According to British Broadcasting Corporation (BBC) news published on 28 October 2019, HSBC Company is currently planning to re-organize and restructuring its business operation entities after one of the significant financial banking institutions said its level of performance in most of Europe and United States of US is not acceptable.
At the beginning of this month, that is October 2019, the giant banking institution (HSBC) which had employed 238.000 human resource team which comprises mostly local citizen was reported having formulated its plans of cutting town up to 10,000 social resource team (BBC News 2019). It was considered unethical practice the company did not provide clear clarification and reasons why the company is planning to offload its 10,000 human resources team (BBC News 2019). According to the interim executive manager, Mr Noel Quinn during an interview said that the earlier planned practices which were formulated with the primary aim of improving the divisions are not currently sufficient enough to enable the company to continue with its plan of increasing the human resources team.
According to him, there is broad scope through which the banking institution has its well-established policy framework which provides clarification and the simplified role which grant it a responsibility of reducing the duplication of human resource. However, the interim manager fails to provide credible enough n evidence regarding the potential and specific condition which cannot be solved by any other means.
According to the labour act, employers, should not be subjected to impromptu or instant job cuts without a valid reason based on the law of the land. It was unethical for the interim company manager to job cuts without provision of proper communication alongside with legitimate reasons for job cuts. It is also crucial for the company to establish a framework for compensation and support of the affected groups. Based on the HSBC scenario, the company needs to formulate how they will compensate 10,000 concerned human resource team (BBC News 2019).
A company believes that its corporate structure has to do with the failure of the existing business model or the need for more job cuts. The structure is supposed to help the company in moving forward and improving the business, but it comes with other fallouts for the employees, especially. Employees are more worried about the loss they will incur because the restructure means job uncertainty hence causing more panic and wonder how the changes will affect their job security.
Some employees start to look for new employment as soon as the news gets out that the company is planning to restructure. All the stress available in the process of restructuring may take the focus of the employees from their actual work (Radulescu & Dirva, 2018). They become more worried if the company is not forthcoming with details concerning the restructure. It is necessary for the company to show transparency that will allow these employees to have some idea of what is happening so that they may be at ease.
Corporate restructuring is not a slight innovation and could lead to the shifting of the public image (Alias et al., 2017). The restructuring leaves the customers as well as the public questioning the future. Companies wishing to restructure should ensure that they consult about the same and get the views of a public relations consultant on the strategy they should use for such a venture.
Alias, N., Yaacob, M. H., & Jaffar, N. (2017). Governance structure, corporate restructuring and performance. Polish Journal of Management Studies, 15. Retrieved from http://yadda.icm.edu.pl/baztech/element/bwmeta1.element.baztech-c0c4935c-122b-451f-b674-fac5c914d93f
BBC News (2019). "HSBC restructuring plans fuel fears of job cuts" 28 October 2019. Retrieved from https://www.bbc.com/news/business-50204701
Radulescu, A. S., & Dirva, C. (2018). Corporate Restructuring and Tax Arbitrage Strategies at International Level. Revista de Management Comparat International, 19(3), 264-273. Retrieved from http://www.rmci.ase.ro/no19vol3/04.pdf
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