...Positive impact of Downsizing Perhaps the greatest advantage of downsizing is to make your business "leaner and meaner," able to effectively compete in your marketplace by cutting costs and increasing profits. You can do this in a way that will be more advantageous to your employees and, ultimately, to your business. To accomplish this, you must plan for the layoff before executing it and then follow the plan during and after the downsizing process, according to findings from a review of literature on staff reductions reported in the May/June 2003 issue of the "Journal of Healthcare Management" Increases Morale Once you downsize to save your business, the employees you keep might experience low morale and might not want to stay with you if they are now overworked. When you downsize, protect the employees that you keep to help ensure your success. For instance, make sure that you discharge low-performing employees and let the employees who you retain know that they were not part of the downsizing because of the quality of their work. This helps to increase employee morale, according to a 2000 study reported in the "Journal of Healthcare Management." Builds Teamwork Make sure you are not overworking your remaining employees and are able to retain them by opening communication channels between management and staff and by being willing to work with staff to solve problems. Including your employees in rebuilding your business helps build loyalty and empowers your staff. Once you have...
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...TITLE OF THESIS: THE IMPACT OF CORPORATE AMERICA DOWNSIZING FOR BANKS ON CORPORATE ETHICAL STRATEGY THESIS STATEMENT The thesis statement of this research paper is “The impact of corporate America downsizing for banks on corporate ethical strategy”. The paper shall cover issues such as the causes of downsizing, how to go about the downsizing process, impacts of downsizing and measures that can be put in place to curb such adverse impacts to the downsized and those employees left behind at large and ethical issues that relate to downsizing. INTRODUCTION Downsizing is the process whereby companies reduce the number of employees for a short while or for an unknown period of time. Companies downsize due to radical changes in the external and internal environment of the organization such as restructuring of the organization, poor performance of businesses and business processes reengineering .Globalization and collapsing of trade barriers within nations and the cropping up of technology and computerization has compelled companies to downsize. Several steps are necessary for successful downsizing: education, fortifying of the organizations goals and values, trustworthiness and pride every time, designing, and communication. Other vital points to note when conducting downsizing, including putting in place a clear vision and goals, achieving the transition successfully, planning, joint effort, concern and skills. Downsizing has shown to cause family breakup, lowering of self-esteem...
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...TABLE OF CONTENTS INTRODUCTION 2 ORGANIZATIONAL DOWNSIZING – A LITERATURE OVERVIEW 2 WHY DO COMPANIES DOWNSIZING? 2 STAGES OF DOWNSIZING 3 THE IMPACT OF DOWNSIZING PRACTICES ON THE PERFORMANCE 4 ALTERNATIVES TO LAYOFF 5 EARLY RETIREMENT 5 DOWNSIZING AND THE LEGAL ISSUES 6 REFERENCES: 6 INTRODUCTION Over the past decade, corporations have been under economic pressures for a long term. Consequently, some of them were eliminated from the local market, the survivors have been driven to reorganize, redesign and restructure their organization with the intention of maintaining their place in the market. According to the decision maker, downsizing can be a solution to many organizations to reduce their budgeting issues and to increase their productivities. ( Labib & Appelbaum,1994) This essay will focus on organizational downsizing. Part one present the downsizing concept, particular attention is paid to downsizing reasoning and stages, its impact on the performance and the legal issues. Part two focus on the early retirement. ORGANIZATIONAL DOWNSIZING – A LITERATURE OVERVIEW The term downsizing refers to an "elaborate decision to reduce the size of the workforce in an organization" to improve the organization performance and decrease cost. (Kozlowski et al., 1993, p. 267). Layoff and early retirement are methods of downsizing; in fact layoff is an immediate act of discharging an employee due a decline, while the early retirement is a personal decision...
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...Asia Pacific Management Review (2003) 8(1), 27-42 The Practice of Corporate Downsizing during Economic Downturn among Selected Companies in Malaysia Junaidah Hashim* and Anizah Abu Bakar** （received September 2002;revision received November 2002 ;accepted January 2003） This paper examines the organizational strategies and the effects of corporate downsizing in Malaysia. It reports the results of a survey of 30 Malaysian companies that engaged in downsizing during the economic downturn. Three research questions are probed: 1) What are the general strategies used by companies to downsize, 2) What are the difficulties faced by companies during downsizing implementation, and 3) What are the impacts of downsizing on organizations. The findings show two main strategies are used for downsizing: work reduction and work redesign. The most serious impact of downsizing is organizational ineffectiveness. Keywords: Corporate Downsizing; Malaysia; Economic Downturn 1. Introduction The Asian economy downturn occurred recently is probably deeper and broader than many previous economic downturns. As a result, big organizations began actively trimming corporate staff, slashing management layers in addition to widespread cutbacks and lowering cost to give value to the customers. The assumption underlying organizational performance and effectiveness in the last decades were bigger organizations are better organizations, unending growth is a natural and desirable work process, organizational adaptability...
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...to these changes. This paper focuses on the effects of Downsizing (effective way of restructuring the organization) and employee empowerment on the production and operation functions in the manufacturing industry. Employee empowerment has a positive impact on Production functions under specific conditions and with more of trust and social relationship between the management and employees. Empowerment is a boon to the manufacturing industry, as the in-depth knowledge of technical employees in operations is well utilized by the management. The Operation functions brings together raw materials with the production process to make products that customers need, here employees form the core, around which these processes revolve. Downsizing creates opportunities to identify, train and develop capable employees to fulfill more responsible roles in production and operation departments. Downsizing, from a company perspective, is a very positive event targeted to make their products better, increase their profit, and streamline operations. In organizations that have restructured, many do not handle the process of downsizing well and can suffer serious long term damage as a result. Skilled employees need to be recognized and retained for dependency on these employees in critical situations. Decision making is a central role of operation managers largely, thus managing continuity of operations is a prime consideration while downsizing or involving employees. On a long run, the cost of training...
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...Impact on Employee Morale during Company Restructuring The worldwide economic crisis has caused too many companies to restructure their corporate setting in order to survive and meet their financial challenges. If you turn on the TV or browse internet these days, it is almost impossible to avoid the bad news of more and more massive layoffs in United States as well as the rest of the world. As this financial crisis deepens, one can’t help asking “Is downsizing or more job cuts our only way out? What is the long term effect of these massive job cuts to our corporation employees? Will we need even longer time to recover from this emotional and morale crisis if the downsizing wasn’t done right?” In this paper, impacts of corporate restructuring on employees’ morale have been explored by reviewing several research papers. Figures were illustrated, strategies were suggested. It is not the question why companies have to downsize or cut jobs, it is how they should do it strategically right to reach the expected goal of benefit and continue to retain the trust and loyalty of the surviving workers. “Trust is one of the most valuable yet brittle assets in any enterprise. So over the long term, it’s far better for companies to downsize in a humane way.” - Robert Reich (Mishra and Spreizer, 1998) During the economic recession, many companies started to restructure their legal, ownership or operation structure in order to be more profitable, competitive and...
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...Employment Downsizing and Society Student name Student University Abstract The purpose of this research paper is to present the implications of the downsizing to the former employees and the social environment around this individual. The author presents the theoretical implementations of the downsizing and provides the implications to the laid of employee, his/ her family, and the employee who kept his/ her work. Later, the author discusses about ethical questions related to the downsizing. Keywords: downsizing, social impact, business ethics Studying Business Ethics and examining real life situation an individual starts to see the world from a different angle. The one starts to see the other side of a dilemma and begins to realize that sometimes decision made might affect both his/ her life and the environment around them. Most of the times, the decision is like a scale of wrong and right. Therefore, understanding the consequences – both negative and positive – is an essential part of decision making process where personal benefit or strong relationship might contradict individual’s worldview or belief. In my paper, I will discuss the problem of making decision of the top managers to pursue economic benefits when restructuring the organizations and potential ramifications, such as impact of employment downsizing on employees, communities, and families of the employees. To start with, employment “downsizing refers to a company's decision...
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...In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people. Rightsizing is downsizing in the belief that an enterprise really should operate with fewer people. Dumbsizing is downsizing that, in retrospect, failed to achieve the desired effect. conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness. Downsizing can be effective if implemented appropriately. Companies must be careful to avoid sending the wrong messages to employees, shareholders and the media. Successful downsizing requires managers to: Evaluate the overall impact of downsizing. The total cost of downsizing—including both financial and non-financial costs—must be taken into account. Managers must calculate the present value of all costs and benefits associated with the cuts, including severance packages, lower employee productivity due to disorder or talent loss, eventual rehiring expenses, future rightsizing costs and the lost opportunity costs associated with not having the appropriate...
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...Hypothesis Identification Article The article of choice is around a communication research study that was conducted regarding the downsizing that has taken place through-out different organizations. The study shows how the downsizing of the employees, that have direct customer interaction, has a negative impact on the customers as a whole. It is thought by the managers within the businesses, that this can be improved by having open communication with the customers. The first study is a manager study. The study is an executive survey that is based on the downsizing of more than 100 different projects. The study is conducted in order to try and get a better understanding of the failures of downsizing. Many feel that when down-sizing takes place, the customer gets an instant negative thought and starts to question the business and product/service as a whole and as blame on having to downsize. The hypothesis is that the communication or lack thereof between the manager and customer could have prevented a further negative impact on sales during the downsizing. The manager study was based on industries that had drastically reduced their workforce in sales and sales related areas within the last 5 years. Due to the availability of this type of data, a multi-step sampling approach was taken. During the database searched over 2500 different firms were identified as reducing their staff by at least 5%, over the last 5 years. Next step was to identify the ones that were directly...
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...Miree A. Case Synopsis During his tenure at the Information Technology department, Shanu paints the picture of a positive work environment where the employees are satisfied and happy with their jobs. After three years of working with the company, Shanu witnessed two junior members get laid off without a formal warning or explanation. The abrupt dismissal of these employees caused a shift in the culture of the work environment and generated issues that would impact the employees of the IT Department. After the abrupt dismissal the remaining employees began to exhibit unprofessional behaviors such as socializing, taking longer breaks, tardiness, and missing departmental meetings. They began to physically and psychologically withdraw from the company becoming disengaged with the department revealing their true issue, stress and job satisfaction. B. Framework for case analysis: Workplace stress is common in today’s uncertain jobs market; however, an abundance of stress can interfere with employee’s productivity and impact their physical and emotional health (Segal, Smith, & Robinson, 2013). Studies show that employees who have high stress levels tend to underperform and cannot work to their full potential, which in turn cause companies to lose profits. Employees who underperform during their job tend to have low job satisfaction. Studies have shown that workplace stress can be directly linked to job satisfaction; although, most researchers find that workplace stress is viewed...
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...layoffs will be felt on at the companies especially General Motors who is still partially owned by the U.S. Government. Recovery is a long road for some companies that are unable to pickup and improve especially when the company cannot relinquish those ties. Responsible downsizing can benefit company in making needed changes to keep up with the economy and upturns and downturns that come with it. Restructuring must be thought out properly, “A downsizing plan should be included in the strategic management plan of all organizations, regardless of whether they plan to downsize or not. By including such a plan, the organization will be better prepared to begin the staff-reduction process should it be forced to do so in response to environmental changes” (Davis, 2003). The short-term affects involves some initial costs like severances packages, early retirement, outplacement services, and other direct and indirect costs. Secondly downsizing should be looked at as an effective tool in strategic planning in the changes to support currently operations and not just for financial reasons. Eric Greenberg, editor of AMA Research Reports, who now believes that the best indicator of future organizational downsizing efforts will...
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...Table of Contents Question 1 2 Introduction 2 Reactions to frustration 2 Analysis of organisational behaviour 3 Question 2 4 Question 3 5 Introduction 5 What is survivor syndrome? 5 Question 1 Give an overview of the frustration model and how it can be used to analyse organisational behaviour Introduction Frustration occurs when a motivated drive is blocked before a person reaches a desired goal. The barrier may either be overt (outward, or physical) or covert (inward, or mental-socio-psychological). Overt acts might include strikes, work slowdowns, grievances, or lawsuits. Covert acts would include sabotage, secret withholding of output and stealing of organisational property. A smooth progression of the need-driven incentive motivational cycle and fulfilment of one’s expectations do not always occur in reality. There are some difficulties and barriers that do not let a person achieve his goals and so they lead to frustration. The frustration model can be useful in the analysis of not only behaviour in general but also specific aspects of on-the-job behaviour as illustrated by. 12e in the model below F. Luthans (2011), Oganisational Behavior: Need Drive Goal/ (deficiency) (deficiency with direction incentives reduction of with direction) Barrier the drives and fulfilment (1) Overt deficiencies) (2) Covert Frustration Defence mechanisms (1) Aggression (2) Withdrawal (3) Fixation (4) Compromise...
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...Organizational Downsizing Techniques and Handling Layoffs Team 1 Christina Berardi Bridget Quinn-Carey Tung-Yueh, Lee Over the last two decades, organizational downsizing has been a key management strategy favored by many organizations attempting to cope with fundamental and structural changes in the shifting economy. In the mid-1980’s, downsizing was implemented primarily by companies experiencing difficult economic times (Gandolfi, 2006). Companies hoped to cut costs and improve performance. By the late-1980’s, it developed into a proactive restructuring strategy for a multitude of organizations. Furthermore, since then, organizational downsizing has now transformed the corporate landscape and changed the lives of hundreds of millions of individuals around the world (Gandolfi, 2006). There are several definitions that have been developed to effectively define the phenomenon of organizational downsizing. To sum it up in one sentence, organizational downsizing refers to a set of activities, taken on by the core management of an organization, designed to improve organizational efficiency, productivity, and competitiveness. It represents a management strategy that affects three components: (a) the size of the firm’s workforce, (b) the costs, and (c) the work processes. On the surface, downsizing can be interpreted as merely a reduction in organizational size, and the process is a chaotic and uncertain experience...
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...Abstract Being able to remain or become globally competitive while facing challenges within today's economy is a challenge for all types of companies and organizations. When faced with struggling budgets outsourcing and or downsizing are often seen as the only possible solutions for businesses to stay afloat. Trying to maintain competitiveness while downsizing and or outsourcing brings about additional challenges for human resource management organizations. Containing Human Resource Costs During Economic Challenges The current economy brings challenges to every level of a corporation, including human resource management. Maintaining an effective budget is not always easy and becomes even more difficult with the strains of an economic crisis. While the elimination of unnecessary materials and or processes may help in curtailing costs and spending, it is not always an easy task; and an even more difficult task involves the elimination of actual jobs. As companies are faced with having to cut costs, eliminating jobs is sometimes an unfortunate solution. Human resources management is defined as the process of managing human talent to achieve an organization's objectives (Bohlander & Snell, 2010). Being able to effectively execute the process of human resources management relies on several factors. Being able to compete, recruit and staff globally; embrace new technology; manage change; manage talent; respond to the market and contain costs are imperative to...
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...to the “hard questions” that must be solved… Summarizing the Issue The issue and the matter at hand is how to deal with downsizing from an organizations perception. A company or a business must deal with the difficult task of having to let go of certain employees but the question is, how? How do they implement a strategy about letting someone go when they have to be confronted with different reactions and different personalities? Being that all situations are different, there must be a variety of strategies that can be used in the downsizing process. What is the Problem? The underlying problem is not downsizing because after all a business will do whatever they feel is best for themselves. The underlying problem is what happens after the downsizing occurs. Our group acknowledged that downsizing can have a negative effect on employees and their morale. It can also have an effect on the employees depending on the organization’s methods of handling the situation. It is apparent that an employee’s attitude and views about the organization they work for may take a toll on how they perform at work. An employee’s performance may result in being less productive, and less productivity can be very costly to a business. Reflection as a Group. It is crucial for a business to consider all other alternatives and methods on how to go about handling the downsizing...
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