MGT420 Final Study Guides

MGT420 Final Study Guides - Chapter 6: Organizational Form...

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Chapter 6: Organizational Form and Structure With increased competitive pressures, an uncertain political climate, and the rapid pace of change in all sectors of the economy, U.S. companies need all the help they can get. Among other things, market pressures compel businesses to continuously look for ways to lower their costs and increase their revenues. One way that managers lower costs is to reduce the size of their workforce. This often results in events known as terminating, downsizing, rightsizing, or getting the pink slip. A quick review of business headlines from the last decade conveys a stark picture: “American Airlines Cuts 7,000 Jobs, ““United Slashed 9,000 Jobs in Bid for Solvency,” “IBM Laid off 15,600 in Second Quarters.” Indeed, almost 1.5 million workers were laid off in 2002. And these layoffs came on top of 1.96 million terminations in 2001. While layoffs slowed from 2003 through 2006, few companies seem eager to begin replacing jobs they had eliminated. And those that are hiring are doing so with caution and deliberation. Industries such as telecommunications and auto protection have been especially hard-hit, with lower-paid workers suffering the most. Surveys also indicated that many firms in these sectors are likely to make additional layoffs, and few plan to increase hiring dramatically. This period of job cuts, coupled with higher productivity and better use of automation, has made U.S. firms more efficient. But at what price? The remaining workers, who must learn new tasks and work harder to replace their laid-off colleagues, are prone to stress. Hamilton Beazley, a management consultant, calls such additional duties ghost work . He describes ghost work as challenging for employees, saying, “It can be totally demoralizing and can cripple the individual as well as the organization.” Not surprisingly, most workers are not pleased with having to pick up the slack for laid- off coworkers. Some workers refer to ghost work as speed up , because each remaining worker has to work harder, or stretch out , because they have to put in longer hours. Land Windham, a labor spokesperson, says, “ They call it productivity,” referring to management. Given the uncertain job market today, however, many workers are willing to endure the stress and discouragement of ghost work. Computer maker Dell recently laid off 6,000 of its 40,000 workers, allowing the firm to cut personal computer (PC) prices and increase sales and profits. A long-time employee says, “A lot of us are unhappy, but what are we going to do—go somewhere else?” The danger for employers is that, if the job market improves, many disgruntled workers may do just that. In Chapter 5 we discussed the human resource planning process and noted that an
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This note was uploaded on 01/07/2012 for the course MGT 420 taught by Professor Millikin during the Fall '08 term at ASU.

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MGT420 Final Study Guides - Chapter 6: Organizational Form...

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