Preview

Effects of Downsizing

Best Essays
Open Document
Open Document
4341 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Effects of Downsizing
Executive Summary
Work atmosphere is an important aspect when analyzing working conditions of a company. Positive business culture can correlate with effective and efficient productivity, thus leading to an organizations’ financial success. Unfortunately, there are times when management must lay off fellow employees due to economics and financial reasoning. These actions are faced with dire consequences. The following report includes expected reactions by employees who continue to work within an organization after a company downsizing. The report is further directed towards management efforts to repair the torn work atmosphere, as it includes cases that both convey ineffective downsizing practices and outline successful downsizing strategies.

The extent of the research was conducted through many secondary sources, with the main content heavily based on previous academic articles. Other secondary sources including textbooks, business tribunals and business articles may also be included in the content. The sources were retrieved using Simon Fraser University library journal databases, most notably Business Source Complete, Academic Search Premier, and Google Scholar.

The research focuses on short-term and long-term associations with workers’ emotions and productivity, while displaying appropriate management responses to their employees’ emotions. The research suggests that employees’ trust and confidence, in management, becomes tarnished after an organizational downsizing, which accordingly defects productivity. The research further suggests that if these emotional symptoms continue in the long-term, management will continue to face these problematic downsizing issues. The final part of the report will focuses how to overcome these difficulties from a managerial perspective.

Based on the research conducted, the recommendations of the report focus on mitigating detrimental effects of downsizing on employees’ emotions and productivity, by delivering managers



References: Appelbaum, S. H., Delage, C., Labib, N., & Gault, G. (1997). The survivor syndrome: Aftermath of downsizing. Career Development International, 2(6), 278-286. doi:10.1108/13620439710178639 Brockner, J., Grover, S., Reed, T., DeWitt, R., & O 'Malley, M Nair, S. K. (2008). Organizational Downsizing: A study of survivor attitudes. ICFAI Journal of Organizational Behavior, 7(1), 23-40. Retrieved from http://iupindia.academia.edu/ Niehoff, B., Moorman, R., Blakely, G., & Fuller, J Reinardy, S. (2010). Downsizing effects on personnel: The case of layoff survivors in U.S. newspapers. Journal of Media Business Studies, 7(4), 1-19. Retrieved from http://www.jombs.com/ Robinson, S Travaglione, A., & Cross, B. (2006). Diminishing the social network in organizations: Does there need to be such a phenomenon as ‘survivor syndrome’ after downsizing?. Strategic Change, 15(1), 1-13. doi:10.1002/jsc.743

You May Also Find These Documents Helpful

  • Satisfactory Essays

    The effect of mismanaged LAYOFFs on the remaining workforce and the effects, lack of management preparation, the human condition, and lack of mitigation strategies. We think that the problem with this article is that not enough managers or HR personal, know how to let a person go from their employment effectively. They sometimes don't realize the impact that it has on the other employees morals. Also, that sometimes companies don't take a closer look to make sure downsizing will be the answer to cutting costs like they think that it will. Every HR or manager should be let go in their lifetime so that they know what it feels like. I believe that this statement holds tremendous merit because the best lessons in life are learned through personal experience. In order to adequately communicate life changing messages of sorts, it should be done by a seasoned manager. I will be very surprised if any company has a potential layoff learning path that will coach and train the management staff for these kinds of things. It is imperative to be sensitive to the individual being laid off as this will impact their livelihood significantly. I do agree that other options much is explored such as relocating or wage cuts before making the decision to lay off people.…

    • 660 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    This paper was conducted as a Discussion Board Post assigned by Professor J. Reinke of: Liberty University, Graduate School of Business, Lynchburg, Virginia 24515.…

    • 1265 Words
    • 4 Pages
    Powerful Essays
  • Good Essays

    Weymouth Steel Corporation

    • 1341 Words
    • 6 Pages

    But once the management will speak out the downsizing news to its employees, the challenge to reduce the arising stress will be higher. Therefore I will recommend the following strategy with time lag to communicate the good and bad news to employees and to curb the rumors in the media. But firstly the new changed vision of the company should be:…

    • 1341 Words
    • 6 Pages
    Good Essays
  • Good Essays

    Throughout corporate America, downsizing is a common practice. The concept of downsizing as a strategic tool wasn 't introduced until the 1980 's, and today it is a well known system. This has been caused by the accelerated growth of international and global competition throughout the past two decades. Increasing competition is forcing companies to drive their costs as low as possible, and the quickest, easiest way to cut costs is to cut jobs. Top management within corporations is most worried about the impact downsizing will have on their costs, and they are usually less apprehensive about the influence on the employees affected. Two views on this topic are presented in Marc Street 's Taking Sides. The first will argue against downsizing for…

    • 1409 Words
    • 6 Pages
    Good Essays
  • Good Essays

    A low morale affects the production rate and the quality of what is being produced. The trust gained from customers can be lost with quality and other issues which directly affects them. The management should improve its visibility amongst the workforce, should encourage the workers to pool in their ideas of improvement and create a stable atmosphere in order to stay afloat. Employees are the most precious assets of an organization as employees make or destroy an organization. The plant manager instead of wasting time by doubting the credibility of the plan he implemented, should have immediately switched to damage control mode and tried to revive the plant by making changes which were discussed…

    • 989 Words
    • 4 Pages
    Good Essays
  • Good Essays

    All businesses at one time or another will have to deal with employee layoffs due to a re-organization or changes in the economy. Employee layoffs can have a damaging impact to the remaining employee and management staff. There are several solutions that can be done to alleviate the negative impact and the recommendation is to provide managers with the proper training on how to properly handle a layoff so there is a more positive impact on the remaining staff. Proper training prepares managers for delivering the message to both the employee being laid off and the remaining staff. This type of training has many advantages for the company and the employees.…

    • 759 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    The job of a middle manager is not easy, especially during times of extreme change. It requires balancing and maintaining varying personnel within the organization including upper management and a subordinate workforce. An option for many who successfully have not influenced the direction of an organization is to leave the company. However, according to Covey (2004), “A more common but insidious alternative is to remain and become a mindless conveyor of decisions from the top” (p. 47). The middle manager who manages to compete with the pressures from upper management with some degree of success faces alternate challenges from within the organization. According to Armour (2007), “Middle management jobs have become more demanding. Technology means middle managers have to do more multi-tasking and are expected to be accessible to their staffs, a Herculean challenge in the age of globalization. Employees may be spread across the globe, and a manager may have to get up at 3 A.M. to take a call from an employee in another country” (para. 4). The demanding and steady rate of change throughout the structure of an organization fosters the complications that already exist for the middle manager.…

    • 1660 Words
    • 7 Pages
    Powerful Essays
  • Better Essays

    Dismissal Meeting

    • 2365 Words
    • 8 Pages

    Propose three (3) ways that a manager can cope with any negative emotions that may accompany an employee layoff.…

    • 2365 Words
    • 8 Pages
    Better Essays
  • Powerful Essays

    Academic Advisor

    • 1566 Words
    • 7 Pages

    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)…

    • 1566 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    No employee issue has created as much media attention and more employee anguish than company downsizing. Popular press articles suggest that thriving corporations regularly reorganize their workplaces, leaving many people out of work even when their former employers face no imminent financial threat. Changing patterns are some of the reasons cited for job loss support this impression of the rising importance of streamlining operations. Differences in factors such as the state of the economy and the signal sent by job loss could make the process of downsizing and the effects of job loss differ between restructurings of healthy organizations and downsizing due to financial misfortune.…

    • 2307 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    cat strategy management

    • 2768 Words
    • 12 Pages

    To what extent was market maturity the cause of Caterpillar’s restructuring? Critically examine the extent the new strategy transformed market, productive and financial performance.…

    • 2768 Words
    • 12 Pages
    Powerful Essays
  • Better Essays

    During the financial crisis, many organizations are downsizing and laying off their employees. A major factor that contributes to the failure of most organizations to achieve their objectives after downsizing is that they do not adequately and effectively address the “people factor” related to surviving employees throughout the process. In other words, most companies focus on comforting the leavers instead of concerning the negative effects on the survivors. Survivor Syndrome is a mental condition that occurs when people perceives themselves to have done wrong by surviving a traumatic event when others did not. In the field of management, it refers to the negative psychological and physical impact that originations’ layoffs bring to the remaining workers (Cascio, 1993). In this report, we identified 5 major negative effects on survived employees and provide possible solutions to the managers.…

    • 2477 Words
    • 10 Pages
    Better Essays
  • Powerful Essays

    Anheuser-Busch Inbev

    • 2171 Words
    • 9 Pages

    Workforce reductions and compensation and benefits are two Human Resource factors that if managed properly, can create a successful business. Workforce reductions relate to the act of suspending or dismissing an employee due to lack of work or because of corporate reorganization. Compensation and benefits relate to direct and indirect benefits including salary, allowances, bonuses, commission, insurance, pension plans, and vacations that employees receive from their employer. (BusinessDictionary.com) Workforce reductions have become a necessary practice for many businesses as the economy and markets have changed. Many businesses have found that there is less of a necessity for particular jobs, and the demand for work in some departments has become limited. Additionally, compensation and benefits are necessary business factors that are used to attract, motivate, and retain…

    • 2171 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    The Upside of Anger?

    • 373 Words
    • 2 Pages

    Research shows that acts of co-workers (37 percent) and management (22 percent) cause more negative emotions for employees than do acts of customers (7 percent). What can Laura’s company do to change its emotional climate?…

    • 373 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Stress Level in Hong Kong

    • 487 Words
    • 2 Pages

    Organizational leadership fails to demonstrate trust to employees. The firm eliminated 22000 jobs from 2006 to 2008. It shows that the company routinely fire people who cannot comply with the managers’ command. Therefore, the employees have been fear of being fired by the company. Moreover, the company practices involuntary transfer. They create uncertainty over the employees’ job security. As a result, it created heavy psychological burden and pressure on the employees. With such, the employees are stress out.…

    • 487 Words
    • 2 Pages
    Satisfactory Essays

Related Topics