Downsizing and Organizational Culture

Topics: Organizational studies, Organizational culture, Change management Pages: 17 (5629 words) Published: December 5, 2001
Downsizing and Organizational Culture
By Joe Gonzalez
Sociology 100
Dr. Mario Reda

Table of Contents
Chapter 1........................................................................................................................1 Chapter 2........................................................................................................................2

Organizational Culture Defined........................................................................2
Downsizing Defined............................................................................................3
Culture Change..................................................................................................4
Connecting the Literature..................................................................................7
Organizational Level Analysis...........................................................................7
Organizational/ Individual Level Analysis......................................................10
Downsizing's Impact on Culture.....................................................................12 Chapter 3......................................................................................................................13

Downsizing And Organizational Culture
Introduction
A noted scholar recently assessed downsizing as "probably the most pervasive yet understudied phenomenon in the business world" 1. While we have become numbed by the near daily accounts of new layoffs, a New York Times national survey finding is perhaps more telling: since 1980, a family member in one-third of all U.S. households has been laid off 2. By some measures, downsizing has failed abjectly as a tool to achieve the main raison d'etre, reduced costs. According to a Wyatt Company survey covering the period between 1985 and 1990, 89 percent of organizations which engaged in downsizing reported expense reduction as their primary goal, while only 42 percent actually reduced expenses. Downsizing for the sake of cost reduction alone has been castigated intellectually as short-sighted and neglectful of what resources will be needed to increase the revenue stream of the future 3.

A truer and fuller understanding of the forces shaping and thrusting downsizing forward today comes from an appreciation of increased global competition; changing technologies, which in turn are profoundly impacting the nature of work; increasing availability of a contingent work force 4; and shifting balance of power among organizational constituents away from rank and file employees and in the direction of shareholders and the chief executives who serve as their proxy. When we conceptualize downsizing within these broader frameworks, it becomes clear that we are speaking of downsizing both as a response to and as a catalyst of organizational culture change.

This article will later provide a formal definition of "organizational culture". For the moment, it is suggested that culture is to an organization what personality is to an individual. As with personality, change takes time and may be hard to discern, especially for persons inside the organization. This article will argue that, ultimately, the most prominent effects of downsizing will be in relation to culture change, not in relation to saved costs or short-term productivity gains. Key drivers of organizational culture will tend to shape an organization's approach to downsizing. For whose benefit does the organization exist? What are the basic assumptions among people who work in the organization? What are the basic assumptions the organization and the employee make in relation to each other?

Establishing a direct link between downsizing and organizational culture is not an easy matter, however, as the following example will demonstrate. The Chief Executive Officer of Apple Computer recently bought himself more time with disgruntled shareholders by promising to take forceful action on a number...

Cited: 1. American Management Association (1994). 1994 survey on downsizing.
2
3. Argyris, C. (1992). Knowledge for action: A guide to overcoming barriers to organizational change. San Francisco: Jossey-Bass.
4
5. Bridges, W. (1987). Managing transitions. Reading, MA: Addison-Wesley.
6
7. William Bridges and Associates (pamphlet, 14 pages). (1994). Job shift: How to prosper in a world without jobs. Reading, MA: Addison-Wesley.
8
9. Brockner, J., Konovsky, M, Cooper-Schneider, R., Folger, R., Martin, C., and Bies, R. (1994).
12. Cameron, K.S., Freeman, S.J., and Mishra, A.K. (1991). "Best practices in white- collar downsizing: Managing contradictions," Academy of Management Executive 5(3), pp. 57-72.
13
14. Downs, A. (1995). Corporate executions. NY: AMACOM (225 pages).
15
16. Greengard, S. (November 1993). "Don 't rush downsizing: Plan, plan, plan," Personnel Journal 72(11), 64-76.
17
18. Handy, C. (December 5 1990). "What is a company for?" Michael Shanks Memorial Lecture reprint (13 pages).
19
20. Hickok, T. (1995). The impact of work force reductions on those who remain: A study of civilian workers at two Department of Defense bases. Unpublished doctoral dissertation, University of Southern California, Los Angeles, CA.
21
22. Kotter, J. And Heskett, J. (1992). Corporate culture and performance. New York: The Free Press.
23
24. Leana, C. and Feldman, D.C. (1992). Coping with job loss: How individuals, organizations, and communities respond to layoffs. New York: Lexington Books.
25
26. McGregor, D. (1960). The human side of enterprise. New York: McGraw-Hill.
27
28. New York Times (1996). The downsizing of America. New York: Times Books.
29
30. Pfeffer, J. (1981). Power in organizations. Marshfield, Mass: Pitman Publishing.
31
32. Rousseau, D. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Thousand Oaks, CA: Sage.
33
34. Schumpeter, J. (1950). Capitalism, socialism, and democracy. New York: Harper and Row.
35
36. Sutton, R.I. and D 'Aunno, T. (1989). "Decreasing organizational size: Untangling the effects of money and people," Academy of Management Review 14(2), pp. 194- 212.
37
38. Tomasko, R.M. (1990). Downsizing: Reshaping the corporation for the future. New York: AMACOM.
39
40. Washington Post (May 5 1997). DIGEST, p. c1.
41
42. The Wyatt Company (1993). Best practices in corporate restructuring: Wyatt 's 1993 survey of corporate restructuring.
43
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on organizational culture
  • Organizational Culture Essay
  • Organizational Culture in Japanese Companies Essay
  • Organizational Culture Essay
  • Analyzing Organizational Culture Essay
  • Essay about culture
  • Organizational Culture Essay
  • Organizational culture Essay

Become a StudyMode Member

Sign Up - It's Free