"Problem in textile factory"

At a large textile factory, things were going quite well. The plant was built in the 70s and sold its products under Soviet rule, during perestroika and with the active development of democracy. But in connection with the active development of the latest technologies, competitors began to oust this once thriving company from the market. Many customers and regular buyers of textile products went to other manufacturers. As a result, over the past eight months, the number of orders has decreased, and in this regard, there were interruptions in the receipt of cash. Therefore, the management decided to reduce part of the staff.

At the meeting of the board of directors, it was decided to complete the already planned contractual transactions, and then, based on the reduction of applications from consumers, to calculate what and how much will have to be cut. Based on the data obtained, calculate the surplus of labor and start layoffs. According to the owners of the plant, the measure was temporary, since in six months they planned to occupy a new niche in the sales market, which, with good development, would require reverse work with personnel - recruiting new employees. The owners and the head of the plant viewed this measure as an opportunity to cleanse the team of outdated competencies and inject new blood into the team. Managers have decided not to report anything to employees for now.

But the information was leaked anyway, and employees began to react. For unknown reasons, the machines stopped working, the dyes stopped dyeing, the fabrics stopped weaving, the pace of work was extremely slow, many went to sick leave, and others simply did not come out without explaining the reasons. The performance has dropped dramatically. The management found itself in a difficult situation, the reason was not clear, since the management was sure that the employees did not know anything.

Management instructed you to resolve the situation and improve the situation.

Answer Questions:

1. What controlling techniques do you think were used to make this decision (staff reduction)? Argue.

2. What controlling error was made? Argue.

3. Give recommendations in this situation and argue their effectiveness