Also contributing is the temporal immediacy — although the reps had known changes were coming, the firings were immediate. The proximity level was high, since the changes had direct impacts on the sales reps and their staff, with a ripple effect throughout the organization. The concentration of the impact was high as well — many others in the company had their jobs spared, and may even have benefited. The sales reps themselves were directly targeted. Each of these factors contributes to a high degree of ethical intensity.
4. Walsh and Mangel arrived at their decision in part by trial-and-error and in part by developing a strategy. Their first decision — to transition with both salaried reps and commissioned ones — was the trial and error component. While there was forethought, there was no research and no concrete decision-making process that lead to that decision. As a result, the decision was not a success.
The second decision — to fire all of the commissioned sales reps was in part a response to the failure of the first decision, but it was also a part of an overarching strategy. The company had its mission change, and firing the reps was a necessary step in the fulfillment of that new mission. The decision to make the change, therefore, was simply a reflection of the strategy that Scout was undertaking in response to a multitude of changes in its operating environment.
5. The approach to change illustrated in this case is one that emphasizes the swiftness of the action. The failed first approach was a soft approach that emphasized compassion, as the needs of the sales reps were considered and even given priority over the needs of the company. The second decision was more strategic in nature. The change was deemed to be strategically necessary as a result of changes in the external environment. Therefore, the final decision was made in response to what was essentially a crisis in that the owners were not making money while the sales reps were making excellent money for doing what had become a low-skill job.
Managements approach, then, was to ignore the concerns of the workers and place the emphasis on making the right decisions for the company. Long-range vision was developed first, in order that the changes driven were the ones that needed to be made. The first change that failed was likely a reactionary change driven by the need to cut costs. That the first change provoked crisis served to spur the need for wholesale change at a philosophical level. With strategic management principles in mind, the change was guided by.