27

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27. “A company’s long-term success is primarily dependent on the job satisfaction and the job security felt by the company’s employees.”
Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

Is it true that job satisfaction is of such importance it is the key to a company's long-term successes? Certainly, the author thinks so. Perhaps there are some merits to the thinking and many people will side with the author and support his claim. In my view, placing heavy importance on job satisfaction and job security can hurt a company more than help the company because the nature of today's market and the transparency of businesses that stockholder demands.

Most importantly, today's market no longer tolerate mistakes. Heavy investment in job security can greatly deter a company's prospects of advancing since your current employees may not have the necessary skill set to meet the need of the market. For instance, software industries are known for its constant changes in its programming languages. If a company places heavy focus on job security will have to suffer the consequences of dwindling learning ability of its aging workforce. The software company may want to build new applications in new languages, which offers many more new features and better performances, but its workforce may not be adequate enough to perform the task. In additional, heavy focuses on job security can lead the company down a path of not letting go poor performance analysts. This is particularly deadly in investment firms, such mistake can cause company millions or even trillions of dollars. The fall of Enron was a great example despite most people would credit its failure to bad accounting and unethical business practices. However, if bad investment was not made in the first place would Enron had to cover it up? Enron was named the best employer for many years for a reason because it refuses to let bad investment analyst go. Consequentially, these analysts continue to book sub-par investments. So in my point of view, the culprit that led to Enron's scandal and failure was its policy to ensure job security even in cases of bad performances. Their CEO’s faithful belief that these analysts would do better the next year, the next year after, eventually ended Enron's life.

Additionally, transparency demanded by today's stockholder will not allow one to hold on to people who are either not performing or can't perform. Investment analyst and media will soon spot the weak points in a company and ask it to change. Failure to change will end up not only in poor returns but also the loss of confidence from stockholder. Take HP for example. After the merge with Compaq, it had to slash its workforce several time to reduce its human cost and meet the expectations of stockholders. Even though it was quite unfortunate to let go many good individuals but for the long-term success of the company it was a must do.

Admittedly, excessive cost cutting resulted from layoffs can lead to poor performance and poor synergies among workers. For instance, Circuit City’s excessive layoffs in sales representatives were the biggest culprit to its bankruptcy. The board of Circuit City was made to believe that new-hires in sales are just as good as the old one if right training is in place. A deadly mistake made by their leader eventually caused the closing of thousands of Circuit Cities across the states. There are many cases like such but one must understand that these cases are different from making job security the primary key to long-term success. Cases like such are great examples to show that people should be cautious while making extreme moves and the executors of these strategies should weight on both-side before taking actions.

In sum, basing my conclusion on examples and reasons mentioned above, job satisfaction and security should be considered but not make primary. Their importance should be placed after performance and alignment with market, namely having the right people for the right job and making the tough decision when it has to be done.