Retrenchment Flashcards
1
Q
What is retrenchment?
A
A business making cutbacks
2
Q
What are some problems of retrenchment?
A
Damage to reputation
Damage to employee morale
Loss of skilled staff
3
Q
Describe freezing recruitment and voluntary redundancies
A
Lower labour costs and less wages
Employees unhappy with loss of team members
No new ideas
4
Q
Describe delayering
A
Removing a layer of management
Less dis-economies of scale experienced caused by communication
Wider span of control requires skilled managers
5
Q
Describe closing a factory, outlet or division of a business
A
Less rental costs
Loss of jobs
6
Q
What drives retrenchment?
A
Costs
Low ROCE
High gearing
Loss of market share
