Flexport's Decision to Downsize (Essay Sample)

Flexport's Decision to Downsize Student's Name Institutional Affiliation Course Professor's Name Due Date Flexport's Decision to Downsize Companies have to decide whether to downsize, increase in scale, or remain in the same place while they seek to maintain a competitive edge. High-performing companies often increase in scale because they have the power to maintain high standards. However, these companies may encounter challenges that necessitate them to downsize, cater to their growing needs, or overcome challenges they continue to face. Major companies, such as CNN, Amazon, and Flexport, have recently had to downsize to adapt to the current market change. Flexport decided to downsize, with the CEO outlining layoffs to approximately 20% of its employees. Flexport's structure groups people into different departments and highly emphasizes routines, while decision-making follows a chain of command. Flexport can be described as a bureaucracy because it highly emphasizes rules and regulations. The change in management instigated the need to downsize. The current CEO, Ryan Petersen, handpicked his successor and later ousted him with allegations of overspending and over-hiring during his tenure (Palmer, 2023). Therefore, he took back power, aiming to change the fortunes of the company, with the first step being to lay off 20% of the employees. Bureaucracies pay attention to power and chain of command. Leaders have a lot of influence on key decisions within an institution while there are strictly formalized rules and regulations (Robbins & Judge, 2018). Flexport outlines a structure where power is centralized. The decision to oust the former CEO from power happened because individuals felt the leader failed to control the employees effectively. Bureaucracies prioritize profits and the delivery of results. In the case of Flexport, the company downsized in pursuit of profits (Stroh, 2023). The company's leadership felt like the company was struggling because of hiring many employees and using a lot of the company's revenue. Therefore, the change aims to change its fortunes and make it more competitive. When Petersen got back in power, he made changes in different management positions to try and alter results. Bureaucracies emphasize a high degree of departmentalization, as departments influence results in a company (Morris & Robbins, 2018). Different departments focus on their different skills and talents to influence results. The change in leadership seeks to change leadership ideas and results. In addition, the change caused fear and different strains internally between employees, with the decision to lay off 20% of its workforce causing uncertainties. Lay-offs may depend on employee output and results, while in other situations, it may be unfair or unjust. Organizational layoffs mainly necessitate managers to actively listen to the employees and pay attention to their work standards to reduce job insecurities (Kriz, Jolly, & Shoss, 2021). In the outlined situation, however, the new leader opted to lay off employees because the previous leadership over-hired employees. Therefore, the shift in leadership may make it hard for the new leader to choose the right people to remain in office effectively. The leader is unsure about what the employees can offer. The shift outlined a turnaround in the structure of the company, with a growing company opting to go back on its notable upward trajectory. Flexport was showing promise, but a few management issues limited its growth and required a change in its structure (Inc.Africa, 2023). The shift in structure outlines features of a simple structure where there is a low degree of departmentalization. A simple structure offers a wide span of control, while leadership is centralized (Robbins & Judge, 2018). The new leader wants to control most of the activities and outline what others should do. The new structure instigates little formalizati...