Ethical Issues Concerning Downsizing

What Makes the Issue of Downsizing Ethical? In a separate discussion about the most frequent Reasons for Downsizing the Labor Force, we examined each justification and the underlying causes. However certain ethical issues concerning downsizing have to be considered, since it is often decided or recommended by management in order to protect the interests of the shareholders and their profits.

Is this objective ethical? In a business sense, it is; but management’s responsibility doesn’t end in the execution of its decisions. There should be equal value placed on the company’s moral responsibility to guarantee the welfare of the employees after making such decisions. In the end, a pronouncement to downsize may reveal an entrance of management’s failing to make sound business decisions or to foresee and forestall the worsening of a condition that necessitated the resolution to decrease the labor force. The employees simply perform the management’s business projections and forecasting.

Hence there should be a careful evaluation of whom to lay down off to be able to look for the level of the company’s moral responsibility. Laying-off the labor force of a whole flower facility may be necessary, but management shouldn’t forget the value of the assistance rendered by those who contributed favorably to its previous successes. Otherwise, those who are considered as survivors to the downsizing symptoms could be demoralized by the company’s insensitivity to the value of the effort that workers have exerted. In the long run, the objectives of downsizing wouldn’t normally be achieved if the remaining workforce becomes less efficient or looks for other sources of livelihood.

The company then is bound to suffer from productivity loss or to meet additional costs in recruiting/employing or both. It is a known fact that not absolutely all downsizing decisions have produced excellent results since the companies also proceeded to go into personal bankruptcy or closure even following the layoffs. It strengthens the beliefs of those who do not support downsizing that other factors donate to business failure that focuses only on labor costs is not the ultimate remedy.

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Based on the final results of downsizing as answers to financial dilemmas, there are certain lessons to be discovered. What Steps Can Be Taken to Ensure Ethical Downsizing? Off First, downsizing is considered as ethical if it’s been used as a final resort. Questions about morality and propriety arise if it is used as a shorter route to accomplish income, as a means of attracting traders or the capital market. Consider salary cutbacks before downsizing, including those on the organization ladder. Experts think that if members of the top echelon experience the effects of reduced benefits and salaries, they will be able to express the reality and the urgency of the financial distress being experienced by the company.

The percentage of reduction will be applied in conditions of the lowest salaries having the least cutbacks; while the highest-paid professionals shall have the greatest amount of reduction. It should be clarified that salaries will be reinstated once the company has sufficiently recovered since this will motivate the whole organization to work for a common goal. For more information about the choice steps taken before downsizing decisions are made, please check out the next web page.