Employees expect that all parties will honor their explicit and implicit obligations. Distrust occurs when these obligations are not met or when the parties have different expectations regarding the obligations. When downsizing is employed as an organizational strategy, it focuses on economic goals over the promotion of commitment, and, as a result, the employees view the strategy with distrust.
John A. Challenger notes, "It may be unrealistic to expect intense loyalty on the part of the worker when in many instances the employer cannot promise loyalty in return. The current spate of mergers in the banking, media, utilities, and other industries major re-engineering efforts, and downsizings all have weakened the ties that spur employee commitment and productivity." Frederick Reichheld states, "The great betrayal of American workers is the failure of companies to let them know how much value they are creating, versus how much they are costing."
a. In your opinion, does the achievement of high-quality operations mandate that a firm treat its employees ethically? Discuss.
b. Discuss how perceptions by employees of their employers mesh with the open-book management requirement to have honest exchanges of information between employees and managers.