A Case Study on the Communication Strategies Used in the Downsizing of the Pharma Divisin of Marsman and Company, Inc. (Metro Drug, Inc.)

Abstract

Communication is vital in every organization. Moreover, communication ties together the component parts of the organization and impels people to action. In order for group and organizational activity to take place, there must be communication among its participants. Aside from the fact that communication plays crucial role in the functions of the organization, communication also helps organizations adapt to various changes that take place each day. Although most changes are assimilated by the organization without much trouble, there are some changes that arouse a great deal of resistance from the people directly affected by the organization. An example of change that is met with a lot of resistance is downsizing, a process of reducing the number of employees needed to operate effectively. That is why, before any change, such as downsizing, is introduced, there should be a period of communication during which management thoroughly discusses the process and its implications with those affected and involved. Marsman and Company, Inc. is one of the many organizations in the country that has recently downsized due to the Asian economic crisis. However, before implementing such kind of change, the management committee (Mancom) has prepared communication strategies in order to facilitate communication before the process is actually implemented. As such, the main problem of this study was stated as: “How did the communication strategies employed in the downsizing of Marsman Company, Inc. aid the management throughout the implementation of the whole process?” This study, therefore, sought to determine what communication strategies were used and in what way did theses strategies aid the management in the whole process of downsizing. However, since Marsman is very big organization, the study was only conducted in the pharma division of Marsman, which in Metro Drug, Inc. In gathering data, the author made use of the interview schedule and the survey questionnaire. All of the key informants and the respondents for the interview schedule and the questionnaire were purposively sampled. The data gathered from the interviews coincided with data gathered from the survey questionnaires. From all these data, it appears that the downsizing was implemented as a response to the financial losses that the company has been experiencing for the past three years. The downsizing program of Metro Drug was embodied in a new strategy called the one stocking point strategy. Basically, the one stocking point strategy involved the closure of all the branches of MDI in the provinces leaving only the head office in Metro Manila. As such all of the employees in the provincial branches were laid-off while the headcount in the head office was also significantly reduced. The one stocking point strategy was implemented on Oct. 1, 1998. But prior to this, the Mancom underwent a period of planning where all the details of the one stocking point strategy were prepared. This planning stage was considered, as the best kept secret among the members of the Mancom since none of the employees outside the committee knew about the new strategy. In addition, it was also during the planning stage where the communication strategies were prepared. The communication strategies were prepared in order to ensure that everything about the one stocking point strategy is properly communicated to all the people concerned such as the principals, customers and employees. The communication strategies were made so that all the details regarding the one stocking point strategy could be clearly understood by the people affected by it. These communication strategies were only used prior to the actual implementation of the downsizing through the one stocking point strategy. The communication strategies of Metro Drug detailed what communication channels were used, what approach was taken in communicating and what the key messages were. In addition, the time frame adopted for communication and the people who where responsible for the communication was also indicated in the communication strategies. Prior to the implementation of the downsizing, the most common channels that were used were meetings, which were done either by group or individually. This means that face to face communication on an interpersonal basis was more prevalent. Moreover, the details of the one stocking point strategy were clearly explained during these meetings. At this point, The most common approach used in communicating was the persuasive approach since the Mancom was still on the level where they were trying to gain the support of all the people affected. Also, communication lines were constantly open since all information was given honestly, sincerely and in a straight to the point manner. However, during the actual downsizing or implementation of the one stocking point strategy, communication strategies were no longer prepared because at this point, the communication that took place was more on status reporting. The members of the Mancom had regular meetings in order to update themselves of the status of the one stocking point strategy. Updates were also given to employees outside the Mancom but only on a need to know basis. Customers and principals alike also receive updates. Feeback from the employees was usually gathered through face to face meetings. In fact even during the announcement, the employees already had the chance to voice out their feelings and raise their comments or questions regarding the process. The principals and the customers, on the other hand, were also encouraged to give their feedback during the announcement. Again, feedback was generally gathered through face to face channels of communication. The direction or flow of communication inside the organization was primarily downward most especially during the announcements. However, upward and horizontal communication also became prevalent most especially when the one stocking point strategy was actually implemented. All in all, communication played a very important role as an aid to the management throughout the implementation of the whole process of downsizing. Through communication, the Mancom was able to make the principals, customers and employees understand what the one stocking point strategy was and why it was needed in the company. Moreover, through communication, the apprehension and fears of the people regarding the one stocking point strategy were resolved. Communication helped the management attain the support of all the people affected so that the strategy could work in the way that it was planned to be. Most importantly, problems such as disputes, misunderstandings and employee strikes were avoided with the help of communication.