The Pros And Cons Of Downsizing

Question 1: What are the challenges faced by Right when the downsizing effort no longer is a popular human resource strategy?

Layoffs are not always the best solution for a decline in company profits. A business must resolve the conflict that exists between their responsibility to meet economic targets and the ethical responsibility of non-maleficence. Furthermore, it must be determined if the layoffs would even maximize stakeholder welfare from a utilitarian perspective (Arce & Xin Li, 2011).

* Downsizing: Reduction of the business portfolio by eliminating products and businesses units that aren’t profitable.

Downsizing refers to the voluntary actions on the part of organizations to reduce the overall size of their workforce, generally to reduce costs. The disadvantages of downsizing in a survey by the American Society of

Downsizing, this is brought up when there is law demand for the companies’ products at a set cost. Downsizing brings to light a loss of jobs, which increases the unemployment rate and in turn effects the economy as a whole for both the working and unemployed. (Hassin, 2010). On top of that, while the organization downsizes in employees, the production requirement does not, leaving the same amount of work to be done with less manpower to achieve the task.

Organizational commitment is one of the two individual outcomes derived from individual mechanisms like job satisfaction, stress, motivation, trust, justice, ethics, and learning and decision making. These mechanisms and outcomes can be found on the integrative model of organizational behavior (OB). Colquitt, LePine, and Wesson defined organizational commitment in their Organizational Behavior 5th Edition book as the desire of an employee to remain a member of the organization (p 64).

Downsizing is never easy on the Human Resource department. In fact, if not handled properly, it could be detrimental to the overall organization. Here are some challenges that come along with downsizing: Addressing the shifting morale and needs of the surviving employees, maintaining the productivity and profitability of the organization, and retaining skilled, and qualified employees.

The past several decades have seen waves of downsizing, restructuring and business reengineering as companies of all sizes and types struggle to remain competitive in an increasingly competitive and globalized marketplace. During downsizing initiatives, companies not only lose the tacit knowledge of the terminated employees, they also run the risk of demoralizing the remaining staff who will naturally wonder if they are next. This paper provides a review of the relevant peer-reviewed literature to develop a background and overview of these issues, and to determine how servant leadership and situational leadership can help address the inevitable problems that are typically associated with downsizing initiatives. Finally, a description of three important values that are needed by leaders today to effectively address these downsizing-related problems is followed by a summary of the research and important findings in the conclusion.

A corporation needs to have a strategic plan in place in order for them to be able to implement a downsizing. There are many pros and cons to downsizing and it has a ripple effect on everyone in the corporation. Depending on the planning of the downsizing, one of the big issues to decide on is how to choose who will be terminated. For example, do you go by seniority, a percentage from all departments, an entire department, or by job level or position? These are major options that need to be addressed before anything happens. Most corporations today exist less for the well being of employees than they

Downsizing has become a commonplace strategy for organizations to adopt in an effort to cut costs, eliminate redundancies, and streamline organizational systems. Over the last 15 years, many organizations have engaged in downsizing more than once. Most companies have learned from the mistakes of the past, but some companies are still trying to use the same tactics today that were used in the mid 1980s, that leave employees reeling.

The reenergizing employees after a downsizing case study, explains the potential effects of downsizing a company, on both employees and the manager. Andrea Zuckerman is the editor in chief of Blaze and the person who must relay the message to the entire company. It is made clear throughout the case that Andrea does not agree with this downsizing and feels that it is wrong. However, due to the newspaper industry dwindling away and many people now reading the news from a mobile device, it must be done. Andrea’s biggest conflict is figuring out how to properly explain this downsizing to employees, as this is no easy task. The “new normal” that will be implemented consists of merging the five areas of reporting into either two or three. As said, explaining this situation to employees in a reasonable and understanding manner will be a complex task.

Downsizing; everyone has heard about it, talked about it, been a victim of it, or even had to implement it. Reports of downsizing occur frequently. I have repeatedly read the newspaper, watched the news on television, or listened to the radio and heard about mass lay-offs. There have been times that I have felt pity for the various people who lost their jobs, and there have been instances that I have not given it a moment’s consideration. I just thought, “I’m so glad it is not happening where I work!” Fate, it seems, is not without a sense of irony.

The problem is I have to decide two employees that I am going to fire or ask to leave.

The downsizing of a company can affect employees before, during and after it occurs. Employees usually know of a possible downsizing, care of the almighty grapevine, months before it is supposed to happen. Thus, employees may become paranoid and self-absorbed, and their top priority is their own career rather than the bottom line of their employer. This causes them to be unfocused and prevents them from performing their jobs efficiently. Many workers would also be perfectly willing to stab their peers in the back in hopes of keeping their job. Usually when a downsizing is complete, the company is at an all-time low. This is due to the fact that in almost every merger, acquisition or downsize, employees are faced with uncertainty about their jobs before and after the restructure. After a large percentage of downsizes, ten percent of the remaining workforce will easily adapt to the change, while another ten percent will never adapt. Workers who survive the downsize often have feelings of anger, fear or distrust. Further internal problems result from employees who survive with the company, but cannot adapt to their new settings and expectations, and eventually quit their job.

Organizations take proper precautions while downsizing, minimalizing potential risks that can occur. Trends show that firms try to announce downsizing activities well in advance and offer buyouts or retirement packages. Others try to reinvent positions and eliminate old meaningless positions. They attempt to eliminate a comparable amount of positions in all levels to keep a good balance and lean model. These practices are considered aspects of good downsizing strategies. However there are still firms that use mass layoffs and the sale of company assets to cover losses in an attempt to become more effective and efficient.