The business is growing continuously and so is the competition. To discuss the issues, the World Economic Forum gathers annually in China. The challenge for nascent businesses has led many to consider downsizing or even shifting their business where costs are lower. There are five management stages when a closure or downsizing of an organization is planned.
Stage 1: Managing corporate band name/legacy
There are two prime concerns in stage 1. The first concern for downsizing a business is to plan a management decision such that everyone is convinced for the need to downsize. The second concern is to plan for better communication so that the brand name retains its reputation in the market and among consumers.
Stage 2: Managing communications
The second stage consists of three communication strategy concerns. First is to plan about announcing the closure to the stakeholders. Second is concerned about the purpose of closure. The third issue was to provide regular communications about the process of closure.
Stage 3: Managing closure
Stage 3 has five issues to be dealt with. First is to plan production output which is important for employment level at the time of downsizing. The second concern is about voluntary or compulsory separation policies and evaluations of keeping those employees necessary during production run-down. Third is to keep those people who are skilled in factory closure management. The fourth is to plan production capacities from announcement till final closure. Lastly, design a plan to make the production process as simple as possible.
Stage 4: Managing investment in employees
There are four concerns in stage 4. Firstly, all the employees should be adequately counseled; secondly, managers are trained for new tasks; thirdly, the remaining employees, or survivors, are trained; lastly, the employees turned out are helped in getting another job.
Stage 5: Managing continuity of operations
Stage 5 consists of three aims inclosure management. First is to develop a leading team which is skilled to perform various tasks. Then an agreement is made with employees to carry out tasks of varied nature efficiently. Lastly, trade unions and employees are involved in the closure process.
The managers should deal the employees empathetically so that even at adverse situations in a company, a positive outcome is achieved. In downsizing business or any other change in business, it is very important that the leaders keep workers motivated throughout the process.
CMI, Management Articles of the Year (2012) Rethinking change: downsizing businesses, changing behaviors[online] available from