Problem: Making Difficult Decisions in Hard Times

Form groups of three or four people, and appoint one member as the spokesperson who will communicate your findings to the whole class when called on by the instructor. Then discuss the following scenario:

You are on the top management team of a mediumsize company that manufactures cardboard boxes, containers, and other cardboard packaging materials. Your company is facing increasing levels of competition for major corporate customer accounts, and profits have declined significantly. You have tried everything you can to cut costs and remain competitive, with the exception of laying off employees. Your company has had a no-layoff policy for the past 20 years, and you believe it is an important part of the organization's culture. However, you are experiencing mounting pressure to increase your firm's performance, and your no-layoff policy has been questioned by shareholders. Even though you haven't decided whether to lay off employees and thus break with a 20-year tradition for your company, rumors are rampant in your organization that something is afoot, and employees are worried. You are meeting today to address this problem.

1. Develop a list of options and potential courses of action to address the heightened competition and decline in profitability that your company has been experiencing.

2. Choose your preferred course of action, and justify why you will take this route.

3. Describe how you will communicate your decision to employees.

4. If your preferred option involves a layoff, justify why. If it doesn't involve a layoff, explain why.