Organizational Culture

Topics: Organizational studies, Organizational culture, Change management Pages: 20 (6675 words) Published: November 25, 2000
Downsizing And Organizational Culture
Thomas A. Hickok


In this article Hickok argues 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. In particular, the author notes three observations in relation to the impact of downsizing on organizational culture. First, it clearly appears that power has shifted away from rank-and-file employees in the direction of top management/ownership. Accompanying this change is a shift in emphasis away from the well-being of individuals in the direction of the pre-eminence and predominance of the organization as a whole. Second, it appears working relationships have changed away from being "familial" in the direction of being more competitive. Third, the employer-employee relationship has moved away from long-term and stable in the direction of short-term and contingent.

The author suggests five simple question areas that organizational leaders who are interested in probing the moral and spiritual dimensions of downsizing might usefully consider. These include ensuring the fundamental decency of the approach being considered, engaging in appropriate dialogue, thinking through the consequences for those who may be adversely affected, having ready explanations for multiple constituencies, and offering a realistic opportunity for a better future for the organization and the organization's stakeholders.


Downsizing And Organizational Culture
A noted scholar recently assessed downsizing as "probably the most pervasive yet understudied phenomenon in the business world" (Cameron, 1994). 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 (New York Times, 1996). 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 (Hamel and Prahalad, 1994).

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 (Fierman, 1994); 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...

References: American Management Association (1994). 1994 survey on downsizing.
Armstrong-Stassen, M
Argyris, C. (1992). Knowledge for action: A guide to overcoming barriers to organizational change. San Francisco: Jossey-Bass.
Bennis, W
Bridges, W. (1987). Managing transitions. Reading, MA: Addison-Wesley.
Bridges, W
_________ (1994). Job shift: How to prosper in a world without jobs. Reading, MA: Addison-Wesley.
Brockner, J
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.
Cascio, W
Downs, A. (1995). Corporate executions. NY: AMACOM (225 pages).
Fierman, J
Greengard, S. (November 1993). "Don 't rush downsizing: Plan, plan, plan," Personnel Journal 72(11), 64-76.
Hamel, G., and Prahalad, C.K
Handy, C. (December 5 1990). "What is a company for?" Michael Shanks Memorial Lecture reprint (13 pages).
Hecksher, C
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.
Kearns, D
Kotter, J. And Heskett, J. (1992). Corporate culture and performance. New York: The Free Press.
Kozlowski, S., Chao, G., Smith, E., and Hedlund, V
Leana, C. and Feldman, D.C. (1992). Coping with job loss: How individuals, organizations, and communities respond to layoffs. New York: Lexington Books.
Lewin, K
McGregor, D. (1960). The human side of enterprise. New York: McGraw-Hill.
Mohrman, S.A., and Mohrman, A.M., Jr
New York Times (1996). The downsizing of America. New York: Times Books.
Noer, D
Pfeffer, J. (1981). Power in organizations. Marshfield, Mass: Pitman Publishing.
Petruno, T
Rousseau, D. (1995). Psychological contracts in organizations: Understanding written and unwritten agreements. Thousand Oaks, CA: Sage.
Schein, E
Schumpeter, J. (1950). Capitalism, socialism, and democracy. New York: Harper and Row.
Sloan, Allan (February 26 1996)
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.
Tichy, N
Tomasko, R.M. (1990). Downsizing: Reshaping the corporation for the future. New York: AMACOM.
Washington Post (March 5 1996)
Washington Post (May 5 1997). DIGEST, p. c1.
Waterman, R., Waterman, J., and Collard, B
The Wyatt Company (1993). Best practices in corporate restructuring: Wyatt 's 1993 survey of corporate restructuring.
Vroom, V
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Organizational Change
  • Corporate Brand Management: Aligning Core Values, Strategic Vision, Corporate Culture and Image Research Paper
  • Organizational Environments and Cultures Essay
  • Evaluating GE's Organizational Culture Essay
  • Organizational Culture at Virgin Essay
  • Southwest Airlines Organizational Culture Essay
  • Essay about A Case Study: Organizational Culture of Ultimate Shield Security
  • Organizational Behavior Essay

Become a StudyMode Member

Sign Up - It's Free