Case Study: ABC Ltd

Individually review the case study of ABC  and apply your knowledge of restructuring and redundancy legislation.

Following your reading on organisational restructuring, you are asked to take time to review the case study of ABC Ltd and then answer the following questions:

1. The ABC Ltd senior management team need to make decisions regarding redundancies of staff. Which staff would you recommend to the senior management team should be recommended for redundancy?
2. Explain the rationale for these suggested redundancies. Please take into account factors such as the individual’s job role and the risk to the business? Evaluate any mitigating factors which need to be considered.

We are looking at re-structuring within organisations within this session and it is important different HR options are considered which can be taken, before what may be considered the last resort of redundancy. Once you have completed this task, you will be sharing a 200 word summary of your findings on the discussion board on the next page.

The purpose of these discussion activities is to assess your knowledge of the subject area and ability to critically analyse, evaluate and make sense of different situations, scenarios, and case studies (MO 1, 4).

Case Study: ABC Ltd

ABC Public Relations Business – Case Study
ABC Ltd is a leading Public Relations business based in London, England and has a wide
range of contracts with a variety of industries. The business is due to celebrate its tenth
anniversary and wants to ensure they use this opportunity to announce the opening of its new
offices in Manchester in the north of England. Currently ABC Ltd has a total of 200 employees
and the opening of the Manchester office will take their total headcount up to 300 employees.
ABC Ltd is a very close-knit business and provides a supportive environment for all its
employees. There is a small proportion of employees who are members of a Trade Union, but
these tend to be the older employees and the union has very limited impact on the operations
of ABC Ltd.
One of the key aims of ABC Ltd is to provide personal and bespoke marketing solutions for its
customers. It has achieved this largely due to the commitment of the Senior Director, Andrew
Tuckman. Andrew has been with the business from the beginning and has some concerns
about its rapid growth. Joanne Tappern joined five years ago and is also part of the executive
team; she maintains responsibility for creative development. Currently Andrew and Joanne
Tappern have different views about the direction of the Company. Andrew believes opening
in Manchester is not a wise move; he is concerned with the current mood of the economy and
lack of appetite amongst businesses to spend money. The senior team is made up of four
directors and Joanne and Andrew have both expressed their views about which way the
business should go. The other two directors are Ted Rogers (Operations), and Peter Strike
(Sales & Customer Relations). The directors have decided to move forward with the opening
of its offices in Manchester. Joanne is due to take the lead on this project and is quick to make
progress in searching for office space.
Six months later several existing clients terminated their contracts with ABC Ltd as they
believe they are no longer given the one to one customer care they had become accustomed
to. Andrew is outraged as he has long protested that too many of the existing staff are diverting
their efforts and attention towards the opening of the Manchester office. Andrew believes this
has contributed to the deterioration of the working relationship with two of their biggest clients
and has now cost them dearly.
The opening of the Manchester office is thus put on hold, and to ensure the business suffers
no further financial losses, a discussion on redundancies has commenced. Anthony Dawn,
the Human Resources Director has been tasked with identifying the best way forward. After
a review of the current staffing structure it has been decided that a total of 22 redundancies
will need to be made. Anthony Dawn is left to manage these changes and to identify
appropriate selection criteria.
After long discussions it has been decided that the areas of the business that are most critical
should be maintained and grown. The recognised areas that are being preserved are
operations, sales, customer relations and Andrew’s area of finance. A total of 22 redundancies
have been identified, the majority of these being administrative roles from across the business
and some more senior posts from the creative team.
Four of the roles identified as being at risk of redundancy have caused the HR Director
(Anthony Dawn) some concern; and he has raised this issue with the executive team. Anthony
has urged the executive team to re-think their approach based on some of the comments from
four employees who have been told that they are at risk of redundancy:
Joanne Tappern
The first employee who is at risk of redundancy is Joanne Tappern, the Creative Director. To
a large degree the executive team hold Joanne responsible for pushing the attention of key
employees away from their existing roles and clients to focus on the opening of the
Manchester office. They also believe her failure to carry out a full and effective due diligence
on the move to Manchester led to the senior team being misinformed about the pros and cons
of opening in Manchester. Joanne has never had any disciplinary action taken against her and
is insisting on reviewing the criteria used to decide her selection for redundancy.
On examination Joanne discovers the criteria being used are absence, performance,
disciplinary warnings, flexibility & attitude and finally length of service. Out of the executive
team she scored poorly as all the other directors have longer service and attend meetings
abroad and away from home at short notice and therefore are more flexible. Unfortunately,
Joanne is unable to do this as she has a young five-year-old son.
Freya Smith
Another employee who is at risk is Freya Smith, the Creative Team Senior Manager. The logic
here is that because the creative team will have reduced significantly in size, it no longer
requires a senior manager. Freya believes she has been identified as she is currently on
maternity leave and therefore is not at work when key decisions are being made about her
future. She is thus unable fully to represent herself. Freya has suggested she could work
reduced hours until the business picks up, but this has been dismissed.
Darren Sewell
A third employee who is at risk is Darren Sewell, a junior manager in the creative team. Darren
is 62 and nearing retirement, however, has already expressed an interest in working beyond
retirement. The senior team are keen to use the redundancy process to remove employees
who they perceive to lack the energy and drive needed to “take the business forward to the
next level”. Darren has expressed his concern, as he believes he has been selected in part
because he once raised a grievance against one of the senior executive team (Ted Rogers).
On investigation no action was taken, but Darren was unhappy as he had clearly overheard
Ted talking about homosexuals and how there was “no place for them in the business”.
Although Darren is not gay, his 28-year-old son has come out and this is well known across
the business.
Elton Richards
The fourth employee is Elton Richards, who works as part of the administration team. Elton
has been working for ABC Ltd for six years and has scored poorly on the selection criteria due
to his absence record. Elton has had several absences due to his diabetes and his increasing
dependency on insulin which has led his doctor to re-evaluate his condition.
Having considered these cases in more depth, the executive team instruct Anthony to move
forward with the redundancies.

Case Study: ABC Ltd

CITATION