Preview

Downsizing: Costs and Assigned Government Executive

Good Essays
Open Document
Open Document
400 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Downsizing: Costs and Assigned Government Executive
Industry downsizing has been a major part of the corporate world, even government agencies are downsizing. GovernmentExecutive.com "covers the business of the federal government and its huge departments and agencies - dozens of which dwarf the largest institutions in the private sector" on its website. Read the assigned Government Executive article and answer the following questions:
Which industries have substantially reduced fixed cost commitments?
Do you believe this reduction in costs has substantially impaired the ability of these industries to meet the needs of their customers?

It appears that both privite and public sectors are reducing fixed cost.
According to Ciccotello and Green, the technology, auto, and government industries have substantially reduced fixed costs. The specific examples referenced in the article, Industry’s Downsizing Lessons, were IBM, Honda, and the DoD; in some cases the downsizing has been beneficial and in others it has been detrimental.
DoD has taken the lead in the current round of federal downsizing, instituting several initiatives to reduce permanent staff positions, rely more on temporary help and outsource production.
Honda made large cuts in its permanent engineering staff in response to the more volatile sales environment for automobiles since the mid-1980s. These cuts left Honda unable to keep pace with its competitors in the design of new automobiles. The results have been the loss of market share and profit for Honda, which now faces the difficult task of trying to catch up. The consequence of cutting fixed costs too far could be even more dangerous for a government enterprise like DoD.
The computer industry is rapidly changing technology is causing companies to reassess large, fixed-cost commitments. As a result, evidence of decreasing operating leverage in this industry abounds. Many large computer firms have made dramatic cuts in permanent staff. Standard and Poor's reports that IBM had more than 370,000

You May Also Find These Documents Helpful

  • Good Essays

    are not confined to just those industries. The costs are ultimately integrated into the overall…

    • 506 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Capital One Case Study

    • 1239 Words
    • 7 Pages

    • How do decreasing marginal costs affect profitability? • What effect will fixed costs have on the result?…

    • 1239 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    The Reason Foundation, Privatization and Layoffs (March 1, 2001) Retrieved on January 23, 2012 from http://reason.org/news/show/privatization-and-layoffs…

    • 938 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Possible solutions at managing layoffs would include considering alternatives to reducing staff, properly training managers how to handle layoffs, or implementing a hiring freeze. Companies should consider whether job losses are in fact necessary. Too often organizations result to downsizing and don’t even consider the alternatives because they want to show shareholders they are trimming costs. Alternatives to layoffs include cutting wages in management as well as lower level positions, transferring employees to other departments, and using fewer contract workers. Also, training managers on the different type of…

    • 333 Words
    • 1 Page
    Satisfactory Essays
  • Better Essays

    Some reasons that a company would look at reorganization and layoffs would be that the sales of that company have dropped below what they were projecting. To help with costs they may look at laying people off and then reorganizing the employees that are left to help ensure that the internal structure remains in tact to ensure that the company continues to run smoothly. Most companies see layoffs as a way to save money, however most times this is not the case due to the things that the company has to pay out to the employees that were let go. Alternatives to job cuts include transferring staff to other departments, using fewer contract workers, or cutting wages. Whether it's a termination, where the employee's job is eliminated, or a layoff, where the employee…

    • 1014 Words
    • 3 Pages
    Better Essays
  • Powerful Essays

    If there are two issues that characterize the challenges twenty-first century corporations face today, those issues can be summarized as "competition and change." (Dessler, p. 13) Rapid change is a common factor that most corporations needed to prepare itself, in order, to be competitive. That is, Verizon is implementing a restructure of their lines of business. One of their focuses is constantly providing improvement of customer services for their customers, such as a faster internet connection, bundling of services, or offering more flexible phone service (local & long distance) packages. The downturn of this restructure is management position reduction, in which, approximately 200 managers will be losing their jobs due to departmental merger.…

    • 1483 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    In the past decade, different terms have been used for the concept of the reduction in workforce. These include downsizing, rightsizing, re-engineering, job separation and workforce imbalance correction. Scholars and human resource practitioners have not clearly documented the technical differences between all these terms but one thing that is common to all is that they all result to lay-offs. Employee lay-offs is not a new phenomenon, over the last decade the business world has witnessed tremendous amounts of changes with the most noteworthy been the technological developments and breakthroughs, deregulation, privatization and globalization (Hiatt & Creasey, 2003). Some of the changes have transformed the way organizations conduct businesses by interconnecting all the worlds’ economies. Dynamic environments like these require dynamic processes, people, systems and culture especially in managing the change successfully. According to Kandula (2003), if organizations are to develop, they often must undergo change at various levels in their development. There three types of organizational management changes that can occur; planned versus unplanned change, gradual versus transformational changes and organization wide change versus departmental change (Anderson & AcKerman-Anderson, 2001).. Key factors for success include planning the long tern strategic vision in advance, empowering people to make decisions at the operating level, optimizing the in formation communication to enable effective information management (Kotter, 1996). Change in the organization is a difficulty issue to manage due to internal resistance coupled with uncertainty on the part of the organization (Paton & McCalman, 2008). There are different change management models which can be utilized by the organization while implementing changes…

    • 2685 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Academic Advisor

    • 1566 Words
    • 7 Pages

    Rabin.J.(1999) Organizational Downsizing:An Introduction. Pennsylvania State University-Harrisburg School of Public Affairs, Vol. 2, No, pp.39-43…

    • 1566 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    pacific brand

    • 5578 Words
    • 23 Pages

    The industry’s products/service may no longer be useful to consumers as they have replaced by newer technology;…

    • 5578 Words
    • 23 Pages
    Good Essays
  • Good Essays

    Like it or not, the changing economy will necessitate drastic reorganization possibly due to downturns in the economy. Lewin 's model could be used by managers to more efficiently implement any organizational changes. For example, suppose that a firm is facing the prospect of downsizing due to a slow market. In the first step, unfreezing, senior management could inform all employees via the company intranet as well as through informal "Townhall" style meetings of the serious economic challenges facing the organization. Input gathered from employees as well as from internal audits would then be made available to all employees. The second step, change, would then be implemented. Most likely in the form of a reorganization involving the elimination of some positions. In the final step, refreezing, intra-organizational adjustments would be made to accommodate the new organizational work flow. Any employees who have been terminated could be offered post-employment retraining or vocational assistance. Most importantly,…

    • 907 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Bibliography: Gogia, Sunit. IBM Corp; a Trusted Brand and an Unrivaled Product and Services Portfolio. Tech. Morningstar, 17 Mar. 2010. Web. 15 Apr. 2010. Holt, Adam. Microsoft PC 's, Servers & Execution Point to Solid Results. Tech. Mogan Stanley Research North America, 15 Apr. 2010. Web. 15 Apr. 2010. Huberty, Katy. IBM; A Solid Quarter with More Improvements to Come. Tech. Morgan Stanley Research North America, 20 Jan. 2010. Web. 15 Apr. 2010. IBM Annual Report. Rep. Armonk: RR Donnelley, 2009. Print. Microsoft Corporation Annual Report 2009. Rep. Redmond: Microsoft, 2009. Print. Smith, Thomas. Stock Report; IBM Corporation. Tech. Vol. April 10. New York: McGraw Hill, 2010. Print. Standard & Poors. Spiceland, J. David, James F. Sepe, and Lawrence A. Tomassini. Intermediate Accounting. Boston: McGraw-Hill/Irwin, 2007. Print. Yin, Jim. Stock Report; Microsoft Corporation. Tech. Vol. April 10. New York: McGraw Hill Company, 2010. Print. Standard & Poors.…

    • 5491 Words
    • 22 Pages
    Powerful Essays
  • Satisfactory Essays

    Measuring

    • 443 Words
    • 2 Pages

    Because of cut spending Morgan Sindall will react in different ways. They will have less projects, because there will be less opportunities to get more money and more profits maybe they won’t have that much employees working for them so they could save up…

    • 443 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    long been touted as a way to increase efficiency and decrease costs. The problem faced when…

    • 1547 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    improved. At present, the top 50 manufacturers in this industry only take about 50% of…

    • 427 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Downsizing: The downward migrations of business applications are often from mainframes to PCs due to low costing of workstation. And also today’s workstations are as powerful as last decade’s mainframes. The result of that is Clients having power at the cost of less money, provides better performance and then system offers flexibility to make other purchase or to increase overall benefits.…

    • 2718 Words
    • 11 Pages
    Powerful Essays