What options might Newell employ in its downsizing decision

Assignment Help HR Management
Reference no: EM133377146

Case 9. Newell's Decision to Downsize: An Ethical Dilemma

A particular issue in business ethics is: "What exactly does the term ethics mean?" Various writers have described ethics as rules that govern behavior, desired societal values such as respect for justice, or accepted principles of right or wrong. One author noted, "While laws concern what we must do, ethics concerns what we should do."

In the practice of HR, managers and supervisors are continually faced with ethical dilemmas regarding the fair and equitable treatment of employees. Ethical choices abound in areas such as recruitment and selection, employee privacy, whistle-blowing, sexual harassment, and diversity or affirmative action. An important ethical dilemma faced by managers today is the fair and correct way to downsize organizations. The decisions involved in downsizing a workforce are complex and, as one manager stated, "gut-wrenching."

The Need to Downsize

Newell Corporation is a medium-sized manufacturer of navigational systems for commuter and larger airplanes. The company operates two plants-one in Atlanta, Georgia, and the other in Norwood, California. In 2020, the Norwood plant employed 273 employees, most of them engaged in the manufacture and technical support of company products.

Newell is regarded as an excellent place to work by its employees and within the surrounding communities. Employee morale and loyalty have always been high, and job satisfaction studies conducted by the company consistently rate the organization as a fair and equitable place to work. The company's HR policies can be described as proactive and progressive. With its positive reputation, Newell has been able to select new employees from a large pool of job applicants.

One cornerstone of HR policy has been to use the principle of seniority when training, assigning, transferring, and promoting employees. Additionally, with Newell's emphasis on employee retention, employees have experienced and come to expect long and steady employment. Prior to 2018, Newell had never downsized its workforce. Employment growth at the Norwood facility had been moderate and steady.

The racial composition of the company has been predominantly White, for two reasons. First, the racial composition of the company's local labor market has historically been predominantly White. A review of the company's federally required EEO-1 report showed that Newell had few employees in each of the racial-ethnic minority categories listed. This is true for both hourly and managerial positions. However, since then, the demographic characteristics of the local labor market have changed dramatically to include more Hispanics and Latinx, African Americans, and Asian Americans.

In 2014, Newell experienced a large increase in the demand for its products. To meet customer orders, the Norwood plant hired 27 new manufacturing assemblers and 14 new technical support technicians. With the increased diversity of the external labor force, plus the desire to increase the diversity of its internal workforce for both business and ethical reasons, 34 of the 41 new hires were members of underrepresented groups. The following is an excerpt from Newell's statement of vision and values published in July 2019:

"Newell Corporation believes that a work environment that reflects a diverse workforce, values diversity, and honors the worth of its employees benefits the company, its customers, and its employees. Employment decisions will be made on these principles while also considering the efficient and effective operation of the organization."

Because many of the new employees from underrepresented groups needed to be trained to do the company's manufacturing and technical jobs, the firm spent approximately $1.7 million on entry-level skills training. The integration of these employees into the Norwood facility was seamless and without racial tension.

In 2019, sales for Newell's products once again followed historical patterns. Unfortunately, sales then unexpectedly took a sharp downturn: a 12 percent decline in 2020 and a 23 percent decline in 2021. The causes for the decline in sales were attributed to the COVID-19 global pandemic. The fear of traveling hit the entire world at once; travelers weren't traveling, airline companies either weren't filling flights or weren't flying them at all. In turn, there was a decline in the market demand for the products made by Newell and its competitors.

In February 2021, Tom Malcom, Norwood's director of HR; Steven L. Davis, corporate vice president for manufacturing; and Mary Umali, Norwood's plant manager, decided to downsize the workforce at the Norwood facility. Specifically, they decided to lay off 37 manufacturing employees and 11 technical support personnel. The difficult question faced by senior management was how to lay off employees in a manner that would be fair and equitable to individuals and legally defensible while maintaining the integrity of Newell's HR policies and the productivity of the Norwood plant.

Questions

1. What is the ethical dilemma faced by management in this case? Explain.

2. What specific problems might Newell face in its downsizing decision?

3. What options might Newell employ in its downsizing decision? Explain.

4. How would you downsize the workforce at the Norwood facility? Explain.

Reference no: EM133377146

Questions Cloud

Definition describe the curriculum used in classroom : From an educational source, define research-based curriculum. Using this definition describe the curriculum used in the classroom.
What is the size of your profit or loss if the futures price : What is the size of your profit or loss if the futures price is indeed an unbiased predictor of the future spot price and this price materializes?
What is the ranking of the bahamas in relation : Based on your review, what is the ranking of The Bahamas in relation to the Human Development Index (HDI) and at least two (2) other metrics that you have
What factors will determine how much government spending : What factors will determine how much government spending (G) is included in Japan's fiscal stimulus package? Japan's government will compile a stimulus package
What options might Newell employ in its downsizing decision : What is the ethical dilemma faced by management in this case? What options might Newell employ in its downsizing decision?
What are some questions anne schippel might ask dry supply : What are some questions Anne Schippel might ask dry supply to better understand the operating cash flows of the business?
Calculate the unemployment rate in country x. : Calculate the unemployment rate in Country X. Show your work. Calculate the labor force participation rate in Country X. Show your work.
Why is it important to learn tricks like shortcuts in excel : Why is it important to learn tricks like shortcuts in excel? How is a program like excel better than doing math by hand or with a calculator
Explain how improved communication can resolve conflict : Explain how improved communication can resolve conflict, and strengthen interpersonal relationships.

Reviews

Write a Review

HR Management Questions & Answers

  Coordination of benefits

Question 1: Coordination of benefits refers to: Question 2: A withhold is a feature for payment to health care provider that:

  How management or a union bargaining power might be affected

During an economic recession, discuss how management's or a union's bargaining power might be affected. Give an appropriate business example to illustrate.

  Outsourcing relocation services-role of cade jackson

You are Cade Jackson, the Human Resources Vice President (HRVP) of Noles Brothers, a medium-size, privately owned, solar engineering company. Noles designs and

  Describe how labor relations affect a public administrator

Describe how labor relations affect a public administrator and the role of financial management throughout the policymaking process.

  Recent trend for training in the uk

Which fiveSelect one or more: of these are potential problems in the recent trend for training in the UK to concentrate on "soft skills" such as communication a

  Determine the major impacts of risk

Determine the major impacts of risk that the team needs to understand for the project to be successful.

  Job require engaging in emotional labour

Does sam and tom job require engaging in emotional labour? explain why sam and tom react differently to the same environment.

  Discuss how equal employment laws apply to personnel

explain how equal employment laws apply to personnel recruiting activities.discuss five main things you would do to

  Human resources for niche hotel group

Monique Johnson was thrilled about her new position as vice president of human resources for Niche Hotel Group (NHG).

  Human resource 23 of time spent on strategic role why hasnt

human resource 23 of time spent on strategic role. why hasnt it increased more?research by lawler and mohrman 2003

  Describe one communication theory

Describe one communication theory that can be applied in a health and human services setting.

  Labor relations - paid vacation

Labor Relations: Paid Vacation - Why do employees today place such a high priority on paid time off

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd