An exploratory study of the downsizing process

Abstract

This study examined managerial perceptions of the downsizing process within large Australian banks. The main purpose was to conceptualise the downsizing process and to test, refine, and extend the preliminary conceptual framework. The study demonstrates that downsizing was perceived as a multi-phase process – including pre, while, and post phases. Australia's senior bank managers acknowledged the existence of a three-phase process. However, they pointed out that in practical terms only two phases, pre and post phases were distinguished. Australian banks commenced downsizing activities without adequate HR plans, policies, and programmes in place. The announcement of downsizing usually coincided with the implementation of downsizing. The while and post phases were further divided into stages A and B. Finally, downsizing was viewed as a concept involving multiple rounds of downsizing. As a consequence, a second alternative conceptual framework emerged taking into account that downsizing could be a recurring and perpetual activity.