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Established in 1984, Donna Karan International Inc. is one of the leading international fashion design houses.

The Company designs, contracts for the manufacture of, markets, retails, and distributes collections of mens and womens clothing, sportswear, accessories and shoes under the Donna Karan New York, DKNY, DKNY Jeans, and DKNY Active brand names. The Company also selectively has granted licenses for the manufacture and distribution of certain other products under its brand names, including beauty and beauty-related products, jeans wear, active wear, hosiery, intimate apparel, eyewear and childrens apparel. 1. How was the restructuring and downsizing process different for Donna Karan than for other firms? Before that, what are actually downsizing & restructuring mean to us ? Downsizing can be defined as the planned elimination of jobs and also refers to activities undertaken by management to improve the efficiency, productivity and competitiveness of the organization by reducing the workforce size. For examplewhen a manager saw that the company's sales had fallenthe company undertook a number of efforts to identify what they called smart cost reduction by using TQM activities which help the company target quality problems and saved an estimated certain amount such as $30 millionBut the cuts were not enoughand ultimately president of the firm and vice president of HR and quality, realized the company needed to eliminate some jobs Instead of simply laying off peoplehowever, the company started early retirement and sweetened voluntary separation programs Meanwhile restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Alternate reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. For Donna Karan case, it may involved in restructuring that often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by the new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations. Its new three-year strategic plan included a major downsizing driven by the reduction of the number of divisions from thirteen to six. Donna Karan also streamlined the company's senior management structure and made each of the six divisions fully integrated operating units. Here, HR vice president Christina Nichols also helping to accomplish all of the changes. The company also experienced tremendous rapid growth which end up with decrease of profit and less efficient man and decide to made a difficult decision: to stop, evaluate what is the finding when done and readjust where necessary. Typically there had been a target percentage to be cut in each division. This time around, however, the downsizing was driven by actual restructuring within divisions in an effort to impact efficiency and cost savings.

Another significant impact on the restructuring was entrance into strategic alliances with other companies. This included the l/censing of the company's beauty business to The Este Lauder Companies Inc., DKNY jeanswear and activewear products to Liz Claiborne, and DKNY Kids to Esprit de Corp. 2. How are survivors affected by the downsizing Mainly there are three groups affected by the downsizing where those who go ,those who stay and those who deliver the new. In this case given, those who stay or the survivors need and deserves timely information about the purpose and progress of the downsizing. Communication is a two-way process when the staff in general and the survivors as specific term that doing statement of the tasks, duties, and responsibilities (TDRs) of a job to be performed in the organization and they impacted were come from all levels of people. With the new CEO with the management team trying to determine what the new structure would look like, trying to compile all the pertinent information for those employees who would be affected, coordinating outplacement services, and trying to coach management through the process. In the end, the company managed to pull together as a team to make it happen successfully. The company need to become the expert on the licensee's business so that somehow can best educate the Donna Karan employees who will transition to working with them. The survivors have to face the difficult time who transition to the licensee maintain the same level of compensation and benefits. Its a tough process because it doesnt end once the employees move over to the licensees [work environment]. The role in this process already has evolved from working within the existing framework and facilitating the process to championing what's best for the employee. But Donna Karan have to remember that still the survivors are the backbone of the company because most of the staff are talented group of people. With all the changes in the company, from the arrival of the new CEO to the restructure, the goals and focus of the human resources department have radically shifted to remain aligned with the company's direction as strategic business partners with the divisions in the company and also evolved from putting out fires and creating policy to well-rounded business partners.

3. What have been the major challenges of the HR department at Donna Karan? The aftermath of the restructuring process brings with it many new challenges. The employee population is dealing with the shock of losing co-workers, the stress of handling more responsibilities, and the uncertainty of their own job security. Responding to these concerns is difficult. The shock of losing co-worker will somehow reduce the inefficiency of the company whereby only a few left at the division which the company also lose the co-workers knowledge, skills and abilities (KSA) to run the division at the full strength. For the stress of handling more responsibilities, the remaining staffs will have to be multitasking where they have to cover the task that being left out of the co-worker to achieve sales target. Therefore, when dealing with the restructuring process, the company eliminated many jobs because of the decision to license various products. This was a fairly new direction for the company. But the company can counter the challenges by using Human resources planning (HRP) which HRP can be a powerful tool to Donna Karan. HRP is the process of anticipating and making provision for the movement of people into, within, and out of an organization. Its purpose is to deploy these resources as effectively as possible, where and when they are needed, in order to accomplish the organizations goals. Other, more specific purposes of HRP include anticipating labor shortages and surpluses; providing more employment opportunities for women, minorities, and the disabled; and mapping out employee training programs. In fact, HRP provides a launching point for most all of the activities that are subsumed under HRM.