There are many factors contributing to the fact that Stonewall will need to make changes and in this case downsize. As the case study reads, “In 1982, the construction materials industry in Canada was in shambles”. There was a decrease in consumer demand as interest rates were so high no one was investing in building new homes. Putting it simply, people couldn’t afford as much. As a result of the “ballooned” inflation levels, there was a subsequent effect on wages across the country resulting in high levels of unemployment. The situation in 1982 is a straight-forward example of supply and demand. The demand for the products that Stonewall supplies was down, the company didn’t need to produce as much …show more content…
This strategy is not something that Stonewall took advantage of. I believe this process could’ve been combined with workforce reduction resulting in less of an impact overall.
Systemic Change: A long-term strategy characterized by changing the organization’s culture and attitudes/values of employees. I don’t believe Stonewall needed to focus on this strategy specifically in 1982, but it could be something they work towards moving forward as a pro-active measure.
Downsizing can be very costly, and as a result, it would’ve been in Stonewall’s best interest to investigate alternatives. There is no mention in the case study that Stonewall explored other ‘cost-cutting/saving’ measure prior to completing their downsizing. Some strategies and considerations they should’ve made could include:
Assess whether they were getting their products for the best price possible
Could alternative commodities be used in their production
Could production processes be “tweaked”/re-structured for