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Ethical Business Issues: Layoff Strategy

Select the answer that is most correct and write a brief, 150-word essay to provide a rationale for your choice. This activity allows you to demonstrate your understanding of ethical principles, the organizational and societal implications of ethical behavior, and the functioning of ethical systems within organizations.

Question: Your division has seen a relatively sharp drop in revenue due to market circumstances. You manufacture house materials, specifically plumbing, and new house construction has fallen substantially. The division must shrink to fit its new revenue stream. Personnel is the highest cost factor for your division. Unfortunately, you and the management team decide to layoff a substantial number of your manufacturing personnel. You are a non-union company, but you do have to design a layoff strategy. What do you do?
a) Lay people off in the reverse order that they were hired.
b) Lay people off, starting with those who have been with the company the longest, because those people are at higher wage rates than the newer people. This will allow you to preserve more jobs overall.
c) Lay off the least productive workers and administrators.
d) Lay off those who have the lowest evaluation scores.

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c) Lay off the least productive workers and administrators.

Here are the main points that I would include with the answer selection:

We would want to lay off the people that are the least productive, and this would include both administrators and employees. The main issue involved is ...

Solution Summary

This solution provides the correct answer with complete explanation to the ethical issues multiple choice question listed.