The problem with hiring and firing is that the process is not an exact science. (Can't say it's an exact art either.) The military also has this problem. The question is always, "how much help do we need on the front lines?" (Of business or war, same problem.) So many executives, not being the sharpest tacks in the drawer, but perhaps being luckier than some, ramp up the work force. But then they find that productivity didn't respond as they hoped it would. This stems from their lack of understanding of the fine points of their business. Perhaps they don't know how the work flows at the lowest level. Perhaps they didn't understand the product line. Perhaps they underestimated the complexity of whatever they were attempting.
With the military, the goal is easier. You put a lot of soldiers up front and try to overwhelm the enemy like a massive tsunami crashing on the shore. That is exactly what happened in WW II, though another part was the conversion of businesses to making war materiel. My dad was a shipbuilder - a maritime draftsman - with the Higgins company at the time. He worked to produce the Liberty Ships - small tonnage freighters that addressed the U-boat problem. The USA made more ships than the U-boats could sink without getting caught. The mobilization took away from consumer spending but it worked as intended. The military "tsunami" approach worked perfectly with very few exceptions. The D-Day Museum in New Orleans has a section on "The Arsenal of Freedom" to highlight this initiative.
But with a sales force or an assembly-line force, you might end up with a problem of too many employees getting in each other's way. For example, there is the "too many cooks" syndrome, where you need a structured and regimented kitchen staff with a head chef who oversees the rest of the staff and hands out assignments as needed to keep the food flowing. Assembly-line workers are another group that can run into a flow problem, because if you have too many people doing too many things at a single station, you slow down the assembly line for that bottle-necked station. Henry Ford figured out some important points on how to optimize that work flow.
So what do you do when your work-force ramp-up didn't work out? You reduce the size of your work force because you can't afford to keep them on the payroll. It might be that the problem you were facing with a sales force wasn't that you lacked sales staff but that nobody wanted what you chose to sell. I.e. you put your money in the wrong place. Sears had this problem in their clothing lines, at least to some degree, before they went into a tailspin. In essence, the REAL problem with Sears is they fell out of touch with their customer base. They failed to fully modernize their product lines. (There WERE other reasons as well.)
The advent of the internet and on-line buying was the death-knell for many brick-and-mortar stores that didn't also have catalog sales, but even having alternate sales methods only delayed the inevitable for some companies. When you have vigorous on-line sales and lackluster brick-and-mortar sales, having a big sales force "on the floor" is the wrong answer. You need a customer response force on-line. So that is "misplaced attention" or "putting your money where your mouth isn't."
The problem CAN be as simple as poor or outright inept management. My first real job in the work-day world came to an end because of the lack of management acumen. We made various computer-related small and medium industrial control products. The company president was forced to hire a new VP of Marketing because the previous guy left to start his own business. (And I hold no animosity for a guy seeking his own opportunity!) The new VP of Marketing came in all "hot to trot" and immediately put together sales estimates that, as far as I could tell, were based on wet dreams and vaporware. That was 1982.
So the company president, relying on the new guy's projections, ramped up the company - and (figuratively speaking) the roof caved in when the sales didn't materialize. In 1984 we were going to miss a debt payment in August, but the company got bought out in July. The new owners were on a spending spree because they wanted to modernize their old hydraulic/pneumatic/solenoid control systems by adding a layer of computer controls, and our company could have helped them. But they required the employees to move to Baltimore. Some did. I couldn't due to my mother's fragile condition. (I've told that story elsewhere and won't repeat it here.) But by 1986, I had to change jobs. The final irony was that the new owners had ALSO misunderstood their own project and by 1987, THEY got bought out. Their "friendly takeovers" were made easier because they bought too many new small (and debt-riddled) companies. The 1980s was a tumultuous time in the oil-and-gas industry (where our company had started), so many small-to-medium businesses were in trouble, making them easy buy-out targets. The problem arose when the new company's managers totally failed to understand how long it would take for their modernization project to bring new products to their traditional customers based on small companies that had already failed once at growing the business.
The hiring and firing cycle might best be understood as "imperfect vision" or "slow responsiveness" of the managers with respect to rapidly changing business conditions. I will recommend the following book as a way to understand the mistakes commonly made by managers. The Mythical Man-Month (Frederick P Brooks Jr, Addison-Wesley Publishing, 1979) describes the myopic viewpoints and their consequences. One of the common examples of a myopic viewpoint is that a clueless manager would see that it takes a woman 9 months to make a baby, so he would throw 9 women at the project in hopes of shortening the process. And of course, that doesn't work because of the nature of the project.
