Valley Technology Inc. is a part of the computer storage industry that initially offered a tape drive portfolio of products, which provides backup and recovery capabilities, and it has recently introduced a network attached product which is dedicated to file sharing only. The company encountered dilemmas regarding the most appropriate alternative that would be best to resolve their plan of reducing the company’s overall cost, specifically with the tape storage division. The top management has decided to conduct a reduction in force (RIF), which would constitute an involuntary turnover. Before deciding on the final list of the employees who would be laid off, the division’s managers assured that they followed the selection criteria, and the list was subject to a legal review before implementing the lay-off. This strategy is beneficial for the company to continue with its operations efficiently and effectively which would enable it to attain profitability; however the company needed to practice open communication with regards to such matter in order for the retained employees to perform well and to move forward from such issue.
I. Statement of the Problem
How will Valley Technology Inc., specifically its tape storage division, deal with the cost reduction in its workforce with regards to maximizing profitability and preventing any involuntary turnover in the future?
1. To determine several alternatives that would help alleviate the possibility of involuntary turnover in the future 2. To know the significance of technology in today’s market 3. To know the impact on how unionization of the workforce will affect the company 4. To strengthen the essence of open communication in the workforce 5. To know the impact of downsizing with regards to certain legal aspects 6. To be able to find ways on how to exceed excellence in the workforce’s performance and maintain the workforce’s morale
III. Areas for Consideration
1. Nature of the Industry – Valley Technology Inc. is a company which specializes in computer storage devices, specifically offering a tape drive portfolio of products which provides backup and recovery capabilities to secure the data of the organizations needing it as the company begun in the earlier years. It entered the market in 1992 during the dot-com boom and it went public in 1998, in which its stock price’s value increased. In the latter part of its existence, the company has been providing a variety of product mixes in the market, such as a network attached product which is dedicated to file sharing only. The company needed to adapt with the advancement of technology in the market. In response to this, the organization created different products in order for the company to maintain its profitability and gain competitive advantage.
2. Organizational Culture – Historically, VTI’s organizational culture has been employee-friendly. The company values the relationship with its employees and it gives much importance to its employees’ welfare. One justification for such is that it provides private pension plans to its employees. Giving such retirement benefit establishes a strong base for building retirement security for its workforce. As the company’s workforce grew, VTI leaders have been able to re-skill and shift to cover “hot” and future projects, therefore reducing the possibility of any reductions in its workforce. Identifying and understanding the culture of an organization is a difficult task, which requires analytical skills, understanding the organization, and possessing the knowledge of organizational theory, combined with a great deal of effort. However, it is an even more difficult task to overcome cultural resistance while trying to control and reduce costs. Source: (http://ejournal.unud.ac.id/abstrak/putu%20sudana.pdf)
The company must look...