Acer Incorporated
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Submitted by kathykcheng on November 30, 2007
Category: Business
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Acer Incorporated emphasized a піÐculture of the common manпіРeven 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 90піÐs 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 companyпіÐs 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