FNSINC514 - CS2 - Case Study Questions

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Monarch Institute *

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Feb 20, 2024

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FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions Case Study #2 Questions (Downsizing) Scenario Instructions Page 1 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions What you need to do: Answer the questions below by writing in the space provided. You are required to answer all questions correctly. If correct, you will see ‘Satisfactory’ or if incorrect you will see ‘Not Satisfactory’ in your grades section of your learner portal next to the assessment name. The assessor will provide feedback and a Record of Results in the assessment task once graded. You will be required to resubmit your work for any ‘Not Satisfactory’ assessment tasks. What you will need: Use the learner material provided in your online student portal as well as research materials such as books, internet, magazines, workplace documentation etc. to assist you in gaining the knowledge required to answer the questions. Remember that the assessment task is self-paced and open book. You can use whichever resources you have to answer the questions. What you need to submit: Your answers to these questions. How to Submit your Assessment: Upload your completed document into your learner portal following the instructions provided within the assessment task. You can drag and drop the file into the window or use the add file icon in the top left of the submission window and select the file your wish to upload by using the browse/choose file option. Click on “ finish attempt ” to submit it for grading. Page 2 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions Scenario 2 – Downsizing You are the Human Resources Manager of TheBank Corporation and have been convened to a special meeting with the head of the Corporation. A presentation of the corporation’s latest financial situation was conducted, including a risk analysis on the sale objectives that had been achieved during the same period. The Stakeholders shared their concerns about the Bank, as well as the recent economic recession putting pressure on operations and were seeking quick managerial decisions around staffing levels. Managers as well as heads of departments were consulted to analyse the context of the situation and were given a chance to actively participate in the development of potential resolution actions. However, to adapt to the economic slowdown and reduce costs, downsizing was selected as the most viable option. The bank is consistently monitoring its liquidity coverage ratio to comply with APRA’s ADI Prudential Standard 210, and the risk of a potential bank run following the downsizing decision has been thoroughly assessed. It has been agreed that two hundred employees will be laid off, and you have been instructed to develop an ethical plan of action to determine the terms of this decision and which workers are to be dismissed. You are also required to oversee the creation of a transparent communication plan throughout the company. Based on the supporting documentation and the information you hold, complete the activities below. These activities will assess your ability to apply an ethical framework and related principles in order to make and act upon decisions. Page 3 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

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FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions Question 1 Analyse the context of the situation using an ethical decision-making framework and determine the preferred course of action by developing an implementation plan below: What is the context of the situation (what has incurred the ethical situation)? The context of the situation is the need for TheBank Corporation to adapt to the economic slowdown and reduce costs due to the recent economic recession. This has resulted in the decision to downsize the workforce by laying off two hundred employees, which may raises ethical concerns about the impact on the affected employees and the stakeholders involved. Who are the key stakeholders involved? Employers, Employees, clients, shareholders/investors What alternative to the downsizing decision could have been considered? Alternative could be reducing employee hours, hiring freeze, offering early retirement packages, succession planning, introducing value-added and revenue-enhancing opportunities or designing cost- cutting measures in other areas of the business, What actions do you need to organize/develop to implement the downsizing decision? Develop a clear communication plan to inform all stakeholders about the decision. Establish a fair and objective selection process. Provide support and resources to the affected employees. Ensure that remaining employees are informed about the changes and provided with support and resources to manage the transition. Question 2 As part of the transparent communication plan, you are to draft a formal letter highlighting: ● the current economic context ● the unfortunate but necessary decision that has been taken ● that the terms and conditions of the downsizing are yet to be finalized and will be communicated as soon as possible This letter needs to acknowledge the stakeholders’ concerns, is to be delivered to all staff of the company and should be no longer than one page. Dear Staff Members, Page 4 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions We hope this letter finds you well. We are writing this email to address the current economic situations that has been affecting our business from last couple of months, and unfortunately, After careful consideration, management have decided to downsize the workforce is the most viable option to help us to adapt the present economic slowdown. We are aware that this decision may cause concern and uncertainty to all workforce, may cause stress and Anxiety. At this point of time, we want to assure you that we are working on finalizing the downsizing terms and conditions. We promise to do all necessary adjustments in a reasonable and transparent manner, while we are in the process of doing. We understand that in this difficult time, wanted to assure you that we are here to provide support and resources and assure that everyone will treated in fairly and help you manage the situation. We will be communicating with you regularly to keep you informed about any updates. We are grateful for your understanding and patience during this challenging time, and we thank you for that. Regards, Chandana. K Human Resources Manager, TheBank Corporation. Question 3 Analyse the potential impacts that the decision may have on the following stakeholders. Stakeholders: Potential impacts: Dismissed employees The dismissed employees may experience financial hardship due to loss of income. They may also experience emotional distress, loss of self-esteem, and a sense of betrayal since they may have grounds for a lawsuit. TheBank corporation provide support and resources to help them manage the transition. Retained employees The Retained employees may experience stress and uncertainty about their job security and increased roles & Responsibilities. It could also lead to a decrease in wages and benefits because budget of the company. The corporation should provide support. Page 5 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions Managers & Head of Department The Managers & Heads of Departments may experience stress and pressure in developing and implementing the downsizing decision. They need to re- organise the staff structure and reassign responsibilities. They may also feel loss of trust and security from the remaining employees. Question 4 When the downsizing decision will be revealed to the public, evaluate the impact that it may have on the organization’s reputation. Downsizing decision, when revealed to the public, can have a significant impact on the company's reputation. And the public may perceive as an indication of poor financial management, lack of concern for employees' well-being, or a failure of leadership. The impact of the downsizing decision on the organization's reputation will depend on a number of factors depending on how the decision is communicated to public, it could either effect or have a positive impact on the organization's reputation. if downsizing is poorly communicated or implemented, that will perceived as unfair or unethical, it may lead to a loss of trust and confidence in the organization stakeholders. Downsizing may leads to major job losses or impact the quality of products and services, it may lead to negative feedback from customers and investors, which can further damage for the organization. Therefore, it is crucial for the organization to take a measurable approach to manage its reputation in this difficult economic time. This includes developing a clear and transparent communication plan, providing support to the affected employees, and supporting to the retained employees are informed throughout the transition. Ultimately, how the downsizing decision is communicated and how it is perceived by the public will determine its impact on the organization's reputation. Question 5 Page 6 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

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FNSINC514 – Apply ethical frameworks and principles to make and act upon decisions (Release 1) Case Study #2 (Downsizing) – Case Study Questions Identify what regulatory requirement the bank would breach if it failed to address the potential liquidity risk faced in this situation. If a MyBank Corporation fails to address the potential liquidity risk faced in downsizing the staff, it could breach APRA's ADI Prudential Standard 210. While the standard encompasses various aspects of liquidity risk management, downsizing staff could impact the bank's operational capabilities and potentially its ability to meet liquidity cover ratio. Key elements that may be relevant in the context of downsizing staff and managing liquidity covered ratio risk include: Sound Governance and Policies: ADIs are required to have sound governance arrangements and policies for managing liquidity risk, including downsizing staff. Stress Testing: Downsizing staff could be considered a significant change in operating conditions, and the bank should assess its impact on liquidity through stress testing. The consequences for non-compliance may include regulatory intervention, increased supervisory oversight, and enforcement actions and penalty. So, It's important to note that regulatory standards and requirements should be satisfied. Page 7 of 7 © Real Estate Academy Australia Version 1.0 – July 2022 RTO 32426

FNSINC514 - CS2 - Case Study Questions

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