Case Study

Should Companies That Fire Shoot First?

CASE INCIDENT - SHOULD COMPANIES THAT FIRE SHOOT FIRST?

In the recessions in the early 1990s and after the 2001 terrorist attacks, layoffs were fairly private
affairs. News often leaked out to local and national media outlets, but companies did their best to
keep it as quiet as possible. Given the growth of the Internet in general and of social networking
sites in particular, thats no longer possible.
When Starbucks laid off employees in 2008 and 2009, the Web site StarbucksGossip.com
received a barrage of posts from disgruntled employees. One 10-year employee wrote, This
Company is going to lose every great partner that it has. I am sick and tired of being blamed for
not meeting my budget when the economy is in a recession. I used to be proud of my company
now I am embarrassed and feel physically ill every time I have to go to work.
Some companies are taking a proactive approach. When Tesla Motors laid off employees, its
CEO Elon Musk posted a blog entry about it just before announcing the layoffs internally. We
had to say something to prevent articles being written that were not accurate, he said.
Today, whatever you say inside a company will end up in a blog, says Rusy Rueff, a former
executive at PepsiCo. So, you have a choice as a companyyou can either be proactive and
say, Heres whats going on, or you can allow someone else to write the story for you.
Illustrating the perils of ignoring the blogosphere, when newspaper giant Gannett announced it
was laying off 10 percent of its employees; it posted no blog entries and made no statement. Jim
Hopkins, a 20-year veteran who left the company just before the layoffs, writes the unofficial
Gannett Blog. I try to give the unvarnished truth. I dont think the company offers the same
level of candor to employees, he said. Gannett spokeswoman Tara Connell replied, We attempt
to make those personal communications happen as quickly as possible. Says blog expert Andy
Sernovitz, There are hold-out companies that still wish there was traditional P.R. control of the
message, but that day is long over.

Organizational Behavior and Analysis

Page 1

Case Study

Should Companies That Fire Shoot First?

Questions
1. Do you think Tesla CEO Elon Musk did the right thing when he blogged about impending
layoffs just before announcing them to employees? Why or why not?
2. Do you think employees have a responsibility to be careful when they blog about their
company? Why or why not?
3. Do you think employees who blog about their companies have an ethical responsibility to
disclose their identities?
4. How can a company develop a policy for handling communication of sensitive issues inside,
and outside, the company?
____________________________________
Sources: Based on C. C. Miller, In Era of Blog Sniping, Companies Shoot First, The New York Times
(November 5, 2008), pp. B1, B11; M. Allison, More Layoffs Expected at Starbucks, Seattle Times (January
24, 2009), seattletimes.nwsource.com; and C. Hirschman, Giving Voice to Employee Concerns, HR
Magazine (August 2008), pp. 5153.

Organizational Behavior and Analysis

Page 2

Case Study

Should Companies That Fire Shoot First?

SOLUTION TO THE QUESTIONS GIVEN IN THE CASE

Introduction
Blogging and tweeting on social media websites have pros and cons for an organization.
Companies utilize blogs in order to promote their products and services along with relaying
information about the company to the general public. Employers often encourage their
employees to participate in various forms of social media. However, management should be
aware of the risks and impact to the companys reputation should the employee publish
something that puts the company is a negative light.

1. Do you think Tesla CEO Elon Musk did the right thing when he blogged
about impending layoffs just before announcing them to employees? Why or
why not?
ANSWER:
YES, Tesla CEO Elon Musk was right when he blogged about impending layoffs just before
announcing them to company employees
Blogging and tweeting can have both positive and negative impacts on the image and reputation
of a company. The use of social media sites, such as Facebook and Twitter, allow employers to
encourage their employees to participate in blogs in an effort to promote their brand. Some
companies even use these websites as a tool to publicize the operations of the organization. By
establishing and maintaining their own company website and blog, businesses are able to control
the messages, both positive and negative, that are posted. In an effort to intercept negative posts
from the media and disgruntled employees, Tesla Motors CEO Elon Musk announced on the
companys website blog that in order to maintain positive cash flow, the organization will lay off
a significant amount of its workforce.
The focus of the company will be developing and improving its product line while ensuring
sufficient capital. Elon Musk stated that we had to say something to prevent articles being
written that were not accurate.
Organizational Behavior and Analysis

Page 3

Case Study

Should Companies That Fire Shoot First?

2. Do you think employees have a responsibility to be careful when they blog

about their company? Why or why not?
ANSWER:
YES, Employees have a responsibility to be careful about what they publish on social media
websites about their company. Privacy laws and regulations related to internet use vary by state.
Depending on the nature of the content, the employee could be possibly incriminating
him/herself by disclosing private information. From an employer standpoint, employee blogging
could negatively impact the reputation of the business if the appropriate policies and procedures
are not in place. The employer may also be at risk if the employee publishes information relating
to trade secrets, financial issues, or other business related matters. Employees should be careful
if they publish negative comments about their employer, its customers, and its vendors.
Employers typically have zero tolerance with this type of behavior as it can be considered a form
of harassment in which the company may subject to legal ramifications. The employee risks
losing their job and tainting their reputation within the workplace, which may lead to difficulty in
obtaining and retaining future employment.

3. Do you think employees who blog about their companies have an ethical
responsibility to disclose their identities?
ANSWER:
YES, during past downturns, layoffs were mostly a private affair. Big companies tended to issue
vague press releases filled with jargon about downsizing, and start-ups often gave people the
pink slip without telling the world anything at all. Not anymore. In the age of transparency, the
layoff will be blogged. I think employees who blog about the company he should also reveal his
identity. If he or she doesnt do so then it is an unethical behavior. Because sometimes if the
news is wrong then it might misguide the people and sometimes employers get furious and begin
to doubt all the other employees also. The employees also think who do so this but all of them
remain in fog. But it is also mentioned that there should be such environment where they can
Organizational Behavior and Analysis

Page 4

Case Study

Should Companies That Fire Shoot First?

publish anything legal whether it is good and bad for the company. So it becomes clear who are
saying this and what he intends to say.

4. How can a company develop a policy for handling communication of

sensitive issues inside, and outside, the company?
ANSWER:
Company can handle communication of sensitive issues inside and outside the company through
social media. They can use different techniques suppose they will give identification number and
password for separate employees. So every employee who wants to post something he may have
to register for this. So anyone other cant post through his Id. And anyone from outside cant see
what is going on inside the company.
Moreover, deleting or retracting online posts that have been published can be impossible.
Therefore, companies should develop an internet policy for handling communication of sensitive
issues both inside and outside the organization. While the company may want employees to
express themselves, guidelines should be established. Some of the areas that need to be
addressed in a formal, written policy include:
a) Personal use and abuse of company property and resources
b) Appropriate use of organizations name
c) Applicability of existing company policies
i.

Harassment inappropriate comments

ii.

Privacy

disclosing

confidential

information/trade

secrets/financial

information/falsifying data/using company logos/using company name to promote

products. Employers may want to consult with an attorney or human resource
specialist in order to ensure that they develop an internet policy that will help to
prevent any negative public relations regarding the company and its products and
services.
Organizational Behavior and Analysis

Page 5

Case Study

Should Companies That Fire Shoot First?

CONCLUSION
Since social media is becoming an essential part of the business world, companies should invest
in learning about the rewards and consequences of using this source. By obtaining an
understanding of the advantages and disadvantages, the company will be more equipped in
handling negative (as well as positive) public relations and have a plan for damage control for
repairing their tarnished reputation.
In addition, we have moved into more of an electronic communication era than ever before,
which allows not only companies but their employees to communicate publicly and globally.
Companies have the right to protect themselves against employees, ex-employees or even
disgruntled employees by creating communication policies as guidelines for their employees.
These individuals also have the right to hold themselves responsible when posting or
communicating about the company they work for.

References

Neves, P., & Eisenberger, R. (2012). Management Communication and employee

Performance: the contribution of Perceived organizational Support, Human performance

Scott, D.M. (2005) Big Business Blogging. Econtent,

Freedman, D.H. (2006) when your company screws up, dont hide it blog about it. And
let everyone learn from the error. Inc.,

Your blog or your job. (2006) Career world,

http://www.itbusinessedge.com/cm/blogs/all/blogging-the-layoff/?cs=11727

http://www.nolo.com/legal-encyclopedia/employee-posts-facebook-myspace-twitter32954.html

http://dealbook.nytimes.com/2008/11/05/in-era-of-blog-sniping-companies-

shootfirst/?_php=true&_type=blogs&_r=0

Organizational Behavior and Analysis

Page 6

Case Study

Should Companies That Fire Shoot First?

http://www.motivateandinspire.com/ME2/Audiences/dirmod.asp?
sid=04BF7B8C765E455DA06A7B6781ED0847&nm=LinkGrabber&type=Publishing&
mod=Publications::Article&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=
7C0FA76B4F4A4E53B4D97C3A4B2487EC&AudID=AA83ED248A3241A5AE080E2
B6DED1F5F

Organizational Behavior and Analysis

Page 7