Journal of Management Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Learning from the Past Downsizing Lessons for Managers


Affiliations
1 School of Global Leadership & Enterpreneurship Regent University Virginia Beach, VA 23464-9800, United States
     

   Subscribe/Renew Journal


Downsizing as a change management strategy has been adopted by companies and governmental agencies since the 1970s. While workforce reductions were utilized mainly in response to organizational and economic crises prior to the mid-1980s, downsizing developed into a proactive restructuring strategy of choice for a multitude of organizations in the mid- to late-1980s. Since then, downsizing has transformed the corporate landscape and changed the lives of hundreds of millions of individuals around the world. While downsizing has attracted a lot of attention in academic circles, the business community, and the popular media, many misconceptions and mysteries surrounding the phenomenon have remained. This research study presents an overview of the reported financial, organizational, and human consequences following the conduct of downsizing. More importantly, the paper draws out implications for practicing managers and showcases four downsizing lessons that need to be considered by executives contemplating the adoption of downsizing.

Keywords

Downsizing, Strategy, Consequences and Lessons
User
Notifications

  • Allen, R. K. (1997), Lean and Mean: Workforce 2000 in America, Journal of Workplace Learning, 9(1). http://www.emeraldlibrary.com/brev/08609ae1.html

  • Amundson, N., Borgen, W., Jordan, S. and Erlebach, A. (2004), Survivors of Downsizing: Helpful and Hindering Experiences, The Career Development Quarterly, 52: 256-271.

  • Appelbaum, S. H., Delage, C., Labibb, N. and Gault, G. (1997), The Survivor Syndrome: Aftermath of Downsizing, Career Development International, 2(6). http://www.emerald-library.com/brev/13702fd1.html

  • Appelbaum, S. H., Everard, A. and Hung, L. (1999), Strategic Downsizing: Critical Success Factors, Management Decision, 37(7): 535-559.

  • Beylerian, M. and Kleiner, B. H. (2003), The Downsized Workplace, Management Research News, 26: 97-108.

  • Brockner, J. (1988), The Effects of Work Layoffs in Survivors: Research, Theory and Practice, Research in Organizational Behavior, 10: 213-255.

  • Cameron, K. S. (1994), Strategies for Successful Organizational Downsizing, Human Resource Management, 33(2): 189-211.

  • Cameron, K. S., Freeman, S. J. and Mishra, A. K. (1993), Downsizing and Redesigning Organizations, in G. Huber and W. Glick (eds), Organizational Change and Redesign, pp. 19-63, Oxford University Press, New York.

  • Cascio, W. F. (1993), Downsizing: What Do We Know? What have we learned? Academy of Management Executive, 7(1): 95-104.

  • Cascio, W. F., Young, C. and Morris, J. (1997), Financial Consequences of Employment Change Decisions in Major US Corporations, Academy of Management Journal, 40(5): 1175-1189.

  • Cascio, W. F. (1998), Applied Psychology in Human Resource Management, 5th edition, Prentice Hall, Upper Saddle River, NJ.

  • Cascio, W. F. (2003), Responsible Restructuring: Seeing Employees as Assets, Not Costs, Ivey Business Journal Online, November 2003.

  • Chadwick, C., Hunter, L. and Walston, S. (2004), Effects of Downsizing Practices on the Performance of Hospitals, Strategic Management Journal, 25(5): 405-420.

  • Clair, J. A. and Dufresne, R. L. (2004), Playing the Grim Reaper: How Employees Experience Carrying Out a Downsizing, Human Relations, 57(12): 1597-1625.

  • Clark, J. and Koonce, R. (1995), Engaging Organizational Survivors, Training & Development, 49(8): 22-30.

  • Crainer, S. and Obleng, E. (1995), Re-engineering: Overview, in Stuart Crainger (ed), The Financial Times Handbook of Management, pp. 231-241, FT Pitman Publishing.

  • De Meuse, K. P., Vanderheiden, P. A. and Bergmann, T. J. (1994), Announced Layoffs: Their Effect on Corporate Financial Performance, Human Resource Management, 33(4): 509-530.

  • De Meuse, K. P., Bergmann, T. J., Vanderheiden, P. A. and Roraff, C. E. (2004), New Evidence Regarding Organizational Downsizing and a Firms Financial Performance: A Long-term Analysis, Journal of Managerial Issues, 16: 155-177.

  • Devine, K., Reay, T., Stainton, L. and Collins-Nakai, R. (2003), The Stress of Downsizing: Comparing Survivors and Victims, Human Resource Management, 42: 109-124.

  • Dolan, S., Belout, A. and Balkin, D. B. (2000), Downsizing Without Downgrading: Learning How Firms Manage their Survivors, International Journal of Manpower, 21(1): 34-46.

  • Doherty, N. and Horsted, J. (1995), Helping Survivors to Stay on Board, People Management, Personnel Publications Limited, January 12, London.

  • Downs, A. (1995), Corporate Executions, Amacom, New York, NY.

  • Drew, S. A. W. (1994), Downsizing to Improve Strategic Position, MCB Management Decision, 32: 1.

  • Estok, D. (1996), The High Cost of Dumbsizing, Macleanss, 109(23): 28-29.

  • Farrell, M. and Mavondo, F. (2004), The Effect of Downsizing Strategy and Reorientation Strategy on a Learning Orientation, Personnel Review, 33(4): 383-402.

  • Filipowski, D. (1993), Dont Rush Downsizing: Plan, Plan, Plan, Personnel Journal, 72(11): 64-76.

  • Gandolfi, F. and Neck, P. (2003), Organizational Downsizing: A Review of the Background, its Development, and Current Status, The Australasian Journal of Business and Social Inquiry, 1: 1.

  • Gandolfi, F. (2001), How and Why should Training and Development be Implemented During the Process of Organizational Downsizing? Unpublished thesis for the award of Doctor of Business Administration (DBA), Southern Cross University, Australia.

  • Gandolfi, F. (2005), How Do Organizations Implement Downsizing? An Australian and New Zealand Study, Contemporary Management Research, 1(1): 57-68.

  • Gandolfi, F. (2006), Corporate Downsizing Demystified: A Scholarly Analysis of a Business Phenomenon, The ICFAI University Press, Hyderabad, India.

  • Gandolfi, F. (2006b), Personal Development and Growth in a Downsized Banking Organization: Summary of Methodology and Findings, Journal of Human Resource Development International (HRDI), 9(2): 207-226.

  • Gandolfi, F. (2007), How do Large Australian and Swiss Banks Implement Downsizing?, Journal of Management & Organization, 13(2): 145-159.

  • Gettler, L. (1998), Survey: Downsizing Doesnt Cut Costs, Sydney Morning Herald, 16.06.1998, p. 27.

  • Greenglass, E. R. and Burke, R. J. (2001), Downsizing and Restructuring, Implications for Stress and Anxiety, Anxiety, Stress, and Coping, 14: 1-13.

  • Griggs, H. E. and Hyland, P. (2003), Strategic Downsizing and Learning Organizations, Journal of European Industrial Training, 24(2-4): 177-187.

  • Kinnie, N., Hutchinson, S. and Purcell, J. (1998), Downsizing: Is It Always Lean and Mean? Personnel Review, 27(4): 296-311.

  • Kirby, J. (1999), Downsizing Gets the Push, Business Review Weekly, March 22, 1999.

  • Konovsky, M. A. and Brockner, J. (1993), Managing Victim and Survivor Layoff Reactions: A Procedural Justice Perspective, in R. Cropanzano (ed.), Justice in the Workplace: Approaching Fairness in Human Resource Management (133-153), Lawrence Erlbaum,

  • New Jersey.

  • Lecky, S. (1998), The Failure of Slash & Earn, Sydney Morning Herald, 4.7.1998, pp. 83-87.

  • Lee, C. (1992), After the Cuts, Training, July 1992, pp. 17-23

  • Littler, C. R. (1998), Downsizing Organisations: The Dilemmas of Change, Human Resources Management Bulletin, CCH Australia Limited, Sydney.

  • Littler, C. R., Dunford, R., Bramble, T. and Hede, A. (1997), The Dynamics of Downsizing in Australia and New Zealand, Asia Pacific Journal of Human Resources, 35(1): 65-79.

  • Luthans, B. C. and Sommer, S. M. (1999), The Impact of Downsizing on Workplace Attitudes, Group and Organization Management, 24(1): 46-70.

  • Macky, K. (2004), Organisational Downsizing and Redundancies: The New Zealand Workers Experience, New Zealand Journal of Employment Relations, 29(1): 63-87.

  • Makawatsakul, N. and Kleiner, B. H. (2003), The Effect of Downsizing on Morale and Attrition, Management Research News, 26: 2-4.

  • Maurer, H. (2005), Downsizing in Detroit, The Business Week, December 5.

  • Mirabal, N. and DeYoung, R. (2005), Downsizing as a Strategic Intervention, Journal of American Academy of Business, 6(1): 39-45.

  • Mishra, A. K. and Spreitzer, G. M. (1998), Explaining How Survivors Respond to Downsizing: The Role of Trust, Empowerment, Justice, and Work Redesign, Academy of Management Review, 23(3): 567-588

  • Mitchell, G. (1998), The Trainers Handbook: The AMA Guide to Effective Training, 3rd edition, AMACOM American Management Association, New York.

  • Morris, J. R., Cascio W. F. and Young, C. E. (1999), Downsizing After All These Years: Questions and Answers about Who Did It, How Many Did It, and Who Benefited from It. Organizational Dynamics, Winter 1999: 78-87.

  • Nelson, B. (1997), The Care of the Un-downsized, Training & Development, 51(4): 40-43.

  • Noer, D. (1993), Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations, Jossey-Bass, San Francisco, CA.

  • Ryan, L. and Macky K. A. (1998), Downsizing Organizations: Uses, Outcomes and Strategies, Asia Pacific Journal of Human Resources, 36(2): 29-45.

  • Sahdev, K. (2003), Survivors Reactions to Downsizing: The Importance of Contextual Factors, Human Resource Management Journal, 13(4): 56-74.

  • Schweiger, D. M., Ivancevich, J. M. and Power, F. R. (1987), Executive Actions for Managing Human Resources before and after Acquisition, Academy of Management Executive, 1(2): 127-138.

  • Smeltzer, L. R. and Zener, M. F. (1994), Minimizing the Negative Effect of Employee Layoffs through Effective Announcements, Employee Counseling Today, 6(4).

  • The Associated Press (2007), Heinz Earnings Fall on Costs of Downsizings, March 1, 2006. Williams, S. M. (2004), Downsizing Intellectual Capital Performance Anorexia or Enhancement? The Learning Organization, 11(4/5): 368-379.

  • Worrell, D. L., Davidson, W. N. and Sharma, V.M. (1991), Layoff Announcements and Stockholder Wealth, Academy of Management Journal, 34: 662-678.

  • Zeffane, R. and Mayo, G. (1994), Rightsizing: The Strategic Human Resources Management Challenge of the 1990s, Management Decision, 32(9).

  • Zemke, R. (1990), The Ups and Downs of Downsizing, Training, November 1990, pp. 27-34.

  • Zyglidopoulos, S. C. (2003), The Impact of Downsizing on the Corporate Reputation for Social Performance, Journal of Public Affairs, 4(1): 11-25.


Abstract Views: 644

PDF Views: 2




  • Learning from the Past Downsizing Lessons for Managers

Abstract Views: 644  |  PDF Views: 2

Authors

Franco Gandolfi
School of Global Leadership & Enterpreneurship Regent University Virginia Beach, VA 23464-9800, United States

Abstract


Downsizing as a change management strategy has been adopted by companies and governmental agencies since the 1970s. While workforce reductions were utilized mainly in response to organizational and economic crises prior to the mid-1980s, downsizing developed into a proactive restructuring strategy of choice for a multitude of organizations in the mid- to late-1980s. Since then, downsizing has transformed the corporate landscape and changed the lives of hundreds of millions of individuals around the world. While downsizing has attracted a lot of attention in academic circles, the business community, and the popular media, many misconceptions and mysteries surrounding the phenomenon have remained. This research study presents an overview of the reported financial, organizational, and human consequences following the conduct of downsizing. More importantly, the paper draws out implications for practicing managers and showcases four downsizing lessons that need to be considered by executives contemplating the adoption of downsizing.

Keywords


Downsizing, Strategy, Consequences and Lessons

References