Optimizing Middle Level Management Costs During Economic Crisis

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Organizational Behaviour
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Introduction
To save their financial resources and survive in today's harsh conditions with the least
losses, companies should resort to cutting costs. It is a fact. First of all, many companies rush to
cut middle level management, thinking that this is their salvation. But often, they do not think
about the company's image, in addition to the other consequences listed above.
The current economic crisis is only one of the stages of the economic cycle, and, despite negative
macroeconomic indicators and panic in the media, it will ultimately end in new economic growth
(Benn et al.,2014). When the stage of economic growth comes, the demand for products and
services of companies will increase, all will need middle level management in order to be able to
meet the growing demand in the market. Therefore, the ability of companies to retain and attract
talented employees will directly depend on how companies behaved during the reduction of
middle level management. So the crisis is a good test of its kind (Wagner and Hollenbeck, 2014).
Disadvantages of cutting back
Middle management includes managers at local business units. Delayering or downsizing comes
at a cost.

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Image: Restructing
Source: /www.google.com/search?
q=images+of+cutting+back+middle+level+management&rlz
Less direct leadership
There will be less direct leadership which can lead to detachment between employees and their
managers. This goes against organizations premise of direct involvement, coaching and training
expected from a manager to employees. Cutting back makes it difficult for employees to
approach management with ideas, concerns or issues which may affect operations.
Lack of oversight
Apart from saving money, cutting back is done when companies do not believe that they need
close oversight over employees. Thus cutting back may lead to a single manager overseeing over

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30 which makes it difficult to spot mistakes. Unethical actions by employees may go unnoticed
which can lead to costly errors in customer service or production (Quirke,2017).
Communication challenge
Cutting back middle level may lead to communication problems and the inability to regularly
interact with employees will affect delegation and follow up on tasks. There will be lagging of
cross functional communication. This takes away the nature of collaboration at the work place
and the overall team culture. Effective leadership is necessary to ensure that there is efficiency
at the work place.
Backlash
In small communities when cutting back is done employees who are fiercely loyal to their
managers may lead a rebellion which can lead to disruption of business. This may also public
image damage.
Dismissal is a phenomenon that has become widespread in the crisis. Sometimes many
companies reduce the number of employees, not guided by the criteria for the importance of each
employee for the business process, and the existing costs that need to be reduced. Reduction
most often occurs not on the basis of analytical studies, but on the principle of "management set
the task to cut costs several times." Decisions are made not always deliberately and judiciously,
not only from the point of view of the moral attitude towards employees, but also taking into