While downsizing is viewed as a method in which to achieve savings in the short-term, there are studies that have attempted to measure and evaluate the medium and long-term effects of downsizing. (Gandolfi & Littler, 2012). The objective 0(' this study is to determine how the perceptions of downsizing in relation to procedural and distributive justice affect the level of organizational commitment … Although recognized less often, downsizings also affect the society, in which an organization is situated, potentially changing the opinions of applicants, consumers, and regulatory bodies regarding the downsizing organization. Downsizing is sometimes seen primarily as a cost-reducing response to various crises and external factors over which management has little or no control. Corporate downsizing can occur for a number of reasons, like a slump in profits, plant closure, or business acquisition. WHAT IS DOWNSIZING? A reduction in personnel can have negative effects on your remaining workforce, leading them to feel concerned for their own job, and can hurt their morale, job satisfaction and overall performance. But new research indicates that … It is known that during the initial stages of downsizing, organizations incur extraordinary large direct costs, such as severance packages, early Rather, it’s a strategic business move to cut operational costs, maximize production, and … Knowing the effects of downsizing on organizational culture will help organizations to create and sustain a positive organizational culture which will influence positive social change. Others see downsizing as a strategic management initiative in its own right. Layoffs are often followed by other changes, such as branch closings or the consolidation of departments. Abstract: Corporate downsizing has become a strategy of choice by a multitude of organizations worldwide. Firms often downsize because it is seen as a way to reduce costs, adjust structures, and create leaner, more efficient workplaces. At the organizational level of analysis, downsizing issues are concerned mainly with whether to downsize, how to implement downsizing, and what the effects of downsizing on the organization’s performances are. Usually, these are permanent layoffs; however, sometimes the employees may be rehired after a restructuring period. Whether you’re downsizing, restructuring, or simply letting a single employee go, no employer looks forward to the aftermath of layoffs. Downsizing is a universal phenomenon the business world is experiencing. Concerning the third issue, numerous studies have been realized that investigated the downsizing effects. An organisation, being a structured entity which is established to achieve specific goals by blending resources, is very sensitive regarding costs and benefits to get optimal returns. ORGANIZATIONAL DEVELOPMENT 09-11 1 2. However, the way being exercised has a profound impact on survivors from layoff and on objective 0(' downsizing. And unlike common belief, it typically has nothing to do with employees’ performance. During a downsizing, the company will usually notify certain employees that they are being laid off. The major impact is on people, corporate organisations and the economy. Reducing the overall size Reduction in number of employees Pink Slip Management ORGANIZATIONAL DEVELOPMENT 09-11 2 3. Impact of downsizing 1. This chapter includes the background of the study, problem statement, purpose of
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