Interclean-Envirotech Merger Case

InterClean-EnviroTech Merger

In the current scenario, there is InterClean, Inc., which is a company dedicated in the sanitation industry. Due to the changes in the industry and demands of the clients InterClean will be going thru a merger with EnviroTech. In the process of a merger, downsizing or rightsizing is a common strategy to take, in order to accommodate their needs and the company financial state.

In the process of a merger, the company and the human resources department have to set goals and a strategic planning. Once done this, the company “needs to choose from the many different strategies available for redressing labor shortages and surpluses” (Noe, Hollenbeck, Gerhart, & Wright 2008). Some of the strategies provided include early retirement programs and buyouts, employing temporary workers, outsourcing and offshoring, altering pay and hours, and downsizing or rightsizing.

According to QFinance: The ultimate resource (2014), “restructuring of company to most effective size corporate restructuring, or rationalization, with the goal of reducing costs and improving efficiency and effectiveness. Rightsizing is often used as a euphemism for downsizing, or delayering, with the suggestion that it is not as far-reaching. Rightsizing can also be used to describe increasing the size of an organization, perhaps as an attempt to correct a previous downsizing, or delayering, exercise”.

Rightsizing can be a strategic reaction for a company to make changes in their business or financial state. This strategic can involve the reduction of employees and operational expenses to maintain a positive financial state. Rightsizing is a normal process during economic recessions and companies need to modify their employment volume and other costs to respond to decreasing proceeds.

Usually, rightsizing is performed when the company faces an economic gain or lost or when the strategy the company is using is not working for them. In the process of rightsizing the company you can make a restructuring and determine the talent they need to go hand in hand with its new strategies.

In the process of rightsizing, no matter if it's increasing to meet demand or decreasing in the face of fading orders, modifying the business in any aspect involves making difficult decisions.

The reduction of employees is a common decision management takes in the process of rightsizing. The layoffs can distress different departments of the company and/or the company as a whole. Conditional to the severity of the financial recession, the layoffs can be permanent or temporary. The company may also reduce employees due to reorganization, such as moving facilities. This involuntary separations can happens, as well, when the administration of a company decides to dismiss an employee because of their economic status or a poor fit between the employee and the company needs.

In addition to layoffs, companies can implement other measures to reduce costs in order to align expenses with their revenues.