April 21, 2011

The Layoff

Posted in BADM 720 at 10:49 am by Sarah

This was a very interesting reading because it not only described Astrigo Holdings’ predicament but also provided several professionals’ opinions on how to solve it.  My favorite of the responses was the one by Jürgen Dormann.

The first thing Dormann says is that the company had worse problems than their operating costs.  The various departments were not working together, the company’s board was completely absent, the one person who gave the CEO any valuable advice got a pat on the head in return, and no one had bothered to ask the employees what they thought.

This last item seemed to be the biggest thing in the response.  Dormann describes being at the helm of another company on the brink of disaster, and sending a letter out to all employees asking for ideas.  I was astounded to read that the company saved $1 billion in the next two years based on employee suggestions.

The other item in Dormann’s response that I really like is the idea that the CEO needs to be a model of the behavior he expects from his managers.  Executives considering laying off even a single employee have no business eating in private dining rooms or flying business class.  No one is entitled to spend company money on luxuries when it should be going toward saving someone’s livelihood instead.

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