The Impact of Downsizing Practices on Corporate Success

Abstract

Contains a review of the literature on research conducted to investigate organizational practices in downsizing after a restructure and the effects of these practices on the organization and its employees, in particular, and on other stakeholders in general. Based on the literature review, proposes a process model for the development and implementation of downsizing plans. The objective of the model is to provide a guide to be used by organizations when downsizing to ensure that the interests of all stakeholders are taken into account. The proposed model is tested through a field research in the form of case studies of five major organizations in Canada. Outlines the actual practices of these organizations and compares them with the proposed process model, both collectively and individually. Analyses the differences and proposes a new revised model that emphasizes not only the downsizing process itself, but also what organizations must do during and after downsizing to ensure that employees′ needs are met and that the new strategic goals that prompted the downsizing are achieved. Draws two conclusions from the research which are incorporated into the final proposed model.