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Three main forms of the strategy downsizing organizations include reducing the amount of labor, organization design, and system strategy
How do organizations. Implement downsizing? Three forms of implementation strategies have
been identified; workforce reduction organization redesign,,, And systemic strategies (Farell &
Mavondo 2004). First,,The workforce reduction
strategy concentrates on the reduction of the
overall number, of employees including layoffs
retrenchments,,, Natural, retirements attritions early, hiring freezes
, parachutes and golden, buyout
packages. This strategy is commonly. Implemented
in a reactive manner as a cost-cutting measure
(Ryan, & Macky 1998), yet has shown to be rarely
successful.? Second.The organization redesign
strategy focuses on eliminating work and includes
activities such as, abolishing, functions eliminating
hierarchical. ,, levels redesigning tasks and
consolidating units (Farell, & Mavondo 2004).
Third the systemic, strategy assumes a more
holistic. And macro view focusing on changing the
organization í s intrinsic culture and the attitudes and
.Values of its employees (Luthans, & Sommer
1999). Studies have shown that most firms have
resorted to workforce reduction. Strategies
The Effects of Downsizing
The adoption of downsizing has profound
financial and human consequences. This has. Been
covered extensively in the literature. A closer
analysis of the effects that have manifested in the
wake of downsizing. Presents a complex picture
.With the following questions emerging:
ï Is downsizing an effective strategy?
ï Does downsizing lead to improved financial
, ï performance? Have downsized firms been able to reap the
anticipated financial improvements?
Unequivocally the overall, picture of the. Reported
financial effects of downsizing is bleak. While a
few firms have reported some, financial
improvementsThe majority of surveyed firms have
been unable to report improved levels of
efficiency effectiveness productivity,,, profitability and
. (Sahdev 2003 Zyglidopoulos,;,;, 2003
Macky 2004). Table 1 presents a non-exhaustive
overview of some of the main studies. Carried out
and their respective findings.
, & Sommer1999) studies have shown that most companies have used strategies to reduce labor.
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