A. 1. [a] (ii) Rationalisation is the term used for the restructuring of an organisation with a view to reducing costs and making the firm more efficient. It is a term that is often used when an organisation wants to ‘delayer’ – to produce a more flattened management structure, when a firm wants to ‘downsize’ – due to excess capacity, or following a merger – when it is argued that ‘synergy’ between the merging companies means that a number of resources (including labour) are duplicated and are thus redundant.
A. 1. [b] Within firms themselves there are a number of possible disadvantages associated with their employees suffering from “increased feelings of job insecurity”.
To begin with, motivation would decrease which could cause problems in relation to:
Health and Safety issues – in that, de-motivated workers could be less careful and more slovenly, leading to increased frequency of accidents.
Recruitment and retention problems – in that de-motivated workers are more likely to leave the firm (thus presenting the firm with retention problems and/or the expenses associated with training new staff). If numbers of staff left, then recruitment and selection costs would also rise.
It is widely thought, in management circles, that de-motivated workers are likely to be less productive than motivated ones – thus the unit costs of production in the affected firm are likely to increase, reducing (or even removing) the firm’s competitive differential advantage within its market.
Within the economy at large, an increased feeling of job insecurity amongst workers is likely to reduce consumer confidence generally. This is likely to cause many workers to borrow less, spend less and save a higher percentage of their income (for a ‘rainy day’). This will reduce Consumption (and thus Aggregate Demand) in the economy and will mean that firms will find it more difficult to sell the same amount of their products at existing prices, which is likely to reduce their profits.
A. 1. [c] Firms need to begin by carrying out a skills audit in order to discover what skills their existing workers already possess. Then they need to do some market research as a start to forecasting future demand. Once they have these two vital pieces of information they can begin their workforce planning for the future.
If the firms find that their existing workforce do not have the appropriate skills for the future, then they have a number of possible solutions that they could pursue.
The first of these is to increase on-the-job and off the job re-training for existing staff. This will mean that the firm can keep employees that it knows and who are familiar with the culture of the firm. It would, of course, involve the firm in substantial training costs, but this is a well-tried and trusted method within the business world.
Another method is to make some of the current workforce redundant and recruit new staff that have the requisite skills. Such a solution has the advantage of keeping training costs down, but the disadvantage of increasing recruitment and selection costs. The new workers will also need to be assimilated into the culture of the firm – which can sometimes be difficult.
A final method could be to keep a ‘core work force’ and employ a more flexible ‘peripheral work force’ on short-term, temporary or part-time contracts to provide the missing skills as and when needed. An alternative to this would be to sub-contract the work for which they lack the skills.
A. 1. [d] Maslow’s hierarchy of needs motivational theory might be relevant in explaining the ‘new’ approach to women at work, adopted by Asda and The Midland Bank, in so far as these organisations now seem to recognise (from the data given) that for many women to feel secure at work it is necessary to take into account their outside needs to – e.g. a woman is less likely to feel secure at work if she is not allowed to finish at a time that allows her to pick up her six year old child from school.
Asda and The Midland Bank are seen to be trying to actively motivate their female employees, and this ties in neatly with Herzberg’s view that it is important to have motivators to motivate the workforce – concentrating on hygiene factors alone will not motivate workers.
The attention and caring concern shown for the women employees by their employers at Asda and The Midland Bank can be seen as an attempt to put into practice the Human Relations school of thought (as developed by Elton Mayo and others).
However, though the new approach adopted to women at work by Asda and The Midland Bank can largely be explained by their desire to motivate these employees and by their having been persuaded by the arguments of the human relations and neo human relations schools of thought, it ought to be mentioned that, in the opinion of one school of thought, their ‘new’ approach would not deliver the increased motivation that they obviously want. According to Taylor and the Scientific Management school of thought, money is the way to motivate workers. Indeed, it might be thought that the real reason for some women returning to the workplace is their need for money.
It is also possible that Asda and The Midland Bank have embarked upon their new approach to women at work, not because they have been convinced by the theoretical arguments of some of the motivational theorists like Mayo, Maslow or Herzberg, but because of the introduction of increasing amounts of legislation on equal opportunities and sex discrimination. If the firms feel that something might be imposed on them in the fairly near future, then they might decide that it is preferable to bring in necessary changes, in their own way, now – rather than be forced into making hurried decisions and working practice changes later.
