When the economic climate takes a downturn, such as the global financial crisis

(GFC) of the early 2000s or the current COVID-19, businesses must adapt. This

results in many companies finding it necessary to restructure and implement

redundancies. Rearranging an organisation can take time and leave a company

exposed to a number of risks during such a transition period. Piccollo Ltd, a

provider of low-cost loans is concerned that a recent restructuring period has led

to an imbalance of staff in some of its divisions. Management at Piccollo Ltd aims

to employ staff such that 75% are at the consultant level (junior staff team) and

25% are in supervisory (senior staff team) roles. Senior staff typically hold a great

deal of tacit knowledge about company practices and policies and may have

much historical insight into the market. They also provide valuable mentorship

and leadership to the company's rising stars.

Piccollo Ltd offers three types of loans: home loans, car loans and personal loans.

The manager of one of Piccollo's divisions is concerned that his division has too

many senior staff, which he claims creates difficulties in determining a brief

strategic approach and will lead to budgetary shortfalls for his division. On the

other hand, another division manager is worried that her division employs too

many junior staff, which she claims has led to lower employee satisfaction levels.

Many of her staff are undertaking tasks for which they are inadequately trained.

Both division managers have asked that some level of balance across divisions

be maintained. Unfortunately, various databases that contain information on

employees' levels of appointment and the areas in which they are employed have

not been completely updated to reflect all changes. However, results presented

in the below table, from a recent survey of 48 employees collected for another

purpose, reveal information that may offer some preliminary insights.

Division

Employee level Home Car Personal

Supervisor/senior staff 3 6 3

Consultant/junior staff 8 15 13

Total employed 11 21 16

Answer the following questions to help managers make decisions

a) What is an alternative way to present the information provided in the table

above so that management can easily determine the probability that someone

works in a specific division and has a particular appointment?

b) The management of Piccollo attempts to hire and place staff in each division

based on customer demand. What does the probability of someone working

in each division suggest about the types of loans that customers are looking

for from Piccollo Ltd?

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c) Piccollo Ltd hopes that consultant employees outnumber supervisors such

that one in four employees, or 25% of total employees, would be a senior

staff member in a supervisory role. Using the survey of 48 staff members, is

this being achieved?

d) Using the values presented in the case study, what is the probability that a

staff member would be employed in a supervisory role, given that the

employee is employed in the home loans division, the car loans division or

the personal loans division?

e) What do the responses to questions c) and d) suggest about the relationship

between the level of appointment of a staff member and the division in which

they are employed? If the sample size was increased and the probabilities

calculated were the same, how concerned should Piccollo management be

about the restructuring that has occurred? To which division should their

concerns be directed? How can these concerns be addressed?