The Pros and Cons of Corporate Downsizing Essay - 1236 Words

OUTLINE I. An introduction to corporate downsizing. II. The reasons behind a company downsizing. A. Cash flow, profits, and profit margins. B. Organizational structure and procedures. III. Planning the downsizing. A. Pro and con factors. B. Identifying the options. IV. Implementing the downsizing. A. Announcing the action. B. Communicate. C. Staff Stability. V. Conclusion Corporate Downsizing: A Profitable Benefit Or An Unprofitable Disaster The unemployment level is at an all-time low. The economy is strong. The stock market is breaking new records. Investors are buying stocks by the handful. Corporations are making extremely†¦show more content†¦To the extent it affects them varies on the company. The products manufactured by companies can become non-useful or not as in-demand as they were before. The lack of productivity is another reason for downsizing. A last few deciding factors are the government deregulating certain industries and excessive overhead costs. Based on a 1997 survey by the American Management Association, the most often claimed reasons for downsizing are â€Å"organizational restructuring, business downturn, and reengineering of business processes.† However, downsizing basically comes down to one issue that all of these factors stem from, money. When a company does not have any money or not enough, it causes problems in the company. In Downsizing Without Disaster, Lynn Tylczak states that everything takes money, and without it a company cannot survive (4-7). A corporation needs to have a strategic plan in place in order for them to be able to implement a downsizing. There are many pros and cons to downsizing and it has a ripple effect on everyone in the corporation. Depending on the planning of the downsizing, one of the big issues to decide on is how to choose who will be terminated. For example, do you go by seniority, a percentage from all departments, an entire department, or by job level or position? These are major options that need to be addressed before anything happens. Most corporations today exist less for the well being of employees than theyShow MoreRelatedTiffany Co960 Words   |  4 Pagesby 20% (O) • Low cost manufacturing abroad Ââ€" China, Brazil (O) • High discretionary income of baby-boomers through credit card use (O) 2. Technology • Increased availability of Internet (O) • Increased use of E-Commerce (O) • New QAD MFG/PRO software to collect real-time data (O) 2. 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