1. What is downsizing?

Downsizing has been defined as ``a deliberate organisational decision to

reduce the workforce that is intended to improve organisational performance''
(Kozlowski et al., 1993, p. 267)
In popular usage ``downsizing'' is frequently used as a synonym for redundancy (Vollmann and
Brazas, 1993). It is also used interchangeably with a range of other, sometimes oxymoronic, terms
such as ``de-recruiting'', ``de-massing'', ``re-engineering'', ``re-sizing'', ``restructuring'',
``reorganisation'' and ``rightsizing'', to name but a few (Cameron, 1994b; McCune et al., 1988;
Turnbull and Wass, 1997).
2.

Identify the methods used to downsize. What are the issues surrounding the choice of
method for managing and organising?

Downsizing methods include the use of redundancy as well as alternatives which have traditionally
been associated with this method: natural attrition; early retirement; voluntary redundancy or
severance; redeployment and retraining, perhaps accompanied by recruitment freezes; short-time
working; and reducing overtime (Fowler, 1993; Greenhalgh et al., 1988; IDS, 1992; Lewis, 1993;
Thornhill, Stead and Gibbons, 1997).
Acrross the board redundancies could see vital workers lost
Alternative methods to redundancy such working hours reductions, job sharing, natural wastage and
redeployment (Greenhalgh et al., 1988; McCune et al., 1988).

Workforce Reduction;
Reducing head count e.g redundancy
Organisation Redesign;
Delayering, amount of work reduced and head count
Systemic Change;

Reactive and Proactive

reactive approaches, driven by a business strategy of cost reduction, which rely only or mainly on a
workforce reduction strategy, which itself may be associated with the use of redundancy as opposed
to any alternative, are likely to impair the achievement of organisational objectives and create other,
undesirable outcomes related to survivors of downsizing.

Problems with Workforce Reduction

Cameron et al. (1993) found that exclusive use of a workforce reduction strategy led to a reduction
in organisational performance. In a confirmatory study, Mishra and Mishra (1994) found that
organisational performance was adversely affected in relation to both cost and quality where this
strategy was used exclusively. Cameron (1994b, p. 197) compares the exclusive use of a workforce
reduction strategy to ``throwing a grenade into a crowded room...'' Such a strategy may lead to the
loss of valued organisational competence and negative consequences for those remaining
Organisation Redesign and Systemic Change;
By comparison, the use of an organisation redesign and/or systemic change strategy has been
positively related to organisational performance in terms of both cost reduction and quality
improvement (Cameron et al., 1993; Mishra and Mishra, 1994).

What are the individual consequences of downsizing?

Kozlowski et al. (1993,p. 302): ``Survivor reactions of fear, rigidity, loss of commitment, loss of
motivation, and failure to innovate may occur at the very time when the organisation is most in
need of employee support.''

Survivor problems

How can the consequences of downsizing be managed?

These include: business and human resource planning; determining which downsizing strategies are
to be used; communicating change and the possibility of redundancies; consulting with
representatives and affected individuals; training those responsible for implementation; devising
and using selection criteria; notifying redundant employees; and devising and implementing support
programmes for leavers and survivors (Fowler, 1993; Thornhill, Stead and Gibbons, 1997).