A Multilevel Appraisal and Conceptualization of Company Downsizing

Downsizing is widely used to improve corporate efficiency and competitiveness. Although downsizing can be useful, the process has a number of associated disadvantages, and companies commonly overlook the negative impact on society, the business profession, the company, and employees' collective attitudes and perceptions. Consequently, the purpose of this study was to present a multilevel framework that examines the impact of societal, institutional, organizational, and individual factors on corporate downsizing. The potential negative effects of downsizing on each of these domains are also examined, and recommendations regarding the successful implementation of employee reduction programs are presented based on information highlighted in the framework.     

Economic austerity and healthcare restructuring: correlates and consequences of nursing job insecurity

The healthcare system underwent considerable restructuring and downsizing in the early to mid-1990s in several countries as governments cut costs to reduce their budget deficits. Studies of the effects of these efforts on nursing staff and hospital functioning in various countries generally reported negative impacts. Healthcare restructuring and hospital downsizing is again being implemented in North America in 2009/2010 as governments struggle to reduce their deficits at a time of worldwide economic recession. The present study examines the relationship of hospital restructuring initiatives in and their link with increased threats to job security with a variety of individual and hospital outcomes in a sample of nursing staff working in hospitals undergoing significant restructuring and downsizing. Data were collected from 289 nursing staff working in California hospitals. Nurses reported a relatively large number of restructuring and downsizing initiatives. Restructuring initiatives and threats to job security accounted for a greater increment in explained variance on every outcome measure than did personal demographic factors and work situation characteristics. Threats to job security were generally associated with negative work attitudes and satisfactions, levels of psychological well-being and perceptions of hospital functioning. Some suggestions for more successful approaches to cost reductions are offered.     

The Face-to-Face Delivery of Downsizing Decisions in UK Public Sector Organizations: The envoy role

In the wake of current UK public sector retrenchment, this article introduces a role that may be important to successful restructuring management, referred to here as the ‘downsizing envoy’. It involves delivering the news of downsizing decisions, face to face, with the victims and then dealing with the repercussions. After a review of the relevant, but limited, literature the findings are presented from interviews with twenty-four envoys drawn from public sector organizations. They indicate that the envoy role is emotionally demanding and that the public sector context invokes additional pressures that may not occur in other sectors.     

Going global,feeling small: an examination of managers' reactions to global restructuring in a multinational organisation

This paper is concerned with examining the reactions of managers to the process of global restructuring in a large, multinational food-processing company. Much extant research concerning globalisation has focused on the wider economic, political and social outcomes. Perhaps surprisingly, relatively little attention has been given to how globalisation is experienced inside organisations. This paper examines how country-level managers have been affected by the move to a new global structure in their organisation. We present evidence of these managers feeling disempowered by global reorganisation and of a largely negative impact on their feelings towards the organisation they work for.     

The paths from insider to outsider: A review of employee exit transitions

Employees' roles as organizational members often do not end immediately after they have made the decision to leave or it has been made for them. Instead, this decision serves as a turning point initiating an exit transition process. The purpose of this article is to consolidate prior scholarship in order to gain an understanding of the state of the science, as it pertains to exit transitions. Our literature review yielded almost 200 articles that have directly or indirectly studied the exit transition process. In organizing the insights from these studies, four categories of exit transition scholarship emerged—exit transitions in the context of voluntary turnover, involuntary turnover, temporary transitions, and top management exits. Moreover, our review indicated that exit transitions are shaped by three critical forces—the permanence of the transition, the magnitude of the identity change associated with the exit, and the organizational impact of the exit. We review research on each of the four categories and show how each type of transition is shaped by these forces. Finally, we turn our focus to the future of work and discuss how changes in the way that work is structured may alter the study of employee exit transitions in the future.     

Flexible work arrangements,national culture,organisational characteristics,and organisational outcomes: A study across 21 countries

Using a contingency perspective, we investigated two complementary topics: (a) the influence of the GLOBE national cultural values and key organisational variables on employee use of flexible work arrangements (FWAs), and (b) the contribution of the level of congruence between cultural values and FWA use on absenteeism and turnover. The results, based on Cranfield Network on Comparative Human Resource Management—a large data set across multiple countries—supported the hypothesised effects of the cultural values on employee use of FWAs and the moderating effects of these cultural values on FWA use and organisational outcomes. Specifically, we found that national cultural values and organisational characteristics were related to outcomes via FWA use; and employees' use of FWAs had the overall effect of reducing absenteeism and turnover, but this effect was weakened when the FWAs were not consistent with cultural values. Theoretically, our results add to our knowledge and understanding of the effects of FWA use on absenteeism and turnover under different degrees of “fit” with cultural context. From a practical perspective, our results suggest that organisations should consider national cultural characteristics before implementing FWAs. A misfit between national culture and FWAs would potentially reduce employee use of FWAs and increase the likelihood of absenteeism and turnover.     

Downsizing and survivor reactions in Malaysia: modelling antecedents and outcomes of psychological contract violation

This study provides an empirical test of a model of antecedents and consequences of psychological contract violation (PCV) caused by the experience of downsizing. A longitudinal survey method was used to collect data at two different points in time (a month after downsizing, and eight months later) from a sample of 281 survivors from a large Malaysian organization going through downsizing. Respondents were from the headquarters (HQ), factories and subsidiaries located across the country and were employed across hierarchical positions including managers, supervisors, technical, operating and administrative staff. A causal model is proposed and tested. The model proposes that the perception of justice and negative affectivity at time 1 (T1) predict PCV, which in turn predicts three attitudinal and behavioural outcomes of commitment, organizational citizenship behaviours (OCBs) and turnover intentions at time 2 (T2). Three variations of the model (fully-mediated, partially-mediated and unmediated) were tested with structural equation modelling. The results show that both the perception of justice and negative affectivity significantly predict PCV, and that there is a direct effect between PCV and commitment, an indirect effect between PCV and OCBs, and both direct and indirect effects between PCV and turnover intentions. The findings demonstrate the utility of psychological contact framework in explaining survivor reactions to downsizing.     

“Your Job No Longer Exists!”: From Experiences of Alienation to Expectations of Resilience—A Phenomenological Study

We have entered the age of the contingent or temporary worker, the consultant and the subcontractor. Workers are expected to be pliable and tractable; to “fit in.” Being made redundant is also an area where modern workers are expected to be flexible and resilient. However, when these so-called “flexible” workers are told their job no longer exists, the accompanying sense of rejection and alienation can be excruciating. Stories of being made redundant were collected during an exploratory, qualitative study, using Heideggerian phenomenology as the methodological vehicle to capture the lived experiences of those affected. Focused, in-depth interviews were conducted with the ten respondents; nine men and one woman. The stories shared suggest that being made redundant is an alienating experience with respondents sharing feelings of powerlessness, shock, betrayal, shame and social isolation. Unfortunately, those having experienced redundancy were also not as resilient as is routinely assumed. They did not “bounce back” unchanged, but reported significant negative outcomes including fear for the future, underemployment, family disruptions and an erosion of trust. Recommendations are made orienting organisations towards a more human process of redundancy.     

Workforce Downsizing and Firm Performance: An Organizational Routine Perspective

While there is an extensive body of work on how organizational routines emerge and evolve over time, there is a scarcity of research on what happens when routines are disrupted or disbanded through the elimination of key individuals involved in them. This study is the first to theorize and empirically examine the relationship between the magnitude of workforce downsizing and firm performance applying an organizational routine perspective. Consistent with prior research on organizational routines, we posit that small‐scale downsizing leads to efficiency improvements without disrupting the existing routines. While larger routine disruptions occur in both medium‐ and large‐scale downsizing, we further argue and find that large‐scale downsizing tends to be more beneficial than medium‐scale downsizing. Building on prior research on routines, we reason that in medium‐scale downsizing employees try to salvage the impaired, partially functioning routines, while large‐scale downsizing requires a more fundamental rethinking and re‐creation of routines leading to more positive outcomes. Our study contributes to downsizing research through the application of the organizational routine perspective to explain the financial outcomes of downsizing. In doing so, we depart from the widely held assumption in the downsizing literature that the relationship between the magnitude of downsizing and firm performance is linear. Our study also extends prior research on organizational routines by highlighting the usefulness of conceiving routines as mindful accomplishments where the pressure to engage in path‐breaking cognitive effort may lead to better results than path‐dependent repairing of routines.     

Family Business Restructuring: A Review and Research Agenda

Although business restructuring occurs frequently and it is important for the prosperity of family firms across generations, research on family firms has largely evolved separately from research on business restructuring. This is a missed opportunity, since the two domains are complementary, and understanding the context, process, content, and outcome dimensions is relevant to both research streams. We address this by examining the intersection between research on business restructuring and family firms to improve our knowledge of each area and inform future research. To achieve this goal, we review and organize research across different dimensions to create an integrative framework. Building on current research, we focus on 88 studies at the intersection of family firm and business restructuring research to develop a model that identifies research needs and suggests directions for future research.     

The importance of HR practices and workplace trust in achieving superior performance: A study of public-sector organizations

This paper assesses the impact of bundles of HR practices on workplace trust, job satisfaction, commitment, effort and perceived organizational performance. A theoretical model is developed and tested using data collected through a postal survey of UK local government employees. The results support the hypothesis that HR practices are powerful predictors of trust and organizational performance. These findings demonstrate the need for public organizations to re-evaluate their current battery of HR practices in an attempt to improve overall performance.     

Multinationals and human resource practices in Ireland: a rejection of the 'new conformance thesis': a reply

This paper reports on a study of 398 people employed in two UK service organizations: a hospital and two divisions of a high street bank. The main purpose of the study was to determine the degree to which dispositional factors (predisposition to trust and trait anxiety) and situational factors (seven aspects of the job environment) predicted a person's reported trust in their managers. Two types of managers were investigated: a person's immediate line manager and ‘senior managers in their industry’. It was hypothesized that the dispositional factors would have a greater influence on trust in managers in the industry and that situational factors would have a greater influence on trust in one's immediate line manager. The first hypothesis was supported, but the second was not. It was found that trust in both types of managers was best predicted by a combination of general disposition to trust (not trait anxiety) and situational factors: five of the seven situational factors had a role in predicting intention to trust. This reflects the complexity involved in predicting trust at work and the managerial challenge of creating a trusting culture.     

Exit-voice and employee absenteeism: A critique of the industrial relations literature

Industrial relations research that has examined the effects of collective voice on employee absenteeism through traditional exit-voice analyses suffers from a number of important theoretical and empirical limitations. The research is limited theoretically in that the framework used cannot discretely classify absenteeism as a form of either exit or voice. This inability reflects a larger problem with the exit-voice framework’s lack of adequate attention to the conditions under which collective voice mechanisms fail and the consequences of such failure for the behavior of industrial relations actors. Exit-voice studies of absenteeism have important methodological problems, particularly in the way absenteeism and voice criteria have been operationalized. These defects in the literature can be addressed through the integration of behavioral theory and research on such topics as absenteeism, exit, voice, loyalty and neglect, and the literature on organizational justice.     

Review of no-fault absenteeism cases taken to arbitration, 1980–1989: A rights and responsibilities analysis

No-fault absenteeism control programs represent an emerging counterpoint to traditional misconduct-based approaches. By altering the policies governing absence in the work place, the rights and responsibilities of both the employee and employer may be modified. This article examines the arbitral standards applied in the disposition of grievances arising under no-fault absenteeism plans. Arbitration cases from 1980 to 1989 are analyzed; a taxonomic structure for reviewing arbitrator rulings on the unilateral imposition of no-fault programs, as well as discipline and discharge arising under no-fault policies, is developed. While advocates of no-fault plans have asserted that arbitrators will embrace these plans, the results of this analysis indicate that arbitrators will infuse standard elements of reasonableness and just cause into no-fault policy. Trends in arbitral standards in absence cases, policy-making strategies for managements and unions, as well as implications for the rights and responsibilities of employees and employers are outlined.     

Safety issues beyond the workplace: Estimate relationships between work injuries and available supervision

This study reports the results of an investigation of the relation between one measure of the performance of firms, work injuries, and the number of first level supervisors for 140 chemical, paper, and wood product manufacturing firms. Additional numbers of supervisors were found to be associated with lower work injuries in most cases, and the cost of such additional supervision was found to be partially justified in terms of the reduced costs of work injuries, although there was considerable variation across industry.     

On the Technically Efficient Organization of an Industry: A Study of U.S. Airlines

In nonparametric analysis of production efficiency, the focus of attention is typically on the individual firm. In this article, we evaluate efficiency in resource utilization at the industry level. We propose an integer programming model to measure the extent of input saving possible if the observed output level of the industry is allocated to an optimal number of identical firms. This approach is applied to data for U.S. airlines covering the period 1970–84. Our results confirm that there were too few airlines prior to deregulation and suggest that there were too many firms during the early years of the post-deregulation era.     

Internal and external restructuring over the cycle: a firm-based analysis of gross flows and productivity growth in Portugal

This paper discusses the role played by internal restructuring vis-à-vis external restructuring in industry productivity growth, arguing that the contribution of these two components is expected to be sensitive to the economic cycle. The study describes gross flows (job and output) over a period of one decade, and analyses the productivity differential among continuing, entering and exiting firms in the Portuguese manufacturing sector. The results of the decomposition of industry productivity growth suggest that the share of external restructuring is stronger in recession, while internal restructuring seems to be predominant in expansion. The strong and positive contribution of the net entry effect, in 1991–1994, was not followed by any between and cross effects of equivalent magnitude in the 1994–1997 sub-period. The within effect is, as expected, stronger when output growth is at its peak, but in no case large enough to turn productivity growth procyclical.

How mass layoffs are related to lower job performance and OCB among surviving employees in Chile: an investigation of the essential role of psychological contract

This study aimed to investigate how mass layoffs impact surviving employees in organizations. More specifically, this study ascertained the relationships between mass layoffs and employee work behaviors. It was theorized that mass layoffs will be negatively related to employee performance and organizational citizenship behaviors (OCB) through its relationships with job insecurity and psychological contract breach. Moreover, it was expected that perceived manager support would buffer against the negative relations of contract breach with employee performance and OCB. A study among 615 employees in multiple Chilean organizations showed support for the hypotheses: job insecurity and psychological contract breach mediated the relationships between mass layoffs and employee performance and OCB. We also found moderating relationships of manager support, but the relations of breach with performance and OCB were particularly negative when manager support was high, indicating feelings of betrayal among high-support employees in response to contract breach. Moreover, the relation of contract breach with performance was positive for low-support employees, and non-significant for high-support employees. Our study advances understanding of the processes underlying how mass layoffs influence employee behavior in the workplace, through introducing the psychological contract as a way of understanding the relationships.     

Privacy and Electronic Monitoring in the Workplace: A Model of Managerial Cognition and Relational Trust Development

This paper explores the impact of experience at the current organization, prior experience at other organizations, and individual propensity to trust on workplace electronic monitoring and trust formation between employees and management. Taking a cognitive approach, these relationships are investigated through the lens of cognitive categorization theory. The paper discusses trustworthiness as the category label of a group of traits and behaviors that subsequently leads to lower levels of turnover, increased organizational commitment, and lower levels of electronic monitoring. Organizational and individual level outcomes are explored with respect to electronic monitoring procedures in organizations. The discussion focuses on implications for practice and future research as well as several ethical and managerial implications, and provides recommendations regarding implementation of electronic monitoring systems for managers.