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Organizational Downsizing: Constraining, Cloning, Learning
Abstract
While downsizing rages through the U.S. economy, there is a great deal of uncertainty about its bottom-line effects. This uncertainty raises questions about why corporations have been so eager to engage in downsizing. In this article, we propose an answer to these questions. Three social forces, which we call constraining, cloning and learning, frequently provide a major impetus for downsizing. We describe these forces, and point out conditions that lead to the adoption of downsizing without due regard for its mixed consequences. We suggest methods to improve executives’ downsizing decision routines … methods that should enhance the chances of achieving intended benefits.
... Three institutional external social forces led to downsizing: learning (via MBA courses), cloning (imitation), and constraining, which is top management's determination to reduce. (Mckinley et al., 1995). Thus, managers carry out downsizing as a result of societal influences (Tsai and Yen, 2008). ...
... According to the institutional theory of downsizing (McKinley et al., 1995(McKinley et al., , 2000, many businesses view downsizing as a successful management strategy because of social reasons. Managers gradually embraced comparable downsizing tactics, like offering job-seeking assistance. ...
Downsizing is an organizational strategy used to reduce costs and improve performance to remain competitive. It is used by organizations to survive and adapt to changing market demands. The method used was to review thirty articles from well-recognized and highly ranked journals. The review process aims to gather all the factors and strategies of organizational downsizing from previous researches and articles between the years 1980 to 2019. The paper advances a deeper understanding of staff downsizing and addresses theoretical and methodological issues pertaining to the literature. The literature review assembled under the process of reviewing in the area of organizational downsizing and its impact on occupational stress and organizational commitment in these articles. After reviewing these papers, the findings gathered will be useful for organizations and employees.
... The four factors of PsyCap interact synergistically, with each factor adding unique variance and We can be heroes at work becoming additive to overall capital (Luthans et al., 2015). Scholars argue that PsyCap is important in equipping people with the internal resources they need to thrive in an economic and organizational landscape in which downsizing and the slashing of training budgets could become the norm (McKinley et al., 1995). ...
Purpose
The Great Resignation has led to a significant increase in the number of people quitting their jobs due to reasons such as stagnant wages, rising cost of living, job dissatisfaction and safety concerns. Therefore, the aim of this study is that it is important to help people develop better cognitive resources to face adversity.
Design/methodology/approach
The Great Resignation has led to a significant increase in the number of people quitting their jobs due to reasons such as stagnant wages, rising cost of living, job dissatisfaction and safety concerns. Therefore, it is important to help people develop better cognitive resources to face adversity. In this study, we administered a questionnaire to 250 employees to determine the variables that could help them build cognitive resources. These variables included the satisfaction of basic psychological needs (autonomy, competence and affiliation), psychological capital, motivation regulation (within the self-determination theory) and well-being (assessed by self-esteem, positive emotions, positive automatic thoughts and vitality). The results revealed that satisfaction of basic needs is associated with better psychological capital and more self-autonomous behavior, which leads to higher psychological well-being. These findings are discussed in the paper, emphasizing the importance of management and work context that satisfy the basic needs and help to build resources with psychological capital.
Findings
The results revealed that satisfaction of basic needs is associated with better psychological capital and more self-autonomous behavior, which leads to higher psychological well-being. These findings are discussed in the paper, emphasizing the importance of management and work context that satisfy the basic needs and help to build resources with psychological capital.
Originality/value
Highlight the importance of consequences of the Great Resignation and the need to internationalize this concept.
... Two types of works may be distinguished within the neo-institutional research program: works concerned with the further development of the body of theory and substantive works applying theory to discuss a particular theme(McAuley et al., 2007). Of the latter type, for instance, is the study ofMcKinley et al. (1995) on downsizing, in which the authors show how the practice became institutionalized in Anglo-American organizations despite a lack of evidence that it indeed increases profitability. ...
Artificial intelligence has firmly entered the collective imagination through books, films, and, more recently, news segments about mass surveillance, job replacement, complete automation, and technological singularity. In a way, the "mythology" around artificial intelligence significantly outgrows the already impressive advancements in the field. Therefore, it is not surprising that such ethos may shape and orient managerial perceptions of the future workplace, organizational design, culture, and norms. Although a mature research program, new institutional theory represents an appropriate lens through which the influence of AI on organizations and organizing can be studied. Conversely, the amount of neo-institutional literature on the topic is extremely scarce. In this paper, we first briefly present the research program, trace its historical development, and introduce the two fundamental concepts: institutional legitimization and isomorphism. Then, we critically review the available scholarly literature on AI and institutionalization. Finally, we discuss potential research questions and methodological challenges of applying neo-institutional insights to the study of artificial intelligence in organizations.
... Within the past few years, global firms not limited to multinational cooperation (MNCs), private and public firms, and small and medium enterprises (SMEs) have invariably adjusted their operating protocols. One of the most popular adopted organizational strategies has been to downsize [4][5][6][7] because of the economic stagnation caused by . During the height of COVID-19, many employees were relieved of their posts because either their services were no longer needed due to firm innovativeness, technology adoptions, or their firm's need to sustain their financial streams [8][9][10][11]. ...
This study aims to identify why firms, specifically SMEs in the hospitality and tourism
industry, downsized during the recent global economic distress caused by COVID-19. This study applied a quantitative methodology by distributing online questionnaires to SME owners and managers who operate in the tourism industry of the UAE. We analysed the collected data using structural equation modelling. A total of 320 questionnaires were analysed using the PLS-SEM analytic tool. Our findings revealed that the investigated constructs, namely financial sustainability,
SMEs’ innovativeness, and technology adoption predict the implementation of downsizing strategies during economic distress. However, financial sustainability failed to expedite SMEs’ innovativeness and technology adoption during this period. Therefore, the findings of this study show the impacts of financial strength, technology adoption, and innovativeness on implementing downsizing strategies, and provide suggested recommendations in light of the observed results.
El trabajo aborda el fenómeno de las reducciones de plantilla estudiando las causas del mismo desde la perspectiva del neoinstitucionalismo en la teoría de la organización. Este enfoque aporta una explicación complementaria frente a la explicación tradicional que contempla únicamente motivos económicos basados en la búsqueda de la eficiencia. Se señala, frente a ello, la importancia de la búsqueda de la legitimidad por parte de las empresas en el entorno en el que están inmersas y el modo en el que el entorno influye en la adopción de aquellas estrategias y prácticas gerenciales que se consideran adecuadas para una buena gestión, atribuyendo un papel determinante al marco legal, la incertidumbre y la emergencia y consolidación de ideologías directivas.
Structural hysteresis provides a conceptual framework in which to consider relationships between organization size and structure during periods of decline. The use of this framework, as an extension of current theory, indicates that relationships between size and structure in declining organizations do not parallel those found in growing organizations. Participation problems, commitment, and coalition politics may explain the occurrence of structural hysteresis. Implications for theory and research are discussed.
Argues that the formal structure of many organizations in post-industrial society dramatically reflect the myths of their institutional environment instead of the demands of their work activities. The authors review prevailing theories of the origins of formal structures and the main problem which those theories confront -- namely, that their assumption that successful coordination and control of activity are responsible for the rise of modern formal organization is not substantiated by empirical evidence. Rather, there is a great gap between the formal structure and the informal practices that govern actual work activities. The authors present an alternative source for formal structures by suggesting that myths embedded in the institutional environment help to explain the adoption of formal structures. Earlier sources understood bureaucratization as emanating from the rationalization of the workplace. Nevertheless, the observation that some formal practices are not followed in favor of other unofficial ones indicates that not all formal structures advance efficiency as a rationalized system would require. Therefore another source of legitimacy is required. This is found in conforming the organization's structure to that of the powerful myths that institutionalized products, services, techniques, policies, and programs become. (CAR)
The demand for services provided by a telecommunications firm dropped sharply during the 1979 recession. The company had no history of layoffs. Because it was in a regulated industry and its rate-of-return was guaranteed, the firm was buffered from many of the usual uncertainties associated with declining demand. In spite of its secure position, history, and reputation, top management made a decision to respond quickly to the downturn and lay off 100 employees. Perhaps the layoffs were intended to be a symbolic gesture, since the number of people affected was very small relative to the total number of employees. If this was the company's intention, the impact was grossly miscalculated. Because of the unwise timing of the layoffs, they caused widespread disaffection. Employee morale and confidence in top management plummeted. The event gained in infamy, and in the corridors and washrooms of corporate headquarters it became known as the “Christmas Eve Massacre”.
Are cutbacks and layoffs the proper organizational response to industry decline? It depends on the conditions and the options available.
Organizational Downsizing: A Convergence and Reorientation Framework
- Mishra
Mishra, "Best Practices in White-Collar
Downsizing: Managing Contradictions," The
Academy of Management Executive, 5(3), 1991,
58. See also S.J. Freeman and K.S. Cameron,
"Organizational Downsizing: A Convergence
and Reorientation Framework," Organization
Science, 4, 1993, 10-29.
The Pain of Downsizing
- J A Byrne
J.A. Byrne, "The Pain of Downsizing,"
Business Week, May 9, 1994, 61.
'" The AMA survey result is reported in R.