Acer

Acer Incorporated emphasized a "culture of the common man" even through globalization and expansion. As a result of their economic success they were highly regarded as a role model for Taiwan business. However, the competitive PC market of the early 90's was sluggish and saturated not only by first level competitors like IBM and Apple, but second level competitors like AST, Everex and third level knock-offs. Therefore, Acer needed to consider its next step. Stan Shih the CEO and Chairmen faced the agonizing issue of laying-off many of its employees due to the financial distress of the company. This decision would affect the lives of the employees, culture of the company, but most importantly company's reputation.

There were many contributing factors managers thought lead to the loss in profit, especially that of the economy. Yet, the main reason management pinned for the decrease in sales and profits was due to the decision of excess workers and production capacity for the anticipated growth within the industry. Unfortunately, by the end of the year it was clear that the market was not growing at the rate they expected. Acer needed to cut cost in order to remain profitable.

It is difficult for an international company like Acer to abide by many of the cultural rules that regulate the culture and reputation of the company. Luckily, Acer has the advantage of having a Taiwanese background, but that does not always provide easy answers to difficult decisions. There are several possible solutions to this financial situation.

Acer could lay-off complacent workers based on their performance evaluation. This would give employees the incentive to work harder since they would feel their jobs were in jeopardy. The case stated that many employees were too comfortable working for a large, international, and prestigious company. They no longer felt the pressure that existed during the earlier years. Part of the problem was Acer no longer provided challenging jobs especially since employees were trained in two jobs allowing them backup. This strategy was inefficient, since there were two sets of responsibilities for each person meaning two people had to agree on every decision. Also, based on outside analyst the lack of close supervision correlated in higher overhead cost. For every 100 unnecessary middle managers, the company is losing over a million in profits. This employee evaluation would help managers assess where they are spending their money and if it is the most effective plan.

Another option for Acer would be to lay-off 10% of the employees from each department. This might be the fairest from a collectivist cultural perspective. On the other hand, this may not benefit Acer in any way, especially if they were firing their engineers rather than assembly workers. The lay-off might also trigger an incentive for employees to work harder and increase motivation, which seems to be lacking in the company. This tactic may keep the employees frightful