David Dunwood Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Recall Dun wood’s handling of the severance issue with the Board. How might Dun wood have avoided the difficult situation he found himself in?

Due to the worst financial condition of the company, it became impossible to retain the team of ten people responsible for site selection, site construction management and planning and design. Their layoff would save the company $600,000 in salaries and $900,000 in expenses and fees. The layoff has to take place in December because if Dunwood waited after the Christmas holidays, it would cost $100,000 in additional salary, benefits and expenses to the company. It was a tough decision to take. Therefore, he decided to develop a generous severance package to make the redundancies less painful for employees. However, the board of directors had mixed views about the plan. Some of them agreed to the plan, but others were furious and considered their right was being given to these employees.

He did not understand the reasons for the initial success of the company. He though that the company grew due to the strategies and the plan he had developed, however, it was weather conditions that helped the company to grow initially. The inability to understand the success factors led to the extensive growth strategy at times when they were not appropriate. He also lacked experience in this market, therefore, unable to compete with the competitors. Therefore, he must have assessed the risks faced by the company when he decided to purchase it. As the DIY market was growing at the rate of 1%, it was not appropriate to open stores aggressively.

Dunwood was unable to gel three parts of cultural intelligence together. He became disappointed when the sale of stores fell with the increasing competition. He was unable to assess the dynamic changes that had taken place and act accordingly. Finally, he was unable to inspire his employees that their company can come out of trouble if they believe in their abilities. If he did not lose hope and assessed the external environment with his senior management team, he could come up with ideas that would help the business to come out of trouble (Mosakowski).

He did not have a realistic vision for the company that true leaders possess. A true leader is one who creates high-performing teams. They care about their employees. They encourage discussion, actively consider the different point of views and inspire employees to think creatively while pursuing a common mission. However, while developing the severance plan, he did not take employees as well as board into confidence. If he had taken them into consideration, he would have come with a better plan acceptable to both the employees and directors (Brooke, 2012).

Assume that Dunwood have reached a mutually satisfactory resolution regarding the appropriate amount of severance. Outline your suggested approach for implementing your layoff of the company’s site expansion team. What are the major components of your communication plan?

The communication plan will be developed taking into account its goals and outcomes. The main objective of this plan is to communicate the reasons and the benefits of this change to the organization. It would be emphasized that despite efforts made by management to stabilize the position, it has not been able to control the external factors and redundancies have become inevitable.

David Dunwood Case Solution

Communication with the Board

The board will be informed about the deteriorating financial conditions of the company. For instance, the holder’s equity has declined to a negative of $4.2 million and the company is expected to survive only four to five months.
The resultant savings that would result if these employees are made redundant. For instance, the savings of $600,000 in salaries and $900,000 in expenses and fees.
The timelines to make them redundant. If they are not made redundant before Christmas holidays, it may cost additional $100,000 to the company. Therefore, there are more chances that they are made redundant before holidays.
The severance benefits provided to them.
Their value to the company as compared to the cost. As they were hired to expand the business but the company lacks funds. Therefore there is no point in keeping them in the business.

Once the board approves the plan, it should be communicated to the affected employees

Communication with the redundant employees