MBA 745 – Reflections on Module 3 Concepts

Labor Surpluses
In mature organizations, there is quite often a need to reduce labor surpluses. There are several options a leader has when faced with this difficult challenge. Rather than layoffs I woud pursue a phased retirement program. This would costs to the organization by reducing hours of workers near retirement. According to the Sustaining Success text, this psyhologically prepares workers to ease into full-time retirement. This method would also allow the company to benefit from the knowledge of older workers. A phased retirement program would be less threatening to other workers and avoid salary cuts, temorarary worker, or even outsourcing possibilities.

No Layoff Policy
If a mature organization establishes a "no layoff" policy it could be advantageous to keep operations running during a market slump. The challenge would be how to reduce the costs during this downturn and the effects it may have on employee motivation and culture. The leader must analyze all options and determine which method would benefit the company. I would advocate the no layoff policy to try to sustain the complany and employee morale.

Cash Flow
Fast growing companies require more working capital than those growing more slowly or not at all, as in mature companies. The company must look for ways to stretch their cash especially for large purchases. The finance manager must try to analyze the future profitablity of the company to determine what monies will be available, by predicting future cash availabillity the company will know how to plan for the needs of the company. Based on the financial situation of the company the leader must look for ways to obtain additional funds should the need arise. Without predicting the future finances and the needs of the company may be put in a vulnerable position thus increaseing their risks.