AZ MANUFACTURING (AZM)

Implementation of Downsizing Exercise



Introduction

AZ Manufacturing Sdn Bhd (AZM) has announced its plan for restructuring. It was founded in 1988; the company has grown from employing about 100 employees in its early days to 650 employees at various factories located in Klang, Rawang & Gurun, currently. AZM specializes in manufacturing & supplying plastic-moulded products to the automotive industry. The “glut” period experienced by the auto industry inevitably has adversely affected AZM. The revenue has dropped more than 50% for the past two business years, and downsizing has been singled out as a “quick-solution” to help the company stay afloat. This paper will focuses on the implementation of the downsizing exercise in the company. AZM decided to formulate a downsizing strategy to help out the company.

As a Human Resource Director of the company, first of all I would go for the cause of the problem. Because recognition of the problem would be helpful to formulate strategies for which company has to move on. After identifying the cause, downsizing strategy should be followed to help the company to cut down its expenses and reach at breakeven, and then make it profitable. The global financial crisis has led to a broad wave of job cuts and staff reductions. The problem became widespread layoffs. Ignorance of the labour law makes it vulnerable in the first place laid-off employees, so we'll try to tell about the peculiarities of dismissal for downsizing or staff in more detail (Drost & Geringer 2002).

AZM Strategic Planning

To operate successfully AZM requires being willing and able to reduce the number of employees or close a subsidiary when it is no longer viable. The pressure of technological change and globalisation and such natural-economic forces have often led to layoffs too. If the company is facing loss, than chances are there that motivational level of employees goes down, which would ultimately affect the performance of employees, and company would be unable to pass the state of loss. In order to become a profitable business a company needs highly motivated workforce, and to keep them motivated company should make them feel as they own the company (Dowling & Schuler, 1994).

Strategic change needs to mould well and seep in with the existing employees working within the organization; new technology and new work process together, and management of organisational culture is essential to succeed in business. This way, managing human the current employees would be easier for managers, leading to aid in creating effective, necessary and important changes in the overall efficiency of the employees, thereby implementing changes with reference to organizational context. It supports that the single most critical and nerve-wrecking obstacle of strategic change is not coping with technology or work process, but it is coping with people currently admitted in the organization. Furthermore, leaders are responsible to share organisation's vision clearly to subordinates. Involvement in strategic change process develops motivation among staff and needs them to have a commitment in this ...