Case Study: Airline company

Topic : Deepti is a CEO of an airline company and has to cut downthe overhead costs.She has the following options to be presented to the finance department of the company.
1) Lay off 10% of the lower performers
2) Reduce Retirement Benefits by 30%
 3) Increase the shifts of employees by an hour
4) Cut Salary of employees by 10%

Q1 Which option would Deepti choose ?

Q2 Which option would draw the most -ve feedback ?

-----------------My points----------------

Costs that are not directly related directly to the type and quantity of products produced. A type of fixed cost.
Number of employees can be directly proptional to productivity,
Depends on overheads,if they have excess employees

 Then 1.If just costs thenReduce Retirement Benefits by 30% is the best option as it affects the morale of employees the least.

 Most -ve feedback is Lay off 10% of the lower performers


Parag Dhamija,  5/5/10 3:27 AM  

IMO, Increasing the shifts of employees by an hour should be the solution with minimum disruption.I think this would be taken till the time the reason for the cut-down has been made up for.
Laying off 10% of the lower performers will prove to be most negative for the morale of all the employees.

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Anonymous,  2/1/11 9:43 AM  

i think laying off 10% lower performer is suitable ,b coz other ll do their work promptly and hence efficiency ll increase.

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Vocab Power Updated Daily

  • COBBLED - Repair or mend
  • ABHORRENCE - Hate coupled with disgust
  • INCUMBENCY - The term during which some position is held
  • MITIGATE -Lessen or to try to lessen the seriousness or extent of
  • dubious - Open to doubt or suspicion
  • FOSTERING - Encouragement; aiding the development of something
  • ELICIT- Call forth (emotions, feelings, and responses)
  • PLAUSIBLE - Apparently reasonable and valid, and truthful
  • FORGE - Move ahead steadily
  • BOLSTER (V)-Support and strengthen
  • ECCENTRIC- A person with an unusual or odd personality
  • PATRONAGE - The act of providing approval and support
  • IMPERVIOUS - Not admitting of passage or capable of being affected

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