This synopsis will describe how an issue faced by Honeywell was similar to issues presented in the Global Communications scenario. It will show how Honeywell applied some of our class learning concepts to their decisions and the outcomes of these actions.
An issue faced by Honeywell that is similar to Global Communications is the decision to use outsourcing which resulted in layoffs. HoneywellÃÂs Industrial Automation and Controls group was affected when the circuit board assembly operation was outsourced to a contract manufacturer in China. The decision to outsource was lead by the supply management team and focused primarily on saving money.
Around the same time, HoneywellÃÂs Space and Aviation Controls group determined to outsource their mainframe, server, and engineering systems in support of an e-business platform for marketing. This decision was made to outsource an important function, but one that was not a core competency of the business.
Outsourcing
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A 1990 Honeywell-Bull DPS 7 mainframeThe main driver was to allow the business to focus on their strengths while letting experts with a proven track record handle these ancillary functions.
Class concepts usedBoth groups used organizational communications techniques to help deal with the negative consequences of the resulting layoffs. Through employee surveys, and encouragement for managers to use MBWA (Management by Walking Around) techniques the company had the pulse of the employees. Interpersonal and process barriers were broken down and the company identified ways to minimize the negative impacts to the workforce. Information overload was reduced by the holding of weekly meetings to discuss individual aspects of the companyÃÂs plans.
As a result of better understanding the emotions and needs of the workforce, early retirement packages were offered with substantial benefit increases. Outplacement services were brought on site to assist those destined for layoff to improve their resumes and learn job finding and interviewing skills. A general feeling that the company cared about its people pervaded.
OutcomesThe personnel results achieved by Honeywell were very minimal employee dissatisfaction, as measured by very few labor relations lawsuits and no effective results in unionization efforts that succeeded. Within six months after the outsourcing and layoffs the majority of the displaced workers were either successfully retired in better than expected financial shape or gainfully employed in other positions; most within the greater Phoenix area.
The desired company results, however, varied. The Industrial group found that within 5 years it was necessary to bring production back to domestic contract manufacturers due to cost overruns and an inability to carefully manage the products. The flexibility and control of an in-house manufacturing capability was never practical to start again at that facility.
The Space group was successful in their outsourcing effort due to deeply understood reasoning and careful planning. The outsourced operations were not core competency and there was no need to develop the expertise in-house.
In an interview with analyst Saroja Girishankar for Information Week, Ron Trasente, former VP of IT for Space and Aviation Control at Honeywell, said that a key lesson learned was, ÃÂDon't let cost reduction be the only reason for outsourcing.ÃÂ (Girishankar, 1999, para. 11).
For both groups, however, the results achieved with the workforce were well managed and successful due to good use of key communications techniques.
ReferenceGirishankar, S. (1999, November 15, 1999). Outsourcing lets Honeywell stay on course. Information Week, 152, 1. Retrieved February 21, 2008, from http://www.informationweek.com/761/sshoney.htm
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