MGT602: Business Decision Analytics - Downsizing Report

This report analyzes a case study involving an organization facing falling profits, leading to the decision to downsize. The report details the problem definition, situation analysis, and the sensemaking process undertaken by the management team. It explores the formulation of potential solutions, the selection process, and the decision-making strategies based on employee contribution, flexibility, and teamwork. The implementation of the downsizing process, including employee termination procedures, is discussed, along with team feedback and recommendations. The report also reflects on the personality types of the team members and how they influenced the decision-making process, including the delegation of duties and the steps taken to ensure a fair and informed employee evaluation. Finally, the report emphasizes the importance of employee motivation and loyalty to ensure the long-term stability and performance of the organization. The assignment follows the guidelines provided in the assignment brief.

Running head: management 1
Management
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Institution
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Contents
Problem definition.......................................................................................................................................3
Situation analysis.........................................................................................................................................3
Sensemaking................................................................................................................................................4
Formulation of potential solutions..............................................................................................................4
Selection between solutions........................................................................................................................5
Decision making based on the solutions.....................................................................................................5
Implementation of the process...................................................................................................................6
Testing, team feedback on decisions...........................................................................................................6
Recommendations.......................................................................................................................................7
Reflecting on downsizing.............................................................................................................................8
Bibliography...............................................................................................................................................12

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Problem definition
The main problem that the organization is facing is falling profits in the business
operations, as a result, the major loss that the business has incurred recently of losing two of its
major products to the market. This may be defined as results of poor managerial strategies that
have been used previously which our team intends to rectify with immediate effect (Ni, 2015).
Before making any rectification and or reconciliation of the previously made decisions, the
organization needs to deal with its current status in the market (the falling profits in the business
operation). This condition needs immediate attention before the business losses its current
market position and paralyze. In this case, we consider downsizing to be our immediate action as
we focus on making other changes in the organization with time (Hirsch, 2015).
Situation analysis
When it comes to downsizing, it tends to be a very critical decision to make in an
organization. The action is meant to bring change in the organization and either way it does. The
challenge comes in on what type of change it has brought (Enqvist, 2014). The organization can
underperform and finally get paralyzed as a result of downsizing, but when it is done using the
best strategies and considering all the critical conditions in the respective organization, it can
result to stabilization of the organization financially and enhance positive results in terms of
market deliver, service delivery, consumer satisfaction and increased returns which remains to be
our main intention in this case (Enqvist, 2014).
In most cases, downsizing makes managers squirm thus tends to be done poorly. In some
case organizations tend to underperform as a result of poor strategies used when taking the

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actions of downsizing and lack of observing the critical conditions of the business in market
conditions (Yun, 2016).
Sensemaking
Since the organization has made a significant reduction in profits, there are many
decisions that can be made but in most cases due to market variations, the decisions made take a
lot of time to implement and make a positive effect in the respective organization (Salas, 2015).
In our case, time is one element that we wish we had in order to make some more changes but
apparently, we don’t have much time and according to the market status, the business is at risk of
incurring more losses. From our analysis earlier, we established that the organization can operate
without problem with two hundred and seventy-five people but as for now the current population
is three hundred people (Guillaume, 2017). The easiest way to handle the situation without
causing further loss to the organization is downsizing in order to reduce the wage and salary cost,
after which the organization will be financially capable of making and implementing new ideas
in order to enhance its operational cost and the output.
Formulation of potential solutions
As different analysts would view the chase, there may be different solutions that may be
applicable in such a scenario. In order to overcome the falling profits in the business, the
organization can increase the volume of the remaining products that they offer in the market,
reduce the overhead cost in terms of the turnaround time in the production process, enhance
quality control in the production process to enhance brand promotion, use of attrition costing
strategy in order to ensure that no customers are lost in the process, and finally downsizing in

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order to reduce the wage and salary cost to enhance the business survival in the next period
(Bratton, 2017).
Selection between solutions
All the above-presented solutions will be effective in the course of the business, but there
needs the clarity of the vital decisions to be put in place first. Since the panel established that the
organization will be stable with a population of 275 people, first things first, we ought to reduce
the population to the least possible population as enumerated by the panel. This will create a
room from the perfection of any other decisions and solutions that will be made later as a result
of reduced expenses. This remains to be the most critical decisions since all the other solutions
will be meaningless if there are loopholes in the expenditure of the organizations (Pettigrew,
2014).
Decision making based on the solutions
Having selected the main solution to work on, we ought to consider some specific
strategies in the process of downsizing in order to enhance uniformity and increases the chances
of business survival in the market with respect to its population and the skills of the driving
force. The strategies that can be used when it comes to the downsizing of an organization may
defer due to different environmental conditions, the type of business and other factors (Larsen,
2017). In our case, we consider the contribution of the employees, their flexibility with changes
in the market, their role in the organization, their contribution in their respective department,
their involvement and cooperation with other employees in other departments and their input
when it comes to teamwork. As the managers forming the panel that has been entrusted with this
critical business decision, we acknowledge and are fully aware of the consequences of bad

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decisions and wrong choices in the process. We have there taken a further step in identifying our
personality traits as the managers in the panel in order to enhance diversity in the decision-
making process and also enhance ethical, sustainable, legal practices applying to the redundancy
decisions in the organization (Cooper, 2015).
Attached to this assignment is an excel sheet that shows the employees who will be
released by the organization (the highlighted rows) as enumerated by the panel under
consideration of different factors which includes the current and the expected future
contributions of the employee to the organization among other factors.
Implementation of the process
When it comes to termination of an employment contract, it is a procedural thing that
when not done properly it can cost an organization. Employees who will be affected by the
action of downsizing ought to be given a reasonable explanation of why the action has been
taken and the reasons have to be outstanding. All the employees should be analyzed in terms of
their performance in their department of work, their general contribution, their involvement in
the business, their level of commitment, their level of discipline and other factors (Ferrell, 2015).
This is vital because every employee being released by the organization believes that he/ she has
a high contribution to the organization and there ought to be a subsidiary reason over the case.
Testing, team feedback on decisions
After a successful implementation of the actions taken by the panel, we need to evaluate
the effectivity of the decisions made and how we can still improve the performance of the
organization under the current circumstances (Valentine, 2015). To begin with, we will consider
the cooperation of the other people considering that their teams have been affected by the

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downsizing action; consider the efficiency of the remaining population in their respective
departments, the initiative of the decisions made by the team members and the performance of
the organization under the new changes made. Lastly, we will evaluate the quality of the services
offered by the remaining population in the organization and establish how effective the decision
will serve its purpose in the organization (Kerzner, 2017).
Recommendations
The decision that the panel made was very critical to the organization and we need to
ensure that all the remaining people in the organization are subordinate and motivated in order to
enhance loyalty which will establish a strong foundation of the business in the market and act
accordingly to the potential market gaps. We recommended that the organization should focus on
motivating the employees in order to enhance their performance. The employee performance is
directly related to the performance of the organization. When employees are motivated, they tend
to perform better having an extra aim in the organization and so is expected in our case
(Panagopoulos, 2018).

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Reflecting on downsizing
In making the decisions related to the process of downsizing in the organization, we
considered our individual personality types in order to enhance the performance of the team. We
found that our personality types had a very big difference thus making our view of the situation
different which could lead to an altered decision-making process. One of our member’s, shaira,
has the personality type of a logistician. This personality type is known to be the most abundant.
the characterizing qualities of honesty, down to earth rationale and resolute devotion to
obligation make Logisticians an essential center to numerous associations that maintain
conventions, principles, and measures, for example, law divisions improved an ethical ground for
us during the time spent assessing the populace to discharge from the association. In accordance
to the personality type of a logistician, our team member did not make any assumptions but
instead evaluated the surroundings through observations and made conclusions from the
information provided as it was without making any further analysis (Haberler, 2017).
The other team member in out panel, Deeksha, has the personality type of executive. This
personality type is most common in leaders and ensures that the best decisions are made out of
hard situations. Integrity is one quality that has a high ranking to the executives and this makes
the decisions made more essential as presented by the executors that they would be presented by
any other individual with another personality type. Individuals with this personality type are
dedicated to the success of their projects and that of their teammates and so is Deeksha. This
personality type has ensured that the panel with being enlightened in its decisions concerning the
evaluation of the employees during the process of downsizing.

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On the other hand, my personality type is an adventurer. Unlike the above-mentioned
personality types, as it sounds, mine is not so strict in relation to the working environment and
this enabled us to get all the information that we required regarding the downsizing concern. This
personality type enables me to reinterpret the information given in consideration of all the
possible contingencies. It enabled the panel to reach the conclusion of the population to be left in
the organization and enhance its stable performance in the industry and ensuring a stable income
generation (Bowie, 2017).
In the part of the delegation of duties and roles, we considered our individual personality
types in order to ensure an effective performance of the panel and the provision of positive
results to the stakeholders of the company. As for me, I was assigned the role of evaluating the
best performance of the organization under the employees who were considered to be the
survivors and provide the necessary adjustments where possible. The reevaluation involved the
performance of the employees as a team and their coordination in the working environment
(Hirsch, 2015).
Shaira was given the responsibility of evaluating and analyzing the information provided
to the panel regarding the employees of the organization and the performance of the employees
as a team and at a personal level. On the other hand, Deeksha was given the responsibility of
selecting the employees to be released by the organization as the results were evaluated and
analyzed by sharia. This is because Deeksha’s personality type is very outstanding in terms of
organization integrity, project management, and group performance (Guillaume, 2017).
In order to ensure that the analysis of employees was done in accordance to their rightful
information and their profiles in the company, some specific steps were taken;

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1. Gain access to the company’s cloud system to extract personal information of the
employees as originally recorded and stored by the organization as well as their personal
proceedings in their line of work (Christmann, 2015).
2. Evaluation of personal and group efforts at different departments in the organization in
order to ensure the consideration of social loafing,
3. Ensure and enhance the controlled information system of the organization in order to deal
with the issue of cascading of information in the organization (Bratton, 2017),
4. Evaluate the input required in deferent departments in accordance with the expected
maximum output in order to determine the population of the team that best suits the
department in order to cope with power plays.
5. In order to control the virtual communications in the organization, our panel decided to
the results of different activities rather than the activities, schedule regular
communications, develop standards that build a cohesive culture within the organization,
and establish rules of responsiveness (Cooper, 2015).
The above steps ensured that all the ethical challenges in decision making were met and the
results would be as expected.
The fundamental and most critical lobby sign of the downsizing practice was the capacity of
associations to offer improved administrations with a less number of laborers along these lines
demonstrating lower costs being brought about on work constrained administration. A perfect
situation for the new associations is one in which a specialty unit performs better and in the
meantime costs a lesser sum (Järvinen, 2015). In any case, downsizing has its upsides and
downsides and an association should never think about this training as the single, most
dependable answer for bringing down expenses or upgrading execution, and must remember and

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know about the way that downsizing does not generally pull off the foreseen results. Purposes
behind downsizing fluctuate according to the segment. Private organizations have a benefit
amplification thought process and consequently, they normally should diminish their expenses
however much as could be expected to keep up their aggressive edge in an all the time more
global market. Private area substances need to make their activities with the end goal that they
can likewise make the best utilization of their speculation and offer promising comes back to
their investors (Judd, 2014)

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Bibliography
Bowie, N. E. (2017). Business ethics. Cambridge University Press.
Bratton, J. &. (2017). Human resource management: theory and practice. Palgrave.
Cooper, C. (2015). Individual differences and personality. Routledge.
Enqvist, J. G. (2014). The impact of working capital management on firm profitability in different
business cycles: Evidence from Finland. Research in International Business and Finance, 36-49.
Ferrell, O. C. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
Guillaume, Y. R. E. (2017). Harnessing demographic differences in organizations: What moderates the‐
effects of workplace diversity? Journal of Organizational Behavior, 276-303.
Haberler, G. (2017). Prosperity and depression: A theoretical analysis of cyclical movements. Routledge.
Hirsch, B. T. (2015). Minimum wage channels of adjustment. Industrial Relations. Journal of Economy
and Society, 199-239.
Järvinen, J. &. (2015). The use of Web analytics for digital marketing performance measurement.
Industrial Marketing Management, 117-127.
Judd, B. L. (2014). Downsizing. Routledge.
Kerzner, H. (2017). Project management metrics, KPIs, and dashboards: a guide to measuring and
monitoring project performance. John Wiley & Sons.
Larsen, R. J. (2017). Personality psychology: Domains of knowledge about human nature. McGraw Hill
Education.
Ni, A. &. (2015). Corporate Social Responsibility. Routledge.
Panagopoulos, N. G. (20189). Sales Force Downsizing and Firm-Idiosyncratic Risk: The Contingent Role of
Investors' Screening and Firm's Signaling Processes. Journal of Marketing, 55-70.
Pettigrew, A. M. (2014). The politics of organizational decision-making. Routledge.
Salas, E. T. (2015). Teams in space exploration: A new frontier for the science of team effectiveness.
Current Directions in Psychological Science, 200-207.
Valentine, M. A. (2015). Measuring teamwork. business analysis journal, 122-155.
Yun, S. C. (2016). Development of performance metrics for phase-based capital project benchmarking.
International Journal of Project Management, 389-402.

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