Competitive pressures are the norm in business. Lexus automobiles (made in Japan) have cut into the sales of Mercedes Benz (a German company), General Motors’ Cadillac Division, and Ford’s Lincoln Division. Dell, Gateway (now owned by Acer, Inc.), and Compaq computers (now owned by Hewlett-Packard) have siphoned business away from IBM. Foreign steelmakers have reduced the once-massive U.S. steel industry to a fraction of its former size.
Indeed, corporate downsizing has occurred on a massive scale. During the past few years, companies mentioned here have pared down their plant and equipment, laid off employees, or restructured operations.
Requirements
1. Identify all the stakeholders of a corporation and the stake each group has in the company. A stakeholder is a person or a group who has an interest (that is, a stake) in the success of the organization.
2. Identify several areas of deficiency that may indicate a corporation’s need for downsizing. How can downsizing help to solve this problem? Discuss how each measure can indicate the need for downsizing.
3. Debate the downsizing issue. One group of students takes the perspective of the company and its stockholders, and another group of students takes the perspective of other stakeholders of the company.