A Sociocognitive Interpretation of Organizational Downsizing

McKinley, William; Zhao, Jun; Rust, Kathleen G.

doi:10.2307/259272

Cited by 121 publications

(159 citation statements)

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“…The third research area has been on the relationship between downsizing and corporate performance. While some studies suggest that firms choose to downsize in order to cut costs, and/or to improve financial performance (Espahbodi et al, 2000;Kozlowski et al, 1993;Mone, 1994) -under the assumption that firm's profitability will be increased with fewer employees (Cascio et al, 1997;Mckinley et al, 2000)-another stream of research finds that the effect of personnel reduction on profitability is non-existent or even negative. Therefore, downsizing may be inefficient and companies that downsize may be unable to financially outperform companies that maintain their employees (Mentzer, 1996;Morris et al, 1999;Vanderheiden et al, 1999).…”

Section: Literature Reviewmentioning

confidence: 99%

Downsizing implementation and financial performance

Muñoz‐Bullón

Sánchez-Bueno

2010

Management Decision

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In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented.

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Section: Literature Reviewmentioning

confidence: 99%

Downsizing implementation and financial performance

Muñoz‐Bullón

Sánchez-Bueno

2010

Management Decision

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“…In the management literature, considerable attention has been devoted to the phenomenon of layoff (see McKinley, Zhao, andRust 2000, andParker andMcKinley 2008, for reviews). One branch of this literature focuses on the effects of layoffs on the individuals who lose their jobs (Leana and Feldman 1992;Leana and Ivancevich 1987;Pugh, Skarlicki, and Passell 2003).…”

Section: Layoff As a Stimulus For Entrepreneurial Intentmentioning

confidence: 99%

Endings and Visions of New Beginnings: The Effects of Source of Unemployment and Duration of Unemployment on Entrepreneurial Intent

Wood

McKinley

Engstrom

2013

Entrepreneurship Research Journal

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This study adopts the push-entrepreneurship perspective and develops a conceptual framework grounded in prospect theory, in order to investigate whether source of sunemployment, layoff in particular, and duration of unemployment stimulate entrepreneurial intent. We also propose that fear of failure and risk propensity moderate the source/duration-entrepreneurial intent relationships. We test our hypotheses using survey data from a sample of unemployed individuals. Results show that both layoff and duration of unemployment are stimuli for higher entrepreneurial intent, and the source of unemploymentintent relationship is moderated by fear of failure and risk propensity. We discuss the implications of these results. Abstract: This study adopts the push-entrepreneurship perspective and develops a conceptual framework grounded in prospect theory, in order to investigate whether source of sunemployment, layoff in particular, and duration of unemployment stimulate entrepreneurial intent. We also propose that fear of failure and risk propensity moderate the source/duration-entrepreneurial intent relationships. We test our hypotheses using survey data from a sample of unemployed individuals. Results show that both layoff and duration of unemployment are stimuli for higher entrepreneurial intent, and the source of unemployment-intent relationship is moderated by fear of failure and risk propensity. We discuss the implications of these results.

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“…Such a view is consonant with the way that managerialist accounts of downsizing are generally justified in relation to ethics. While examinations of the relations between ethics and downsizing has only recently begun (McKinley et al, 2000;Orlando, 1999), they are largely limited to discussions of employee perceptions of the fairness of decisions made to downsize, and deliberations over the 'most ethical' means through which downsizing can be executed (Lämsä, 1999). When ethics is considered in relation to employees, the focus is on the demands of the process on managers (Lämsä, 1999;Lämsä and Takala, 2000) and how the 'negative effects' can be buttressed, at least to some extent, by 'good' management practice (Palmer et al, 1997).…”

Section: The Refiguration Of V-tech and The Limiting Of Ethical Concernsmentioning

confidence: 99%

‘If I Should Fall From Grace…’: Stories of Change and Organizational Ethics

2009

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ABSTRACT. Although studies in organizational storytelling have dealt extensively with the relationship between narrative, power and organizational change, little attention has been paid to the implications of this for ethics within organizations. This article addresses this by presenting an analysis of narrative and ethics as it relates to the practice of organizational downsizing. Drawing on Paul Ricoeur's theories of narrative and ethics, we analyze stories of organizational change reported by employees and managers in an organization that had undergone persistent downsizing. Our analysis maintains that the presence of a dominant story that seeks to legitimate organizational change also serves to normalize it, and that this, in turn, diminishes the capacity for organizations to scrutinize the ethics of their actions. We argue that when organizational change narratives become singularized through dominant forms of emplotment, ethical deliberation and responsibility in organizations are diminished. More generally, we contend that the narrative closure achieved by the presence of a dominant narrative amongst employees undergoing organizational change is antithetical to the openness required for ethical questioning.

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A Sociocognitive Interpretation of Organizational Downsizing

Cited by 121 publications

References 0 publications

Downsizing implementation and financial performance

Downsizing implementation and financial performance

Endings and Visions of New Beginnings: The Effects of Source of Unemployment and Duration of Unemployment on Entrepreneurial Intent

‘If I Should Fall From Grace…’: Stories of Change and Organizational Ethics

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