Company Strategies in Case of Financial Difficulties

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The situation in which the company for the production and distribution of solar energy finds itself is quite typical for the contemporary times. In an era of mergers and acquisitions of independent manufacturers by corporations, it is easy to imagine a firm in financial trouble. Directors are required to declare the impossibility of bonus payments that were taken for granted in previous periods of financial prosperity. The company is in a situation of inability to receive government subsidies or at least tax cuts. The highest priority task at the moment is to maintain the team spirit of the company’s employees, who are left without up to 30% of their salaries.

First of all, what should be said to directors at a meeting with employees is the truth in the form in which it is. Despite the news about the cut in bonuses will not come at the best time for employees, it is necessary to make a rhetorical emphasis on the fact that these were additional increases in work. One needs to present the situation in such a light so that it is clear that this is an isolated case, and that work will subsequently be done to redistribute finances. Workers need to understand that their superiors are concerned about the integrity of the team and understand from circulation that they have the opportunity to influence the best result in the future.

A crisis situation requires concentration and a clear plan of action for senior management. It is to maintain team spirit that management should share the latest information with workers about what is happening in the company and where it plans to move. Alerting employees about what is happening statistically lowers the uncertainty coefficient and, accordingly, affects the adequacy and strategic consistency of all further decisions (Ghoushchi et al., 2019, p. 28). For a senior manager, well-defined plan is required in which it will be expressed in stages what employees need to do for the mutual prosperity of them and the company. Creating a situation of general trust will set the company’s employees in the necessary mood in order to come to terms with the financial situation and understand their new tasks.

The bosses should go in a mutual dialogue with the workers and try to suggest counter steps in order to unite employees in times of crisis. Working under experimental or challenging research metrics increases the need to meet basic needs. Their implementation, in turn, increases motivation, but there is also a separately growing demand for it. Thus, by listening to the needs of employees that could facilitate their working conditions, there is a concrete opportunity to increase their motivation and performativity. At the same time, expanded work on motivation as such is required, including both collective meetings and improved ethical behavior in the workplace.

The methodology with which it is required to approach the solution of new problems in the conditions of the financial crisis should function according to the principle of categorizing the importance and necessity. Using such a calculation algorithm alone, a senior manager can determine which innovations need to be applied in the first place, guided by the principle of necessity (Yuda, 2020, p. 8). At the same time, the principle of importance allows to understand the priorities of the company in the long term and to understand the goals for which employees and bosses work. A sense of self-determination provides sufficient motivation for self-organization, and that is why management must let employees know how much they are needed in their place (Jungert et al., 2017, p. 3). By preparing a visual strategy and demonstrating how it is applied in reality, a manager can provide workers with evidence of the meaningfulness of their collective work.

Since the issue of bonuses will in any case seem to be a priority for employees, it is necessary first of all to stipulate how salaries will be recalculated in the future. There are a lot of possibilities for the implementation of various types of bonus payment systems, festive, at the end of the season, profit sharing. But the most popular and most appropriate in the context of the situation with this company seems to be the payment of a performance bonus (Pancasila et al., 2020, p. 387). Increased employee motivation is required, and additional deductions for improved quality of work could really affect the performativity of employees (Varkkey et al., 2017, p. 63). It is important, however, to convey that employees should work collaboratively, because in fact, this, not individual achievement, is the principle of successful work.

Most likely, questions among employees will begin to arise regarding a further possible merger. It is too early to think about this, as the company is in an unstable state, but employees must understand all the possible consequences of the merger. Acquisition of a company by a larger corporation can easily solve all of the company’s financial problems (Benitez et al., 2018, p. 26). Therefore, employees must be motivated to demonstrate the quality of work in the interests of further merger.

It is required to separately stipulate how motivating is the fact that most of the salary of employees consists of a bonus, and how fair such a strategy is in general. It can be argued that the uncertain financial environment in which the company’s employees were located can hardly be called motivating. In fact, the employees of the company were in a situation of constant risk of being left without profit, but did not notice it. Increased profits and accruals can have an undesirable effect on the employee. In such situations, there may be cases when an employee has an underestimation of the quality of performance or they require an even higher salary due to inadequately overestimated ideas about their professionalism.

Thus, the environment is not financially secure or stimulating. It gives motivation to work exactly until the moment when the opportunity for a monetary increase expires. If it is impossible to charge an employee with an inflated bonus, which they take for granted, the entire company is at risk of completely losing motivation and ending up in an extremely toxic work atmosphere. Apparently, the bosses themselves did not know what an unpleasant surprise they were preparing for themselves, unfairly accruing huge bonuses to employees. This distribution of income and the subsequent refusal of payments will be perceived primarily negatively, and the bosses will have to work hard to regain the trust of the team.

Thus, in order to neutralize defeatist or frustrated moods in the work collective, employees should be kept fully informed in advance. Employees should not have high expectations and illusions about their position in the company, but they should clearly understand why they are needed at their workplace. Payments adequate to the quality of labor should be at the heart of monetary interactions within the company. Before setting up to merge with another larger company, employees need to change their entire plan of action and reject previous ideas about their workplace in order to make it safer and better.

Reference List

Benitez, J., Ray, G., and Henseler, J. (2018) Impact of information technology infrastructure flexibility on mergers and acquisitions. MIS Quarterly 42(1), pp. 25-44.

Ghoushchi, S. J., and Khazaeili, M. (2019) G-numbers: Importance-necessity concept in uncertain environment. International Journal of Management and Fuzzy Systems 5(1), pp. 27-32. DOI: 10.11648/j.ijmfs.20190501.15

Jungert, T. et al. (2017) How colleagues can support each other’s needs and motivation: An intervention on employee work motivation. Applied Psychology 67(1), pp. 3-29.

Pancasila, I., Haryono, S., Sulistyo, B. A. (2020) Effects of work motivation and leadership toward work satisfaction and employee performance: Evidence from Indonesia. The Journal of Asian Finance, Economics and Business 7(6), pp. 387-397.

Varkkey, B., Korde , R., and Wadhawania , S. (2017) Changes in the executive bonus payment patterns in India between 2008-16: Some evidences. Compensation and Benefits Review, 49(2), 63-86.

Yuda, I. (2020) Decision support system for employee bonus determination with web-based Simple Additive Weighting (SAW) method In PT. Mayatama Solusindo. Journal of Applied Engineering and Technological Science 2(1), 7-13.

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Company Strategies in Case of Financial Difficulties

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