You are the manager(s) charged with reducing high operating costs. You have been instructed by the CEO to eliminate 25 percent of the company’s work force, both managers and employees. You also must manage the layoff process and then find a new way to allocate authority in the company to increase efficiency.
Some managers charged with deciding which employees should be laid off might decide to keep the employees they like and who are obedient to them, rather than the ones who are difficult or the best performers. They might decide to lay off the most highly paid employees. When redesigning the hierarchy, they might try to keep most power and authority in their hands. Think of the ethical issues involved in layoffs and organizational design and answer the following questions:
1. What ethical rules should managers use when deciding which employees to terminate?
2. What ethical rules can help managers to best allocate authority and design their hierarchies?
3. How can the use of ethical principles help managers make the layoff process less painful for employees?
4. What effects do you think the way the layoff is managed will have on the employees who remain?