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STRATEGIES FOR ORGANISATIONAL EXIT

Organisational exit has gained much importance in New People Management. We have seen this trend in current and last decade. New this trend has made an impact in all corporate worldwide. This is final step managing the NPM life cycle. For planned separation from the employees whose contribution will no longer add value in the organisation, now the corporation has moved into a different stage of existence where it needs new set of skills from its people. So it is important to have a competitive strategy. Adds Mr. Muktesh Panth President Reebook International “ In any business strategy people are more crucial than plans. Effective implementation is possible only with motivated people”.

Down sizing, reduction in forces, job discontinuance three new term has gained currency in this millennium. Several factors like macro, micro, global competition, government degradation, technological changes, market changes, economic condition, corporate rationalization, changes in business strategy, cost containment, mergers and acquisition, lack of profitability, are responsible for organizational exit. The practices for downsizing range from changes in organisation structure, changes in employment profiles to changes in employment practices.

Strategies :-

  1. To establish the compulsion of manpower reduction.
  2. To manage downsizing without disrupting the organization.
  3. To ensure that employees participate in the decision.
  4. To match the focus of manpower reduction to corporate strategy.
  5. To ensure a transparent system for choosing people.
  6. To manage the psychological and social fallout on exiting employees.
  7. To maintain contact and relationship with former employees.
  8. To prevent the company from being branded as anti-people.
  9. To motivate employees who stay back.
  10. To develop a post downsizing manpower development plan.

Other alternatives :-

  1. To develop a downsizing plan & manage it.
  2. To define the futuristic organisation
  3. To define effected group.
  4. Identifying the people.
  5. To chalk out recruitment planning for future organisation.
  6. Creating placement opportunities.
  7. To keep communication open.
  8. To allow time limit for employees to find job.
  9. Terminate or lay off

Managing downsizing :-

  1. Recruiting and hiring should be in tune with future organisation
  2. Organisation should allow the employees to determine what they need to do in the organisation.
  3. Corporates have to identify likely candidates possessing the type of management & tech skills for various positions.
  4. Career assessment and deployment activities that allow people to get ready for position.
  5. To create value added & revenue enhancing opportunities.
  6. Comprehensive model for conducting business.
  7. Flexible hours.
  8. Attrition rate.
  9. To allow the employee to buy the operation that was meant for closure, to start his own business.

Techniques :-

  1. Trimming the work force.
  2. Retrenching the middle managers.
  3. CEO replacement.
  4. Outplacement techniques.
  5. VRS techniques.
  6. Exit interview.

Retrenching the middle managers :-

  • To plan & lay the ground for a retrenchment exercise well in advance.
  • To communicate the reasons for the retrenchment to everybody in the company.
  • To identify the managers on the basis of performance.

CEO replacement :-

According to Mr. Sanjeev Goenka Vice Chairman RPG Enterprises “If a CEO is lagging behind do not blame him, the rules of the business are changing fast, which many managers are unable to stomach.

  • To temper the termination by ensuring that CEO goes with dignity.
  • To use overseas transfers or non-executive position.

Downsizing should be linked to corporate strategy, nurtured through careful planning. This programme provides and opportunity to re-establish the keep cultural value and norms that guide employee behaviour. We have seen some unceremonious exit from fast moving corporates like Tata Hotel’s Mr. Ajit Karkar, Mr. Sanjeev Gupta from ABCL, Mr. Russi Modi from Tata Steel. User companies Fiat India, Arvind Mills, Reliance Industries (Textile Div.), Standard Chartered Group, Dresdner Bank, Rallis India, Commerz Bank.


Rajat Sanyal

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