Topics: Saudi Arabia, Costs, Management Pages: 2 (751 words) Published: February 8, 2013
What is the purpose? To cut down the cost or cut down the control? I think this is the major difference between downsizing and delayering, It's the AIM of each. Downsizing and delayering both are means to restructure an organization. According to Child(2005) there is reactive downsizing usually occur due to market economic downturn or the other type which is resizing to meet a strategic goal, But I would vote for John W. Myrna(2009) when he classified it into the wrong way to downsize and the right way. To summarize Myrna's classification: *The wrong way to downsize: Cut the cost now and sink the company in the future. 1-Cutting a fixed amount from every function. 2-Cutting from future investments as research,marketing along with its staff. 3-Cutting from supporting staff and customer support. All those paths won't meet the purpose of the downsizing which is cut down the cost as it'll reduce productivity at best and totally cripples function at worst and for sure it cut down from employees' loyalty, motivation and self-esteem and increase stress as stated by Cummins and Worley(2005). Another proof of why downsizing is an organizational killer and not cost effective is the survey conducted by The National Research Council of 1005 companies that used downsizing to reduce costs reported that below half of those firms reached the cost targets. * The right way to downsize: stabilize the situation now and know how to move the company forward. 1-Put a new strategic plan or revise the old: identify the goal and where is the company's destination to paddle forward( move your lifeboat towards safe shore) 2-Identify the needs to reach that destination: To fit every facilities, offices and initiatives to the plan and eliminate legacy products and services( Throw away from your lifeboat whatever will sink you down). 3-Better communication: tell the employees which way to paddle, on what speed and what is the role of each of them to reach your destination safe. With this path the...
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