4 ms·

This ! In france, its a classic move by big companies to have mbb formalize what they already know: a need to restructure which unfortunately involves firing p

This ! In france, its a classic move by big companies to have mbb formalize what they already know: a need to restructure which unfortunately involves firing people. Its easier to justify restructuring because mbb said so than because the company says so for some reason ^^

salamander014 7y ago
Companies trust capital expenses more than operational expenses for some strange reason. I don't know why.
- organsnyder 7y ago
  I think it's psychological. With capital expenses, the decision to spend a lot of money tends to be a discrete event/process, while operations usually grow slowly over time. We place inherent value in big purchases—after all, I decided to make the purchase, so it must be valuable.
- bumby 7y ago
  Cost Bias: A fallacy of ethos (that of a product), the fact that something expensive (either in terms of money, or something that is "hard fought" or "hard won" or for which one "paid dearly") is generally valued more highly than something obtained free or cheaply, regardless of the item's real quality, utility or true value to the purchaser.[1] [1] http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm
- sjy 7y ago
  Are consultants’ fees generally accounted for as capital expenditure? Seems more operational to me.
bsder 7y ago
> Its easier to justify restructuring because mbb said so than because the company says so for some reason Is it a legal thing? European regulation tends to be quite aggressive when people get laid off, so I imagine that an external assessment helps give some cover for that.
- jerven 7y ago
  No it's a people thing. People want a scape goat and McKinsey delivers those by the billable hour. Especially in near government institutions. Firing is somewhat more expensive, but if you want to close a location it is just an X million more not anything really complicated. Bigger chance the employees will be organized and fight in court, but in reality if management wants you out you will be. The consultants are for the people who stay. You fire some group A, then you fire your consultations then group remain feels "Safe" again, when the bad consultants are gone.
- user5994461 7y ago
  It's both. In France for example, there isn't a sane and legal way to unilaterally lay off a permanent worker. However there are provisions that allow a company to lay off whole percentages of its workforce if the company is planning to face financial difficulties or similar. This has to be justified somehow so better get external reports to cover your ass.

salamander014 7y ago

Companies trust capital expenses more than operational expenses for some strange reason. I don't know why.

organsnyder 7y ago
I think it's psychological. With capital expenses, the decision to spend a lot of money tends to be a discrete event/process, while operations usually grow slowly over time. We place inherent value in big purchases—after all, I decided to make the purchase, so it must be valuable.
bumby 7y ago
Cost Bias: A fallacy of ethos (that of a product), the fact that something expensive (either in terms of money, or something that is "hard fought" or "hard won" or for which one "paid dearly") is generally valued more highly than something obtained free or cheaply, regardless of the item's real quality, utility or true value to the purchaser.[1] [1] http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm
sjy 7y ago
Are consultants’ fees generally accounted for as capital expenditure? Seems more operational to me.

bsder 7y ago

> Its easier to justify restructuring because mbb said so than because the company says so for some reason Is it a legal thing? European regulation tends to be quite aggressive when people get laid off, so I imagine that an external assessment helps give some cover for that.

jerven 7y ago
No it's a people thing. People want a scape goat and McKinsey delivers those by the billable hour. Especially in near government institutions. Firing is somewhat more expensive, but if you want to close a location it is just an X million more not anything really complicated. Bigger chance the employees will be organized and fight in court, but in reality if management wants you out you will be. The consultants are for the people who stay. You fire some group A, then you fire your consultations then group remain feels "Safe" again, when the bad consultants are gone.
user5994461 7y ago
It's both. In France for example, there isn't a sane and legal way to unilaterally lay off a permanent worker. However there are provisions that allow a company to lay off whole percentages of its workforce if the company is planning to face financial difficulties or similar. This has to be justified somehow so better get external reports to cover your ass.