Downsizing interventions and evaluation: student paper

By | April 19, 2015


1.0 Introduction 4

1.1 Report purpose 4

1.2 Methods 4

1.3 Dimension 4

1.4 Limitations: 5

2.0 Company Profile 5

2.1 Background 5

2.1 Vision 6

2.2 Personnel 6

2.3 Characteristics 6

2.3.1 Business focuses 6

2.3.2 Superiority 7

2.3.3 Target market 7

2.3.4 Current problem 7

3.0 The Star Model on NDI’s evaluation 8

3.1The Star Model 8

3.2 Performance evaluation 10

3.2.1 Characteristics 10

3.2.2 Strategy 11

3.2.3 Structure 12

3.2.4 Processes 13

3.2.5 Rewards system 13

3.2.6 People practices 13

3.2.7 Conclusion 14

4.0 Downsizing 15

4.1 Reasons for downsizing 16

4.1.1 Concept 16

4.1.2 Reasons for downsizing 16

4.2 Risks 20

4.2.1 Employee retention 20

4.2.2 Survivor syndrome 21

4.2.3 Image and relationship destroying 21

4.3 Measures on countering risk 22

4.3.1 Communication and negotiation 22

4.3.2 Dignity and good treatment 23

4.3.3 Training and empowerment 23

5.0 Downsizing interventions and evaluation 24

5.1 Layoff and outplacement 25

5.2 Early retirement and voluntary resignation 26

5.3 Reducing working hours and wages 27

5.4 Merge units 28

5.5 Unpaid holidays 29

5.6 Cross training 29

6.0 Political issues and solutions 30

6.1 Political issues 30

6.1.1 Bad-mouth 30

6.1.2 Employee turnover and low morale 31

6.1.3 Confidentiality leakage 32

6.1.4 Disclosure of sensitive information 32

6.2 Solutions 33

6.2.1 Education and communication 33

6.2.2 Early notice and satisfactory compensation 33

6.2.3 Empowerment: 34

6.2.4 Facilitation and support 34

7.0 Conclusion 35

8.0 Reference 37


Figure1.0 Star Model………………………………………………………. …………8

Figure 2.0 China Unemployment Rate……………………………………………….17

Figure 3.0 China Inflation Rate………………………………………………………18

  1. Introduction

1.1 Report purpose

It is aimed to analyze and evaluate current problems and dilemma of New Dynamic Institute in China. And via a thorough analysis, we will recommend some suitable means to facilitate this organization to remove problems and improve its performance as well as maintain its popularity in Chinese education market.

1.2 Methods

The data and information mentioned in the report are mostly from New Dynamic Institute via the assistance from its employees, customers and some internet sources. And meanwhile, the primary data collection measure is adopted to collect information with the help of questionnaires, interviews and so on.

1.3 Dimension

In this report, we will high lighten the measures and practices of New Dynamic Institute adopting to facilitate the organizational change. And to better fulfill this task, we will have a deliberate analysis on its current problems and then come up with some proper measures to assist the organizational change.

1.4 Limitations:

There are some limitations existing in this report as well. due to the time limit, these recommendations offered to New Dynamic Institute may mostly belong to the short term suitable ones which may work more well for the transitional period rather than the normal time.

  1. Company Profile

2.1 Background

As an excellent English language training Chain Corporation in mainland China, New Dynamic Institute (NDI) has been enjoyed a good reputation and popularity among Chinese English learners, which was founded in 2004 on the basis of proper integrating English teaching experiences from more than 70 countries with 20 years’ successful experiences of running English training centers. Till this year, New Dynamic Institute has launched nearly 30 training centers all around mainland China with millions of students.

2.1 Vision

The primary vision of NDI is to offer Chinese students with proper and effective English learning strategies to enable they to learn English in a more easy and joyful manner with the support of great confidence and enthusiasm towards English learning.

2.2 Personnel

There are about 41 training institutes in mainland China with more than 2000 employees in seven divisions.

2.3 Characteristics

2.3.1 Business focuses

Its main training focuses include English teaching and training in areas of career, business, going aboard, interview, hospitality management, telephoning, meeting, and examinations such as CET 4, CET 6, IELTS, TOFEL, and TOEID and so on.

English is increasingly the language of communication in today’s financial world and the specific vocabulary needed to operate in this world is covered comprehensively in NDI’S Banking English – in an interesting and active way. Through a variety of stimulating activities and exercises students will learn financial terms and expressions which are used in the world of finance and international banking.

2.3.2 Superiority

The major superiorities of NDI lie on its high quality and well trained staff, comfortable study environment and nice location.

2.3.3 Target market

The target populations for New Dynamic Institute’s business are these non-English speakers in China mainland, who prefer to enhance their English speaking, listening, writing, and reading ability fast and effectively with a receivable price.

2.3.4 Current problem

The current problem of NDI is that there register number of new students increase while the renew rates of these old students decline.

3.0 The Star Model on NDI’s evaluation

As the consultant for NDI from external, the primary task is to investigate the current situation of NDI. And based on the characteristics of this organization, we recommend using the star model from Galbraith, Downey and Kates (2002) to diagnose its current performance and problems as the following mentioned.

3.1The Star Model

According to Galbraith, Downey and Kates (2002), when an organization align the five major components of the so called organizational design, it will be at its most effective. In this model as in figure 1.0 , there are five major components including strategy, structure, processes and lateral capability, reward system as well as people practices.

Figure1.0 Star Model

figure 1.0

Source: Galbraith, J. Downey, D. & Kates, A. 2002, Designing dynamic organizations, Amacom, New York,

The first component-strategy is often emphasized primarily due to its importance as the cornerstone. It is regarded as the formula for winning for an organization, which specifies the vision, direction and competitive advantages of the organization. (Dick 2002)

The second concern of this model is on the structure aspect. It refers to the organizational determination on power placement and authority, which include four kinds of considerations such as specialization, shape, distribution of power and departmentalization. (Dick 2002)

The third concern is the processes and lateral capability, which refers to either formal or informal processes to coordinate activities and practices throughout the entire organization (Galbraith, Downey & Kates 2002).

The fourth concern lies on the reward systems of an organization that is aimed to align staff’s actions with the organization’s objectives with the help of motivation and incentive to complete organizational strategic direction (Dick 2002).

The last one is people’s practices which emphasize the importance in governing human resources issues such as staffing and selection, performance feedback as well as learning and development (Galbraith, Downey & Kates 2002).

3.2 Performance evaluation

3.2.1 Characteristics

To begin with, we will have a discussion the characteristics of New Dynamic Institute at first to have a better understanding of this organization. At first, it is an English language training institute in mainland china on the basis of proper integrating successful experiences of English teaching with running English training centers. Secondly, it has many divisions in this organization including marketing department, consulting division, technical division, human resource division, academic division and so on. And the academic division of NDI is made up of two separate departments including corporate training department and individual training department. And then, the corporate training department has a major focus on the training programs for companies while individual training department has the focus on the individual training programs. And the two departments are operated separately. Moreover, there is a very common phenomenon in NDI that the number of part time teachers is larger than the full time teachers in the academic division.

Based on these characteristics and the star model above, we will diagnose the current performance of NDI

3.2.2 Strategy

From the obtaining data, we can get that the business vision of NDI is to offer Chinese students with proper and effective English learning strategies to enable they to learn English in a more easy and joyful manner with the support of great confidence and enthusiasm towards English learning. And with the guidance of such kind of vision, NDI is under the direction to open more training centers and gain more market shares from its major competitors Metro International English and New Oriental with the facilitation of better performance.

3.2.3 Structure

The structure of this organization may be not so proper and correct designed. The authority relationship in NDI may be defined as centralized that the leaders in the academic division are seemed to have the absolute discursive power in decision making. Further speaking, the managers both in corporate training department and individual training department are seemed to decide things by themselves without discussion and receiving suggestion from their subordinates which often results in misunderstanding.

Meanwhile, the improper designed structure of NDI is also reflected in the division setting. Although corporate training department and individual training department both belong to the academic division, they are operated respectively with their respective managers. Such kind of designing and setting often leads to arguments and conflicts between the two departments.

Furthermore, the leadership style in this organization is defined as a task oriented one which put the benefit pursuit in the first place (Daft 2008). Such kind of leadership style makes the relationship and working environment a little bit indifferent.

And then the organizational change in NDI hasn’t happened once in the last 5 year.

In short, the structure design in NDI may be not proper enough that there are two respectively operating departments as well as too many part time teachers.

3.2.4 Processes

In NDI the process of communication isn’t effective enough. Although there are meetings hold for employees to summarize and give suggestions both on their individual performances and the entire organization’s performance, the effectiveness of the inner communication still need enhancing. For example, corporate training department and individual training department often have their own meeting respectively and there is seemed almost no proper communication between this two departments even they are in the same division in NDI.

3.2.5 Rewards system

In NDI, proper motivation and incentives for employees are really lack and imbalanced. We find out that too much investment is involved in the marketing department to reward the good performance of the marketing staff while the incentives for the good performance of teachers are really seldom.

3.2.6 People practices

As we have mentioned above, the number of part time teachers are more than full time teachers. And the budget of NDI is often towards the business expansion and marketing part rather than offering training and developing programs for its staff especially for the teachers’ development. The two points lead the learning and training programs in NDI in a shortage.

At the same time, the performance feedback in NDI isn’t appropriate set either. Due to the task oriented leadership style in this organization, the relationship between employees are so harmonious as we expected which become one of the factors resulting in the poor communication such as the performance feedback among employees and employees, employees and their direct boss and so on.

3.2.7 Conclusion

From the assistance of the star model, we developed a diagnosis on the current performance of NDI. And we find that the current problem of NDI is that there register number of new students increase while the renew rates of these old students decline. And the reasons for this problem are in the following.

In the first place, the business vision and strategy may not be suitable designed with the current situation that the economy situation in China isn’t so optimistic with the influence from economy crisis and high inflation rate in its currency (Welch & Welch 2010; Jan 2010)

In the next place, the strategy of talents recruitment isn’t proper enough that the imbalance of part time teachers’ number and full time teachers’ number may enhance the difficulty for the HR department to handle the issues in human resources including training

In addition, the reward system in NDI isn’t appropriate either that lead to a low working morale and poor performance of teachers.

All in all, to better handle the current problem of NDI, we suggest it to downsize.

4.0 Downsizing

Based on the above discussion on the current issues of NDI, we recommend this organization to adopt the downsizing strategy. And in the following a statement on the necessity, risks, and counter- risk means will be offered to help this organization have a better understanding of the importance of downsizing for it.

4.1 Reasons for downsizing

4.1.1 Concept

Stone (2010) told us that downsizing is a kind of restructuring means for organizations and is aimed to achieve greater organizational efficiency by job elimination, closing or selling of a business unit, cost reduction and cost saving. And organizations which adopt downsizing are aimed to increase the productivity by greater efficiency and effectiveness, coping with external pressures such as recessions and economic downturns, technological change as well as increased competitive pressure via greater globalization of business as well (Palmer, Dunford & Akin 2009, pp.99).

4.1.2 Reasons for downsizing

Economic factor

As Cascio (2010) and Palmer, Dunford and Akin (2009) pointed out that the economic pressure such as the economy downturn or financial crisis is regarded as one of the factors contributing to downsizing. In China although the 2008 to 2009’s financial crisis had brought too big destroy to China, its side effect has been influencing the Chinese economy to a certain degree. For example, the high unemployment rate around 4.0% to 4.3 % which even reach a historical high in the first quarter of 2011 as in figure 2.0. The Currency appreciation pressure, high housing price, high inflation rate as in figure 3.0 all put China’s economy is a shadow, which may be not seemed so proper and suitable for NDI to expand the business. Besides the pressures from macro-environment, we have found the renew rate of old students in NDI is low about 50% which indicated the economy pressure from customers have impacted NDI’s business to a certain rate. So the urgent task for NDI isn’t to open more training centers but to maintain its business performance and market share.

Figure 2.0 China Unemployment Rate

figure 2.0

Source:; Ministry of Labor and Social Security the People’s Republic of China,

Figure 3.0 China Inflation Rate

figure 3.0

Source:; China Economic Information Net,

Academic factor

The ineffective communication and seldom cooperation in the two departments of academic division in NDI also hinders the proper and healthy development of this organization. As we notice that the two departments including corporate training department and individual training department both afford the teaching task towards consumers, there is no need to operate the two departments respectively. Because the separate operation may not only cost too much money, time, human resources and so on but also lag the normal development and performance of the academic division. For example, the uncooperative attitudes of the two managers in the two departments, the time wasting in removing their conflicts, disputes as well as misunderstanding all become the factors to hinder the proper development of academic division. So for this division, we suggest downsizing.

Human resource factor

The imbalance in the number of part time teachers and full time teachers is another factor for NDI to carry put downsizing. Although many part time teachers of NDI are from some famous public school, who may have richer professional experiences and teaching skilled than some of the full time teachers, the good performance and prosperity of a business may depend more on its regular employees much. And furthermore, the salaries of part time teachers are higher than full time ones. Based on the two aspects, NDI had better consider downsizing the number of part time teachers and invest some of the saving from the salaries of these laid-off part time teachers to train its full time teachers so as to improve their competitiveness which may contribute more to NDI in the future than invest so much to hire part time teachers including setting up some reward systems for teacher and training program in developing teachers’ professional skills and so on (Wolfgang 2009).

Communication factor

There are two factors resulting in the communication ineffectiveness, one of which is the separate operation of corporate training department and individual training department and the other of which is the bloated body of part time teachers. To enhance the communication effectiveness, we recommend NDI to downsize.

Briefly speaking, the above factors tell us that it is necessary for NDI to downsize to enhance its productivity, save cost and improve performance.

4.2 Risks

Although it is necessary for NDI to downsize due to the current situation, it will bring some risks as well.

4.2.1 Employee retention

Cascio (2002) and Anonymous (2001) reminded us that downsizing may lead to the loss of some vital and gift employees. For instance, when some employees in NDI see their peers especially their friends leaving, some of they may have the doubt on their future in this organization. For NDI without those values employees in it, its productivity and performance in the future may be reduced.

4.2.2 Survivor syndrome

Palmer, Dunford and Akin (2009) high lightened the survivor syndrome caused by downsizing. In NDI, these remained employees may suffer the survivor syndrome. For instance, some of them may have such question to bother them for a long time including why downsizing occurred. Some of them may feel guilty about the fact that they remain while others are unemployed, some of whom are valued by them so much. And some of them may suffer from a low working morale with wondering they are going to loss their job in NDI in the nearly future.

4.2.3 Image and relationship destroying

If NDI doesn’t plan and design downsizing deliberately and properly, it may lead to many issues for this organization including whether the forthcoming downsizing for NDI is worthy and why some people can retain while some have to leave and so on. Lack a proper focus and concern on such issues may result in further deterioration in employer and employee relationships and the image as a good employer for NDI (Morris & Neering 2003; Palmer, Dunford & Akin 2009).

Although downsizing may bring some risks for NDI, it may the best choice for this organization considering its current situation. In the following, we’ll recommend some measures for NDI to minimize the impacts of these risks.

4.3 Measures on countering risk

4.3.1 Communication and negotiation

To communicate changes openly and honestly to shareholders, employees, and other stakeholders is important for NDI. Via the help of proper communication, NDI can open the current market situation and NDI’s situation, future vision and strategy to these inner stakeholders may assist NDI to carry out downsizing more smoothly without too much resistance (Trevino & Nelson 2007).

And then, to better emphasize the necessity of downsizing, we recommend NDI to address the inevitability of downsizing to these inner stakeholders and make them understand they are in the same condition that only cooperating with each other can NDI suffer from the current dilemma and gain a promising future. Via such kind of negotiation with employees and shareholder, NDI may gain more support than resistance (Mishra, Mishra & Spreitzer 2009).

4.3.2 Dignity and good treatment

It is also recommended for NDI to treat employees who lose their jobs with compassion and dignity. And giving an early notice for unemployment to employees and offer them with relative enough time to prepare themselves and find a new job. And then some related unemployment compensation is vital to offer. Such kind of activity may help NDI to minimize these bad effects and some political behaviors from these laid-off people. (Bruton, Keels & Shook 1996, pp. 38-45; Watson 2005, pp. 371-392)

4.3.3 Training and empowerment

To improve the flexibility of NDI towards the changing environment, some training programs and empowerment means are suggested as well.

In the first place, training programs related to psychological counseling are necessary to calm down employees suffering from downsizing, which may enable them to adjust attitudes towards downsizing and themselves and strengthen their self confidence (Stone 2010).

In the second place, Palmer, Dunford and Akin (2009) summarized the reasons why people resist downsizing including dislike of change, discomfort with uncertainty, and perceived negative effect on interests and so on. Based on this, we recommend the empowerment measure to facilitate downsizing. It requires NDI to involve people in the downsizing process as active participants which may remove the worry about the uncertainty and improve employees’ sense of belonging (Abrahamson 2000).

5.0 Downsizing interventions and evaluation

We’ll discussion some interventions of downsizing in the following to help this company to carry out downsizing more smoothly.

As Stone (2010) as well as Palmer, Dunford and Akin (2009) reminded us downsizing as a restructuring strategy for an organization include not all reduce staff number but also eliminate jobs, sell or merge business unit as well as other cost saving means. Based on this idea, we will recommend many downsizing interventions to help NDI save cost and improve productivity rather than only lay off people.

5.1 Layoff and outplacement

As the most widely used intervention of downsizing, lay off refers to sack a certain number of employees to help the organization to save cost (Cascio & Wynn 2004, pp. 425-436). For NDI, we also recommend this means. As there are too many part time teachers, it is evaluated as money wasting and unhealthy phenomenon for the future development of NDI. Based on this point, we recommend NDI to cut down the number of part time teachers as the means of save cost.

And again sacking people in other positions who don’t perform effectively is also suggested. For example, the number of sales consultants, HR assistants, course designers and so on may be too big, NDI can consider a laid off to these people.

Moreover, outplacement can work as complementary means for lay off in NDI to help mollify embarrassing situation faced by these laid offs. It refers to some programs offered by NDI to provide some professional advices on re-employment issues and is aimed to calm down some racial resistant reaction from laid offs (Palmer, Dunford & Akin 2009).

Evaluation: although lay off plus outplacement programs is a good choice for NDI to save cost immediately and remove some resistance as well, it is still regarded as a radical downsizing intervention. It may not only decrease the working morale of some remaining employees but also lead to the leave of some vital employees due to confidence losing (Palmer, Dunford & Akin 2009). Towards such kind of measure, we advise NDI to evaluate its pros and cons properly before conducting to minimize the side effects of such measure and maximize its benefits.

5.2 Early retirement and voluntary resignation

Bates (2003, pp. 71-73) suggested early retirement programs is a relatively mild intervention of downsizing, which is intended to replace regular retirement benefits. For NDI, it can adopt this measure to reducing the working years of employees and offering more flexible retirement programs to not only save money but also be more flexible as an employer.

Another choice for NDI is voluntary resignation program, which has the same aim of early retirement to help NDI to save more and let these want go to go (Maertz & Campion 2004, pp. 566-582)

Evaluation: as the above mentioned, early retirement and voluntary resignation may bring many benefits for NDI, the negative effects should also be considered. Early retirement and voluntary resignation programs may associate with restively generous incentives to terminate (Bates 2003, pp. 71-73). So for NDI, the loss and gain from this intervention should also be recognized.

5.3 Reducing working hours and wages

To better implement downsizing, proper tactics of downsizing are useful. Reducing working hours and wages may be a choice for NDI as well. Reducing working hours refers to the situation that NDI can cut short the working hours of employees to save money from employees’ salaries. As information from HR division of NDI, we find the regular working hours for employees are eight hours. It suggests NDI to shorten the working hours with consideration of the difference in different works. For example, it may be seemed no necessary for teachers to stay NDI for 8 hours, even though they don’t have class, especially these English native speakers who are paid by hour. (Palmer, Dunford & Akin 2009)

In addition to reducing working hours, cutting salaries may be also reasonable for NDI. Compared to be sacked, salary cutting may be more reasonable and acceptable for employees. We suggest NDI to adjust some incentives such as paid holidays, bonus but not to cut down the basic salary of employees. (Palmer, Dunford & Akin 2009)

Evaluation: compared with the possible negative effects of early retirement and lay off, this kind of downsizing intervention may be more appropriate for NDI. We value this measure due to its great advantage in saving cost and smaller disadvantage in decreasing working morale (Palmer, Dunford & Akin 2009).

5. 4 Merge units

On analysis of the current situation, NDI is suggested to merge some of its units such as the corporate training departments and individual training department. As we discussed before, the two department both belong to the academic division, which are set to offer suitable English training courses to students. As the two departments have the same function, there is no need to divide them into two. We suggest NDI to merge the two departments into one in the charge of the same manager.

Evaluation: the situation of NDI may clearly tell us the merging of the two departments is inevitable, in which the benefits may exceed the negative effects a lot, so we value this suggestion. For example, the merging can save money, time, and even human resources a lot for NDI. And meanwhile, when the two departments are charged by one manager, they can keep pace with each other, share information with each other and assist NDI to have a better performance together.

5.5 Unpaid holidays

NDI is also suitable to offer unpaid holidays for its employees, which refers to the situation that employees can enjoy their holiday relatively freely with no payment during their vocations (Nuddleman 2007).

Evaluation: this intervention is also proper for NDI to save cost while minimize the negative influence on working morale of employees. We do recommend.

5.6 Cross training

Stone (2010) told us cross training is a kind of training measure which is aimed to provide exposure to and practice with other organizational members’ tasks, roles, and responsibilities in an effort to increase shared understanding and knowledge to improve efficiency and effectiveness of organizational members. For NDI, this intervention is worth trying. For example, it may train teachers in academic department with the skills and knowledge on how to be qualified sales consultants. Due to the professional knowledge of teaching in English learning, acting as a teacher and course consultant can make them more attractive for customers.

Evaluation: this intervention of downsizing is the best valued one for NDI to adopt. Firstly, it can improve the competiveness and development space for employees in NDI. Secondly it can also help NDI to make full use of its staff without any wasting. This kind of intervention is evaluated as the most appropriate one for NDI to implement downsizing based on its current situation.

6.0 Political issues and solutions

With reference to Palmer, Dunford and Akin (2009), we can get that some political issues may associate with transitional period of downsizing including increasing political games from employees’ lobbying to retain their positions, managers over concerns with their teams’ productivity even at the expense of the overall organization, and utilizing network to draw in owed favors and so on. In NDI, these political issues may also occur during the downsizing period. In the following, we’ll discuss these possible political issues during downsizing period and offer some suitable solutions as well.

6.1 Political issues

6.1.1 Bad-mouth

Since NDI may adopt lay off as one of its downsizing interventions, these side effectives of such measure may be not so easy for NDI to avoid. From many reasons such as the dissatisfaction with lay-off, resentment, jealousy and other kinds of complex emotion from lay off people may lead them to practice some misbehavior such as speak bad of NDI and even spread some rumors towards NDI.

Although we all hold the idea that rumors stops before a wise man, business organization may not afford the cost of destroying the reputation. For NDI, such kind of resentful actions from some of lay off people may not only decrease the working morale of remained employees, the reputation of NDI as trustful employers but also its healthy development in future. (Palmer, Dunford & Akin 2009)

6.1.2 Employee turnover and low morale

If NDI really implements the merging units proposal that merge corporate training department and individual training department together under the charge of one manager, there will be a dispute on who will become the leader of the merged division- the former manager in corporate training department or the former manager in individual training department. It may involve several issues such as how to proper allocate the manager who isn’t nominated as the new manager to take charge of the merged division. Because the disputes of the two managers have been continued for a long time, we may suppose that the manager who loses its power and influence in NDI may choose to leave NDI to pursuit a better future. If it happens, some loyal followers of this manager may be presage by this manage to quit their jobs and go with this manager.

There are two negative effects of such unexpected situation. One is that NDI will not both a gifted management talent and some skillful and talents employees. The other is that managers in other departments of NDI may be also lobbied by this manager to leave their position in NDI or loss confidence on their employer and have a low working morale for a certain period of time (Maertz & Campion 2004).

6.1.3 Confidentiality leakage

Many members in NDI may also adopt many unethical activities to protect their positions in NDI, some of which may be at the expense of the benefit of the entire organization (Maertz & Campion 2004). For example, some course consultants in NDI may exaggerate the learning consequences of NDI’s English training courses or use some fake data to attract more customers for NDI to prove their value to this organization. Although in the short term, NDI may gain more, customers may have many complaints and doubts on NDI in the long term, which may bring a great attack to the reputation of NDI.

6.1.4 Disclosure of sensitive information

Some vital information of NDI may be leaked by some lay off employees as a resentful measure (Palmer, Dunford & Akin 2009). For example, the clear course fees and salary for part time teachers, potential customers’ information and so on may be disclosed to NDI’s major rival Metro International English, New Oriental Company and so on, which may be used by these competitors to seize customers and outstanding part time teachers from NDI. Such kind of situation may put the whole operation of NDI in a dilemma.

6.2 Solutions

6.2.1 Education and communication

It is important for companies such as NDI which plans to implement downsizing to give its employees a clear explanation and clarification on why a downsizing will happen. And meanwhile, some programs related to outplacement to these lay off people may also play a significant role in removing their resentful emotion. Besides, the respect and esteem for the lay offs of NDI should also be emphasized as well. (Palmer, Dunford & Akin 2009)

6.2.2 Early notice and satisfactory compensation

According to the recommendation from Cascio (2002), we suggest NDI to give those will be fired employee a much earlier notice to offer them more time to find new jobs. And the appropriate compensation for those lay offs should also be properly offered to minimize their finical load during the new job finding period.

6.2.3 Empowerment:

For these management level employees such as the manager in corporate training department or in individual training department, NDI can empower them to involve in the changing process to improve their sense of belonging and reduce their panic and the sense of losing power (Palmer, Dunford & Akin 2009).

6.2.4 Facilitation and support

Palmer, Dunford and Akin (2009) pointed out the importance of facilitation and support for employees after the period of change. For NDI, we also suggest adopting the measure of facilitation and support, which refers to provide resources both technical and emotional to remove the emotion of anxiety and uncertainty of employees towards the consequences of downsizing.

7.0 Conclusion

In this report, we adopt the Star Model to evaluate the current performance of New Dynamic Institute in the areas including the analysis on strategy, structure, business processes and lateral links, reward systems and human resource management of NDI.

And meanwhile these problems we found out in NDI include the following. Firstly, the renew rate of old student was low. Secondly, communication effectiveness in NDI is very low. Thirdly, incentives to teachers aren’t properly designed. Fourthly, the number of part time teacher and full time teacher isn’t balanced.

Based the current situation of NDI as the above discussed, we advise it to adopt downsizing to improve its effectiveness and profit as well as cut cost.

In terms of downsizing, many intervention techniques are suggested including lay off, outplacement, early retirement, voluntary resignation, unpaid holiday, cross training and merging units and so on. Meanwhile, this report also gives a proper evaluation on these interventions to assist NDI to get the best choice.

At last, some political issues related to downsizing are also analyzed with some recommendation on removing their negative effects.

In brief, this report is aimed to facilitate NDI to operate smoothly in its downsizing process so as to maximize its benefits and competitiveness in future.

8.0 Reference

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