It is no secret that U.S. industry, once the most productive in the world, is now
lagging behind its global competitors. What is not well known is that blue-collar
productivity is not necessarily the problem. Between 1978 and 1986, for example,
the number of production workers declilned by six percent while real output rose
15 percent. White-collar productivity decreased six percent while the ... [Show full abstract] number of
workers increased by twenty-one percent.
Downsizing, which involves reducing the workforce, but also eliminates
functions and redesigns systems and poiicies to contain costs, is becoming more
common in U.S. companies. Despite its pervasiveness, however, downsizing has
rarely been investigated by organization and management researchers.
This article seeks to identify the processes used in effective downsizing as well
as the consequences that result. The authors studied organizational downsizing
and redesign for four years in thirty organizations in the automobile industry.
Six general strategies are presented that highlight the best practices of these
firms that are downsizing effectively.