Determinants of Work Force Reduction Strategies in Declining Organizations

Greenhalgh, Leonard; Lawrence, Anne; Sutton, Robert I.

doi:10.2307/258575

Cited by 49 publications

(40 citation statements)

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“…For the purposes of this study, we follow the lead of Greenhalgh, Lawrence and Sutton (1988) who used the term "workforce reductions" to address "downsizing". Since downsizing (when broadly defined) may incorporate the use of one or more resource reduction options (in conjunctions with personnel reductions), the term workforce reduction better distinguishes it from these other restructuring methods (DeWitt 1993(DeWitt , 1998Hoskisson and Hitts 1994).…”

Section: Downsizing Implementation and Firm Performance: Hypothesesmentioning

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: Downsizing Implementation and Firm Performance: Hypothesesmentioning

confidence: 99%

Downsizing implementation and financial performance

Muñoz‐Bullón

Sánchez-Bueno

2010

Management Decision

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“…One, pursued by labor economists, involves studying how plant closings impact length of unemployment, personal income, community income and local tax base (e.g., Aiken, Ferman, & Sheppard, 1968), workforce reduction strategies during decline and plant closings (Greenhalgh, et, al., 1989). Another stream has studied productivity change during the process of closedown (e.g., Bergman & Wigblad, 1999;Hansson & Wigblad, 2006a;Wigblad, Lewer, Hansson, 2007).…”

Section: Organizational Death Researchmentioning

confidence: 99%

Organizational Death and Employee Motivation: Investigating a Plant Closure in a Multi-plant Organization

Häsänen¹

2010

PsycEXTRA Dataset

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Major organizational changes are often connected with a variety of negative outcomes for both employees and the organization alike. As a contrast to this, organizational deaths have instead been associated with increased productivity and motivation to perform, despite certainty of job loss. These results have been regarded as counter-intuitive, since employment and job security are regarded as a foundation for work motivation. Consequently, this thesis aims at investigating the motivational aspects of organizational deaths in terms of change in motivation as individuals adjust to changing realities. The thesis rests on three empirical studies.The first study"s results showed (contrary to theoretical postulations) that goal setting was able to influence employees" in-role and extra-role performance, job-induced tension, commitment to the closure, and job satisfaction. The second study showed that organizational productivity, efficiency, performance, motivation and psychological climate increased for both bluecollar and white-collar employees". The results of the third study lend support to the anecdotal reports of high performers decreasing in their efforts during closures, but only when they perceive low justice, and while low performers perceiving low justice, received had second highest scores on effort. The results of the empirical studies support the notion that organizational productivity increases along with employees" motivation to perform. Finally, a common pattern in the data was that most positive variables increased and the negative variables decreased. These results are explained by the adoption of new goals, which creates horizontal coherence (harmony) among goals, which gives rise to goal proximity (motivation increases due to moving closer to the goal).

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“…Organizational decline refers to a decrease in an organization's resource base over time (Cameron & Whetten, 1987aand 1987b: D'Aveni, 1989. It occurs when an organization either fails to maintain its level of adaptation to a stable environmental niche or fails to increase its domination of a contracting niche (Greenhalgh, Lawrence, & Sutton, 1988). Environmental decline is defined as a reduction in the size or qualitative nature (shape) of an organization's environmental niche (McKinley, 1987;Cameron & Zammuto, 1983).…”

Section: Definition/classificationmentioning

confidence: 99%

“…Direct and indirect costs of layoffs include increased unemployment insurance premiuns, severance payments, legal fees. outplacement support, and the cost of training new employees when needed (Bailey & Sherman, 1988;Greenhalgh et al, 1988;Perry, 1986). Other cited indirect costs may include increased turnover among valued employees, absenteeism, declining commitment and loyalty.…”

Section: Secondary Effects Of Work Force Reductionmentioning

confidence: 99%

Principles of Design for High Performing Organizations: An Assessment of the State of the Field of Organizational Design Research

Osborn¹,

Baughn²

1994

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Determinants of Work Force Reduction Strategies in Declining Organizations

Cited by 49 publications

References 0 publications

Downsizing implementation and financial performance

Downsizing implementation and financial performance

Organizational Death and Employee Motivation: Investigating a Plant Closure in a Multi-plant Organization

Principles of Design for High Performing Organizations: An Assessment of the State of the Field of Organizational Design Research

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