Real options in the assessment of collective dismissal procedure, focused on the collective dismissal procedures of spain

This paper aims to explain how the inclusion of real options may significantly improve the assessment of collective dismissal procedure. During crisis times, like the one Spain has been going through on the last years, the 'collective dismissal procedure is an important issue to be considered within companies that are having a negative economic situation. Based on the flow of savings generated by the reduction in the workforce, the different variables that may produce uncertainty in the future are analyzed concluding that the demand is the factor that creates this uncertainty and gives value to the real options theory. After considering the demand as a factor of uncertainty, a model has been developed obtaining the optimal value in the reduction of the workforce, therefore allowing the organization to place itself in the best position for decision making and prevent further loss of human capital. Real options, an innovative management tool that has been proven as correct, helps to improve the assessment of the collective dismissal procedures using the dynamic demand instead of the static demand, giving a better quantification of the decision to be taken.

Real options in the assessment of collective dismissal procedure, focused on the collective dismissal procedures of spain Articles