Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell

Exercise 9

Morale among the Survivors
Medallion Corporation manufactures quality carpeting and linoleum for homes throughout the United States. A recession and subsequent downturn in home sales has sharply cut the company's sales. Medallion found itself in the unenviable position of having to lay off hundreds of employees in the home office (the manufacturing facilities) as well as many salespeople. Employees were called in on Friday afternoon and told about their status in individual meetings with their supervisors. The laid-off employees were given one additional month of work and a month of severance pay, along with the opportunity to sign up for classes to help with the transition, including job search tactics and résumé writing.
Several months after the cutbacks, morale was at an alltime low for the company, although productivity had improved. Medallion brought in consultants, who suggested that the leaner, flatter organizational structure would be suitable for more team activities. Medallion therefore set up task forces and teams to deal with employee concerns, but the diversity of the workforce led to conflict and misunderstandings among team members. Medallion is evaluating how to proceed with this new team approach.
What are some of the potential problems that must be dealt with after an organization experiences a major trauma such as massive layoffs?