John Challenger suggested that we should consider certain things in acting more ethically in downsizing. What things he sugegsted? A. Planning B. Pessimism about the future of the company C. Emotions D. Timing E. Stakeholder perception Choose the correct answer from the options given below:
A, C, D and E Only
A, C, D and E only — option 1. Pessimism about the future of the company is not a consideration Challenger recommends; it is a state of mind that ethical downsizing is meant to avoid creating.
The context. John Challenger, of the outplacement firm Challenger, Gray & Christmas, wrote on how firms can carry out unavoidable job cuts without behaving badly. His argument is that the manner of a downsizing matters as much as the decision, because it determines the damage to those who leave, to those who stay and to the firm’s reputation.
| Consideration | What it requires |
|---|---|
| A — Planning | Work out the whole process in advance — who is affected, on what criteria, with what severance, outplacement and notice. An improvised downsizing is where unfairness and legal exposure enter |
| C — Emotions | Recognise that redundancy is an emotional event, for those dismissed and for the survivors. “Survivor syndrome” — guilt, insecurity, falling morale and commitment — regularly destroys the productivity gain the cuts were meant to produce |
| D — Timing | When the announcement is made and how quickly it is carried out. Prolonged uncertainty is corrosive; so is an announcement made just before a festival or at the year end |
| E — Stakeholder perception | How employees, customers, investors, the community and the media will read the action. Reputational damage outlasts the saving |
Why B fails on its face. Every other item is something management should attend to in order to act well. Pessimism about the company’s future is not a thing to be considered but an attitude — and an ethical downsizing is precisely one that is explained clearly enough to prevent unwarranted pessimism from spreading. Recognising that B is different in kind eliminates options 2, 3 and 4 together.
The wider ethical questions in downsizing : whether the criteria for selection are objective and non-discriminatory, whether adequate notice and severance are given, whether alternatives such as redeployment, reduced hours or voluntary retirement were genuinely tried first, and whether the firm assists with re-employment. In India these are not only ethical questions — retrenchment of workmen is regulated by the Industrial Disputes Act, 1947, which prescribes notice, compensation and, in larger establishments, prior government permission.
Hence, the answer is A, C, D and E Only.
Similar Questions
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Reasoning (R) : Companies that do not cooperate sufficiently with auditors can publish non-compliant financial results.
Code :
Which among the following are also called Corporate Social Responsibility ?
(a) Corporate Conscience
(b) Corporate Citizenship
(c) Responsible Business
Code :
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Assertion (A) : Corporate behaviour towards stakeholders is an important concept in practice and a central part of corporate Governance.
Reason (R) : It has to be ethical, legal and responsible behaviour for organisation, stakeholders and society.
Code :
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Match the items given in the List - I and List - II and suggest the correct code :
List - I List - II (a) Ethics (i) Right code of behaviour for a group or profession (b) Morality (ii) Prescribes right conduct for everyone (c) Moral standard (iii) Needs some inclination to follow morality (d) Meta Moral Standard (iv) Practical and pragmatic Code :
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Important Questions from Corporate governance and business ethics
Corporations are controlled and directed by which one of the following?
Which among the following is not a correct statement with regard to Corporate Governance in India ?
As per the Anglo-Saxon Model of Corporate Governance, the authority lies with the following. Arrange these in decreasing order of authority.
A. Board of Directors
B. Managers
C. Shareholders
D. Employees (Company)
E. Trade unions
Choose the correct sequence from the options given below
Assertion (A) : Corporate governance is an important instrument of investor protection.
Reason (R) : Strong corporate governance is indispensable to resilient and vibrant capital markets.
Which one of the following options is correct?
Which one of the following is not a norm of corporate governance ?
