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BUSINESS SCENARIO Name Instructor Course Date Business Scenario As market conditions keep on changing, an organization needs to carry out adjustments to order to acquire a competitive edge. Deployment and use of human capital are one of the aspects that companies change in an effort geared towards execution its strategy. The organizations leverage on skills and efficiency when designing an intended change. A company’s reputation, as well as capacity for skills, comes under threat when staff cuts take effect. According to Gittell et al. (2005) layoff as a form of organizational restructuring during times of crisis has a detrimental effect on performance of an organization. These include: (1) Shattering interpersonal relationship; (2) Limitation of sharing of information; (3) Upsurge in formalization, conservatism; (4) Pent up anger and increased conflict; (5) Dwindling teamwork including cooperation and voluntary turnover. A no lay off approach confers benefits like maximum employee loyalty, increased productivity and prerequisite innovation needed for recovery. Additionally, shunning layoff results in quick recovery of stock prices, which serve as an indicator of resilience. Depletion of the relational reserve due to layoffs ignites detrimental effects. To keep off the idea of personnel reduction, the airlines had to possess the financial ability to overcome short-term losses. Maintenance of low levels of debt before encountering a crisis, coupled with cash on hand supply being adequate equips an organization with the necessary financial reserve needed to avoid whittling down of the staff numbers. A conservative approach to business helps in the building of
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