Analytical Thinking and Decision Making: Addressing Employee Layoffs

Desklib provides past papers and solved assignments for students. This report analyzes employee layoff solutions.

ANALYTICAL THINKING AND DECISION
MAKING

INTRODUCTION
Analytical thinking and decision making are one of the foremost traits of workers and managers in
conducting the business and solving the many problems that arise in the business. A problem in
recent times that has taken a toll on businesses is the employee layoff where more and number of
employees are leaving work leading to a dearth of skilled and able workers. The research discusses
the importance of problem-solving in this context and making the use of analytical tools in order to
support the performance of the organization. The problem of employee layoff could relate to a
number of alternatives and objectives for the solution of the decision problem. The problem directly
affects the business working as the employees are the bane of the business and if they leave and
show disinterest in the company then it becomes very difficult for the company as well to operate.
The problem will be analysed on a number of parameters which will look at the problem from a
different perspective (Bazerman and Moore, 2013).

QUESTION 1- IMPORTANCE OF DECISION MAKING & APPLICATION OF
DECISION-MAKING TOOLS
IMPORTANCE OF DECISION MAKING
Decision making is an indispensable tool in management as the company and its management has to
make decisions regarding the company every day. The decision making is a crucial step as it
determines the path to success for the firm. The management and the administration also have to
ensure that the decisions so made are carried out smoothly as they are the ones who face the
consequences when the decision making is not appropriate in the given condition (Puppe, 2012).
Decision making is important for the management and business in the following ways-
Fig. 1- Importance of Decision making
Source- (Akrani, 2011)
 Better Utilization of Resources- The resources are better utilized for the company when the
management takes wise decisions. In cases of unwisely decision making, there is wastage of
resources and loss of valuable assets. Thus decision making is vital for protecting and
utilizing the resources and assets in the best possible way and to generate the maximum
benefit to the company.

 Facing Problems and Challenges- the Company’s administration when takes wise decisions
then it is better capable of facing any kind of problem or challenge that might come in the
way. The problems and challenges are bound to come every now and then which sets up
pace and pressure in the company. The decision making in such times determines the
company’s potential and ability to deal with the problems at hand (Zimmerman and Yahya-
Zadeh, 2011).
 Business Growth- The business growth is also dependent on the decision-making process of
management. The decisions taken for the increase and growth of the business are taken as
an expansion of the business and diversifying the operations of the business. These are all
crucial decisions that determine the success path for the organization. The business growth
is guaranteed when the decision makers weigh all the risks and then take the most
appropriate decision in the best interest of the company.
 Achieving objectives- The Company has some goals and objectives that are planned as
annual or quarterly terms. The goals are of the short-term and long-term range that is
planned under the guidance of the management and the administration. The goals are
strived for and the organization works with the aim of fulfilling the set objectives. For that
also the decision-making process comes handy as the goal should be clearly visible and
achievable so that real decisions can be taken for the organization.
 Increases Efficiency- The act of decision making and analytical thinking in any organization
gives space and wings for increasing the efficiency of the company and in the improvement
of the products and services offered by them. With better decision making capability, the
efficiency of the organization can be improved and which will improve the status and success
weaving capacity of the firm (Fleck and Weisberg, 2013).
 Facilitates Innovation- The decision making in the firm also gives rise to innovation and
improvisation in the organization. By bringing young, dynamic and talented persons on
board, the company can take out of the box decisions and can get to better engage with the
audience for whom it is serving. Innovation is the essence of any organization; companies
must strive to innovate and bring about a fresh change in their outlooks o as to appeal to the
audience and offer them newer offers every time.
 Motivates Employees- The decision-making panel when includes the opinions, suggestions
and feedbacks of the employees working for them, then the employees feel appreciated and
motivated. In a Democratic organization approach, each employee has a voice and all are
heard in order to come to a consensus about the decision making. Thus the inclusion of

employee’s voice in the process of decision making is a great way of motivating employees
to work with better energy (Akrani, 2011).
These are the reasons why decision making is of prime importance in a management system. These
points are to be considered while addressing the problem of employee layoffs in any organization.
TOOLS FOR DECISION MAKING
There are a number of tools available for managers for taking the decisions for the organization. The
many tools which are equally helpful for managers and decision makers are as follows-
Market Research
Market research is an essential tool that works on the principle of researching the market well for
taking appropriate and right decisions. Market research is especially helpful while gathering
information for taking a decision. For example, when a company wishes to introduce a new variant
of biscuits, it will try to conduct market research in the form of a survey and questionnaire to gather
information about the preferred choice of flavour they would like in the new launch of biscuits. So
market research is very helpful in providing the necessary information for the companies in their
pursuit of decision making (Gouillart and Billings, 2013).
Decision Matrix
In the decision matrix, all the available options for the problem are listed down in a matrix-like
structure. This matrix provides a concise insight into the availability of options which can be applied
for the problem in hand. It also allows the interpreter to compare the suitability of the options. The
best part of a decision matrix is that each option is assigned a score on various parameters like ease
of access, viability, long-lasting and so on. These scores add up to create a final score which
determines which option is going to be the best option.
The decision matrix for the problem of employee layoff can be expressed in the following decision
matrix. The scores in each parameter are given out of 10.
Solutions Feasibility Resources Cost Time Total score
Employee
motivation
8 8 7 5 28
Hikes and
Incentives
7 5 2 9 23
Inclusion in 6 6 7 8 27

decision
making
Table 1- Decision Matrix for the chosen problem of employee layoff
Source- (Goetsch and Davis, 2014)
The decision matrix shows that the most suitable option for the problem of employee layoffs is
giving motivation to employees. It is found that mostly when the employees leave work, it is either
because they have disinterest at work or they find the administration not co-operative enough. The
employees are not appreciated or motivated at their work which leads to callousness and growing
dissatisfaction at work. By providing motivation and cheering them from time to time, employees
might find staying at work a good decision and thus the problem of employee layoff could be
reduced to a great extent (Momoh, 2012).
Cost-Benefit analysis
Fig. Cost-Benefit analysis
Source- (Yin et al., 2011)
The cost-benefit analysis includes the assessment of costs that will be incurred for solving the
problem faced by the organization. The solution that seems to generate the maximum benefit and
an overall increase in the net profit is determined by the decision-making panel. Since the aim is
profit maximization, all the decisions are directed towards that direction.

T Chart
T chart is also an easy option that can be used while making a decision for an option. The table is
drawn with pros one side and cons on the other side. All the pros and cons are jotted down in the
table and then the comparison is made by seeing who outweighs what. Every option has some
advantages and some disadvantages which determine the possibility of choosing that option over
another. It also provides reasoning and justification for the option by giving satisfaction for the
reason (Aarikka-Stenroos and Jaakkola, 2012).
SWOT Analysis
SWOT Analysis is the most popular way of assessing the final outcome and verdict of the possibility.
The SWOT analysis includes the strengths, weaknesses, threats and opportunities for the betterment
of the organization. For any company, a SWOT analysis can show what are the strengths the
company has which it can leverage, the weaknesses which it has to improve, the opportunities which
can be made use of and then the threats which threaten the company’s performance.
Pareto Analysis
Fig. Pareto Analysis
Source- (Moses, 2017)
The Pareto Analysis follows the Pareto principle and is usually used when the organizations have to
make huge decisions. The Pareto principle includes that 20% of the factors that contribute to 80% of
the organization's success are given priority over all others. The outcome of this principle and this

analysis will be the most result-oriented approaches and solutions which will be given priority over
others.
Feasibility Study
The feasibility study uses a different approach that requires the managers and the decision makers
to create a project and then assesses its feasibility. The profit-making capacity of the project is
assessed in the feasibility study. The feasibility study is also the first thing to be used while initiating
a new project or commencing a new product or service. The formulation of an ideal strategy for the
company will give insight on how to carry out and give direction to the project (Moses, 2017).
These are the various steps and methods used for the decision making the process in many kinds of
industries (Gouillart and Billings, 2013).

STEPS IN DECISION PROCESS
Fig. Decision Making Process
Source- (Ishizaka and Nemery, 2013)
The decision-making process encompasses a number of steps like gathering information about the
decision and assessing the alternate options available.
Step 1: Identify the Decision
The first step is to realize that there is a need to make a decision in a certain context. The nature of
the decision, its urgency, its implications and consequences are to be analysed before the decision-
making process can commence.
Step 2: Gathering Information
The information that forms the background of the decision is considered. The information that is
gathered forms the base for decision making. When any problem arises in any kind of organization,
the decision making is done by assessing the complete [problem in detail which is the information
gathering phase (Whimbey et al., 2013).
Step 3- Identify the Alternatives

During the pursuit of finding the information and working on the decision to be taken, there are
many other possibilities that might pop up which should also be considered. If the alternate options
seem more cost-effective and efficient then the alternate option is opted for. Thus decision making
is a very flexible approach that is open to other possibilities.
Step 4-Weigh the Evidence
In this step, the application of the alternate options is imagined to see the possibility of success of
the alternate options.
Step 5- Choose Among alternatives
The many alternates are assessed and they are arranged in order of priority to select the best
alternative available that can solve the problem.
Step 6- Take Action
The action is taken against the problem by applying the selected alternative (Provost and Fawcett,
2013).
Step 7- Review Decision & Consequences
The decision is viewed to see how effective has it been in solving the problem the organization is
facing.
These are the steps of the decision-making process. The decision making is an integral part of any
organization and due diligence should be observed during the process of decision making in the firm.

QUESTION 2- SELECTION OF A DECISION PROBLEM
The problem that is selected is about the rising case of employee layoff. The layoff arises when the
company realizes it has excess employees and that it needs no more employees. The step is initiated
by the employer. The process of employee layover is a problem as the employees are asked to leave
the company. The company can face negative repercussions of employee layoff in the following
ways-
 The employees can sue the company as it has promised them employment. The employees
are asked to leave within a notice period. The notice period ranges from company to
company. The employees can search for alternate work in the notice period but those who
can't find work in the duration of the notice period end up jobless. The employees who are
the bread earners of their family face the maximum trouble as it is imperative for them to
search for employment elsewhere (Whimbey et al., 2013).
 Other ways in which the company can suffer is reduced productivity for the overall business.
More employees mean more work and more productivity and vice versa. The company has
to suffice by adding more workload and work pressure on remnant employees. Furthermore,
the company has to search for alternate and more talented employees which are also a
time-consuming process as well.
 The company has to pay severance, PF’s and other end-term bonuses to all the employees
who are lay-offed which can cost hugely to the company. If a company is already going
through a crisis. Hence laying-off employees on a large level can cost a fortune to the
employer which is why the problem needs an alternate approach (Weiss, 2012).
These are some of the factors in which the company is adversely affected due to the problem of
employee layoffs. The company should conduct the lay-offing if it is deemed urgent and for the best
interest of the company.
The alternates for employee layoff at any firms can be as follows-
1. Ask employees for ideas- The suggestions from the employees are welcome about how to
cut the costs and also ensure stable productivity. The employees can give practical
suggestions which they find right in a given case. The employees will render agreeable ideas
which can be used by the employer to cut the costs and not lay-off the employee.
2. Cut the extras- All the extra benefits given to employees can be reduced like the bonuses,
incentives, travel vouchers or overtime wages. Any unimportant up gradation at work could
be postponed. The elite office parties could also be switched with alternate and cheaper

options. The employees who still feel that they cannot work within the constraints will leave
anyway.
3. Offer extra days of unpaid leave- the employees can be offered leaves when there is not
much work and that leave can be unpaid. Many employees do not mind leaves even when
they are unpaid. This is still a much better alternative than laying –off employees altogether
just because there is lesser work to be done at work.
4. Shorter work weeks- The minimum hours of work in a week can be reduced with a
proportional decrease in wages. This also can get well along with the employee's terms as
employees can get back home earlier and will have lesser work pressure at work.
5. Cut part-time workers- Many companies hire part-time workers who work from their home
and do not come to the office on a daily basis. The part-time workers are hired by companies
when employees are talented but prefer to work from their home due to other
commitments. College-going students, new mothers or housewives who have the necessary
skills but can't get to work physically avail these benefits. When the company already has
numerous employees in the office premises itself, the part-time workers can be refused to
work as it requires additional labour to go through their work (Herrmann and Herrmann-
Nehdi, 2011).
6. Exchange workers with other employers- Many parent companies with sub-companies or
subsidiaries do the exchange of employers. The subsidiaries that are lacking employees can
be sent employees from the parent companies. This will create a balance without much fuss.
These are some of the alternatives to the problem of employee-layoff in an organization. The
alternates are discussed which can be of maximum help to the company.