Reference no: EM132814302

Chapter 5 --- Case Study

Russ Grumet is CSO of a company that is employing an in-house guard force, rather than employing an outside contract guard force. Since being hired two years ago, Russ and his boss have had several disagreements concerning security issues. His boss called Russ to his office and told him that the company will announce on that day a downsizing. One of the first departments to be let go in its entirety would be the security department. The company will switch to a contract guard force, using a lesser number of security officers. Included in the downsizing is Russ. His boss, in an unusual display of friendship, suggested that Russ form a guard company and bid on the contract to hire the present guard force. "Many of the guards we hire now will most likely be willing to work for the contract company, especially if you continue to be in charge," he told Russ, and then added, "The company will, of course, reduce the per hour rate of the contract guards, and if any fringe benefits are provided, such as medical coverage and holidays, will be the responsibility of the contract company." He told Russ the solicitation of bids would be sent out tomorrow and if Russ were interested, he would receive an invitation to bid. The boss added, "But don't expect any special consideration because this is strictly a business decision aimed at saving money."

To the student: What options does Russ have? What option should he take, and why?