Boral Downsizing and Redundancy of Employees - Research Paper Example

? Media Issue:” Boral Layoffs Media Issue:” Boral Layoffs Whenever there is a threat, for instance, possible war, a weather emergency or even an uprising, it is the media, whether print or electronic, and more recently the internet which people look upon to get information. Such decisions help the people make life-saving decisions such as home evacuations and other contingency measures. Various stakeholders such as disaster management officials also look upon the media to pass useful information which assist in averting adverse effects to the citizens. Consequently, the basis of defining media issues should and will always revolve around conveyance of vital, lifesaving information to the general populace in a responsible, fact-based manner which is not just strong enough but also convincing enough to motivate them to take appropriate action without subjecting them to risks. Way back in in 1992 when Hurricane Andrew paid a visit to south Florida, the residents in awe as miles and miles of traffic evacuated the people. Nonetheless, persons who missed the media report, had no information as to who was evacuating who and where. Such underlies the importance of the media and highlights what constitutes a media issue. The article “Boral demolishes another 700 jobs” highlights a major societal issues and as qualifies as a media issue. It looks at two major public interest areas hit by crisis, thanks to economic recession. These include the employment and the housing development sector. More often than not, every member of the public has interest in knowing the changing employment trends as well as the changes affecting the housing sector. These are both areas which directly touch on the day to day life of the citizens. What makes these issues of interests to the media is the public interest they elicit. The report for the case witnessed in Boral and the possibility of job losses, it is indicative of the hard economic times and spells a possibility of other related or even unrelated industries follow trend to salvage themselves. It reveals information which could have a rippling effect across the local divide. In a related piece, Wheeldon (2012) highlights not just Boral but also brings in Fletcher, both of which are construction related industry. This is a warning to the public of negative effects within the industry and the need to take contingency measures. Public relations have a lot to do with communication of occurrence to the general public. It helps the public get a clear picture of some special occurrence within an organization and in most cases attempt to justify the actions. This is summarized in the statement, “When a company spends hundreds of thousands or even millions of dollars to sponsor an event, it seems rather foolish to me not to spend the additional relatively small amount required to tell people you're doing so. Public relations are the final ingredient required to ensure the success of the buy; to fail to use PR seems kind of like buying a car without the engine; it still looks pretty but it won't go very far (Cox & Avila, 2008).” In general, it focuses on justifying an action taken by an organization more especially if the action taken touches on the lives of the public. In this case, the reported incident reports loss of employment to hundreds of employs and probably other many who directly relay on the ones who lose their employment. Other than the loss of employment, it justifies its position and explains that the cut will not affect its production as it will focus on areas where redundancy has been recorded in the past (Kylie, 2013). This is what makes it public relations. It explains a situation, justifies the situation and explains the possible impact of the situation. A number of public concern issues are raised in the article. Primary ‘publics’ concerned with the issue A number of stakeholders are will find interest in the communications made in the article. The first groups of interested parties are the employees. The employees are directly affected by such news. Both the laid off employees and those who remain often face some psychological trauma if the process is not well addressed. In this case, it is no different. Additionally presented are a number of issues which are of interest to the employees. To begin with are the departments where the effect will hit. There is a clear indication of exclusion of some departments and specified the areas where redundancies have been recorded and hence will be affected by the layoffs as the Boral sheds off more employees. Talking to the media, the company CEO said, "The review is purposely not focused on sales functions or operational roles and therefore will have no impact on the level or type of services provided to customers (Kylie, 2013)." This is an extremely precise statement which directly communicates to the employees in relation to will and who will not be affected. Further, the piece offers explanatory reasons to the employees making them understand the reason behind the layoffs. The other group of stakeholders who are directly interested in the communicated information are the investors. More often than not, investors like to be kept in the light; more especially when their investment is at risk (Cascio, 2003). In a message which will be of interest to the investors, it is stated that “Boral expects the redundancies to cost it $60 million in 2012/13, but to give it annual cost savings of $90 million once the changes are implemented (Kylie, 2013).” This is a component which justifies the benefits likely to be derived from restructuring. There is further acknowledgement that the move being reported in the article positively impacts on investor confidence. The article states that, “Investors reacted positively to news of the restructure, sending Boral shares 44 cents, or 10.1 per cent, higher to $4.80 - a 20-month peak (Kylie, 2013).” The general public is as well interested in the information provided in the article. To begin with, the general population must wonder how the change depicted in the report will affect production quality at the plant. Klein (2011) notes that irrespective of the challenges which face the construction related industries, the public would not at any time be willing to accept reduced quality. Consequently, if at any time there is a notion that the quality might be affected by the change, the general public could shy away from the company’s products and as a result the company could find itself in deeper trouble. There is further clarification of quality to the general public, or rather would be consumers states that, “the review is purposely nor focused on …, and will therefore not impact on level of type of services provided to customers.” Regulatory issues are also concerned with the reported information in the article. More often than not, any changes which affect employment of a nation’s citizens will be of interest to the government which is the regulatory authority. Similarly, the interest of the government lies ion performance of the organization as it could have a rippling effect on economy in general. It is therefore the responsibility of the government to ensure the organizations do not go under. The first issue of primary public concern is the cut in employment. Employment is a serious national issue and often elicits lots of discussion and concern amongst stakeholders. According to Klein (2011) the construction sector is amongst the major employers in both established and upcoming economies. Any negative effects within the industry are likely to impact on other areas of the industry and hence the economy (Tony, 2001). It is amongst a series of many others highlighting the deteriorating employment situation in Australia. Employment cuts are on the rise in many places of work across the nation, reflecting not just the impact of the slump across the globe but also the employer’s drive, supported by the labor authorities to restructure their operations and salvage themselves from the prevailing challenges. It is important to mention that although it purely focuses on the construction industry, it reports occurrence in all the major departments and industry across Australia. According to Church (2012), the situation is even worse in the construction and he says, “The situation is even worse in the construction industry. AIG’s monthly report on the health of that sector, released this week, found that it contracted for the 25th consecutive month. Following collapses of major companies, such as Hastie Group in May, most of job losses are occurring in smaller companies and among self-employed sub-contractors (Church, 2012).” Other than employment, also highlighted is economic impact on the industry. More often than not, economic slumps affect various sectors of the economy. This includes the construction sector. In the article, the current hard economic times facing Australia just like the other parts of the world are highlighted with emphasis on its impact to the construction sector, more especially it focuses on the slump in the housing sector. The piece also brings to fore the importance of restructuring not just to salvage the company but also as goodwill and a sign to the investors that profitability of the company will not be put into jeopardy. Most investors often demand restructuring in instances where corporations are faced with financial turmoil (Alkhafaji, 2011). This often involves relocation of employees, redundancy, lay off and retirement of employees with accompanying packages. In the recent times, a new word, “survivor syndrome” has also emerged in management of literature meant to address the phenomenon (Marimuthu et al., 2009). Research has indicated that those psychological effects on employees who are retained employees are not any different from those experienced by the employees who are made redundant. Present also is a justification which shows targeted areas and as such avoids psychological problems experienced those who remain. Additionally, various researches have in the past focused on financial and legal issues which may arise during the process. The issue of corporate identity and reputation also emerges. The CEO comes out to explain the situation and address various issues emerging from the incident. This is a move meant to present the company’s image positively to the public and as such avoid issues which may portray the company negatively. By selecting to operate, an enterprise adopts various moral as well as legal responsibilities (Balmer & Gray, 2000). This generally falls into distinct categories which include environmental, social or economic categories. As technology changes and advances with time, the role of mass media continues to rise at an exponential rate in communicating organizational endeavors. The media has enormous effect of corporate identity formation through reinforcement of a corporation’s image and reputation to the public (Bromley, 2001). In the recent times, global media and the increase of business news has resulted into creation of public representation of the company’s to largely influence construction as well as deconstruction of various company identities more than has been witnessed in the past (Du Gay, 2000). Like is the case in the piece, many corporations proactively engage in creation of media attention and make use construction of identity as well as strengthening, in addition to re-inventing their images to the public. In the past few decades, various studies focusing on downsizing and redundancy of employees has offered vast literature in management of human resources and more especially in communication of the same. Academic literature mostly focuses on redundancy in the field of human resource management. The paper provides a highlight of an instance where corporations are forced to explore this option as part of its restructuring. In general, it highlights a number of issues which are not just important to the general public but to all stakeholders within the organization. This in essence makes it an important article of public interest whereby the interest of the public lies in the employee’s situation, the interest of public on economic implications, the interest of the public on the general implications of the restructure and how it might affect quality and also the interest of the investors whose funds the organization relies on to be able to manage its affairs in an effective way. References Alkhafaji, A. F. (2011). Restructuring Corporations: Causes, effects, and implications. Quorum books: New York. Balmer, J. M. T. & Gray, E. R. (2000). Corporate identity and corporate communications: creating a competitive advantage. Industrial and Commercial Training, 32 (7), pp. 256–262. Bromley, D.B. (2001). Relationships between personal and corporate reputation. European Journal of Marketing, 35 (3/4), pp. 316–334. Cascio, W. (2003). Responsible Restructuring: Seeing Employees as Assets, Not Costs. The Workplace, 6 (13), pp. 156-157. Church, M. (2012). Job cuts deepen in Australia. World Socialist Website. http://www.wsws.org/en/articles/2012/08/jobs-a08.html Cox, M. T. & Avila, H. M. (2008). Case-Based Plan Adaptation: An Analysis and Review. Department of Computer Science and Engineering: Lehigh University Du Gay, P., (2000). Organizational images and member identification. Administrative Science Quarterly, 39 (2), pp. 239–263. Klein, J. (2011). An insight into the challenges and rising complexity facing the property and construction sector. Construction Journal, 14 (4), pp. 123-132 Kylie, W. (2013). Boral demolishes another 700 jobs. The Advertiser State Edition. Marimuthu, M. et al. (2009). Corporate Restructuring, Firm Characteristics and Implications on Capital Structure: an Academic View. International Journal of Business Management, 4 (1), pp. 123-131. Tony, P. (2001). Corporate restructuring: The pitfalls of changing industry structure. Management Decision, 39(3), pp. 197-204. Appendix 1: Job cuts deepen in Australia By Mark Church 8 August 2012 The past week has brought further signs of a deteriorating situation for Australian workers. Job cuts are spreading across workplaces nationally, reflecting both the impact of the global slump and the drive by employers, backed by the Labor government, to restructure their operations. Some of the most severe cuts are taking place in the federal and state public services, as the Prime Minister Julia Gillard’s government slashes spending to produce a budget surplus this financial year, and the states follow suit, imposing their own cuts as tax revenues fall. The Queensland government last week unveiled another 2,000 job cuts in the state’s transport and building services—Translink, Road-Tek and Q-Build. As well as throwing workers out of employment, the cuts will hit services that affect working people, such as maintenance and repairs of social housing. Over the past four months, state government has overseen the elimination of 7,500 public sector jobs, with another 20,000 slated to follow. These cuts follow thousands of public sector job losses in other states—New South Wales (15,000), Victoria, (4,200), South Australia (5,150) and Tasmania (1,898)—and by the federal government (4,228). Thousands more jobs are targeted at the federal level. The Canberra Times has estimated that at least 14,000 jobs will be eliminated from the federal public service during the next three years. These statistical reports provide only a limited picture of the mounting financial and social distress for working people as the Labor government and its union enforcers help restructure the economy to satisfy the demands of the corporate elite. Appendix 2: Responsible Restructuring: Seeing Employees As Assets, Not Costs Abstract Behind most downsizing announcements is a viewpoint that sees employees as costs to be cut. Another viewpoint, one that is rarely expressed, sees employees as assets to be developed. These viewpoints are important, not just because they may influence an executive’s decision to downsize, but because they usually influence how employees see themselves – and perform. As this author points out, it’s almost a difference between assets and liabilities. Read More