one or one hundred—is not necessarily an unethical decision. However, the deci- sion itself raises ethical quandaries since alternatives may be available to an orga- nization in financial difficulty. Accordingly, the question of whether to resort to widespread terminations based on financial exigency in lieu of other options that may be available does not always lead to a clear answer. Once the decision has been made, are there ways in which an organization can act more ethically in the process of downsizing? How might our earlier discussion of due process and fairness offer some guidance and/or define limitations in a downsizing environment?
In a speech to the Ethics Officers Association, John Challenger suggested that we should consider the following factors in executing that process: planning, tim- ing, notice, impact (on those who will go and those who will stay), and stakeholder perceptions.5 We can make better choices, Challenger argues. In fact, our decision- making model offers significant guidance in a situation such as a downsizing.
First, the decision regarding downsizing should be made by a representative group so that all stakeholder interests can be considered and to earn the trust of those who will be impacted. The facts should be collected and issues should be determined. Since employees should be kept aware of business conditions, the need for a downsizing effort should not come as a great surprise. However, the question of notice is debatable.
It can be argued that a firm should give notice of an intent to downsize as soon as the need is determined, and let those who will be impacted know who will be let go as soon as that list is devised. On the other hand, the uncertainty and rumors that are sure to develop between the announcement of downsizing and the decision about who will be terminated may outweigh the benefits gained in early notification. In addition, allowing a worker to remain in a position for a period of time once she or he has been notified of impending termination might not be the best option. Workers may interpret early notice as an effort to get the most out of them before departure rather than an effort to allow them time to come to grips with the loss of their jobs.
Once the stakeholders are identified, it will be vital to enumerate any and all possible options with regard to the downsizing efforts and to catalog the impact of each option on each group of stakeholders. (See the following Reality Check for a discussion of options.) When a firm decides to downsize, as with any other termination, it is critical to lessen the impact as much as possible and to allow the terminated employees to depart with dignity (for example, unless there is some other reason for the decision, having a security guard follow terminated employ- ees until they leave the building might not be the best option). Above all, during a time when relationships might be strained, it is critical to be honest and forthright and to be sensitive to the experiences of those who will be affected.