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Friday, January 23, 2009

Solution to Recession is Not Throwing People from Their Jobs

Lay-off is Not Combating the Recession

Rather, it is cowardice.

Try to reason out as to who are the culprits of the world wide slow down/recession? The answer is: the decisions and actions of the people at the helm of the affairs of all kinds of organizations, companies, institutions and governments. The answer is: the greed, profiteering, irresponsible behavior towards the customers, abnormally (forced) high prices of lands/construction/buildings/houses/education/health care/all kinds of products, artificially jacked up stock prices, corruption/scams/frauds etc. It is the top management everywhere of every organization (including governments), that is the real culprit.

As an extreme statement, any Tom, Dick and Harry can run the organizations in good times. It is during bad times, they need to really run the organizations. It is then that their mettle can be tested.

Running the organization in such bad times does not mean chucking out people of the organization as the first and the easiest of all the solutions. And yet, how many organizations throw out their top management guys? Perhaps none.

The business sense will tell any fool that we need people to buy things. If you throw out a large numbers of people from their jobs, the purchasing power dips further which is one major cause of recession or slow down. Apart from that, you are putting millions of people and their families under the traumatic experiences without jobs. Families after families get uprooted when you throw them out of jobs during recession or slow down and many people have committed suicide due to the trauma of job loss and loss of earnings for the family.

Better solution will be to reduce the salaries of every one in the organizations and not lay off any one.

More salary cuts should be for the top guys of various organizations (including the ones in the governments) since their salaries are abnormally high in general and they are the ones who made horrendous mistakes and drove everyone to this disaster called recession. There have been numerous instances when despite recession and despite employees being laid off, the company top bosses distributed huge bonuses to themselves. And then, these same top bosses go to the governments (in other words, to the same public whom they are chucking out from their jobs) with the begging bowls for the bail-out money. More steep salary cuts of the top brass of the companies and moderate/reasonable salary cuts of other employees will bring down the salary costs of the organizations dramatically.

Then having achieved this, motivate all the people in the organizations to apply their minds towards further cost cutting. As a result, organizations will be in position to reduce the prices of land, construction, buildings, houses, education, health care and all kinds of products. As the prices become reasonably low and realistic and within the reach of people, they will start buying the things and investing in things. The whole resurrection will be absolutely painless.

Also, devise and implement stricter controls over the governance of the organizations (including those of external auditors and justice departments) so that the scams/frauds/corruption are brought down to minimum and ultimately eliminated.

Read the “inside” stories of the corporate sector at: (Management Anecdotes)

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