bad. He and his co-workers go to great lengths to help keep the business open, like electing to go home unpaid if there is no work to be done. Therefore, I believe in a smaller company, like a family owned business, employees are more emotionally attached to their work and the overall success of the business. Granted if there was no other way to save the company, I feel the employees of the small business would understand the need to downsize, and possibly volunteer if they were in a better position to be out of work than others. That being said, I am firmly in the middle of the two statements. If a company can find no other way to prevent downsizing, then I believe they will be better off bringing the employees into the conversation. The employees may find the solution the company need. Interestingly enough, when searching for alternatives for downsizing, a report from the Society of Human Resource Management stated after tracking “the performance of downsizing firms versus no downsizing firms for as long as nine years after the downsizing event … the downsizers never outperformed the no downsizers”. For part 1, please read and respond to the above question (200 word minimum). Then, for parts 2 & 3 please respond meaningfully two other students’ postings. Please note that all parts are to be completed as SEPARATE entities.