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Interclean Generic Benchmarking

Running head: InterClean Generic Benchmarking

InterClean Generic Benchmarking
Anabel Garcia
[Additional Authors]
University of Phoenix
MBA 500
Abstract


Circuit City: Anabel Garcia
Issue
At the beginning of the 2007 fiscal year, Circuit City (CC) announced that it would layoff more than 3,400 of its highest paid employees (Business Week, 2008). The goal of this reduction in personnel was to reduce internal costs by eliminating a large percentage of CC’s upper and middle management. The main issue with this reduction is CC has lost most of its skilled employees and customer satisfaction has plummeted. CC needed to make changes in order to cut costs, but it failed to integrate staffing practices with strategy (Dreher & Dougherty, 2001). The result of this and many other failures at the upper management level is CC shares have fallen 28% in the last year.
Strategy
The strategy CC chose to use seemed quite simple. Fire its employees and re-hire them at a lower “market rate” wage (Business Week, 2008). This would undoubtedly save the organization a great deal of money and CEO Philip Schoonover thought it was an excellent solution. The problem was CC failed to realize it was firing its key customer service representatives. The employees who made contact with the customers on a daily basis were being let go.
Results
The result of CC firing thousands of employees is it saved money on salaries, but lost a great deal more in sales while increasing customer dissatisfaction. CC failed to integrate staff practices with strategy. These practices require an organization to characterize explicitly its business strategy then make judgments about if existing staffing practices appear to be aligned with strategic orientation. CC fired personnel but failed to see the effects these cuts would have on staff and its ability to satisfy customer needs. The result of this decision is CC shares tumbled to $4.80 during trading on December 21, 2007 hitting a new...