Downsizing And Organizational Culture

Essay by raoofkhanUniversity, Master'sA, August 2004

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In this article Hickok argues that, ultimately, the most prominent effects of downsizing will be in relation to culture change, not in relation to saved costs or short-term productivity gains. In particular, the author notes three observations in relation to the impact of downsizing on organizational culture. First, it clearly appears that power has shifted away from rank-and-file employees in the direction of top management/ownership. Accompanying this change is a shift in emphasis away from the well-being of individuals in the direction of the pre-eminence and predominance of the organization as a whole. Second, it appears working relationships have changed away from being "familial" in the direction of being more competitive. Third, the employer-employee relationship has moved away from long-term and stable in the direction of short-term and contingent.

The author suggests five simple question areas that organizational leaders who are interested in probing the moral and spiritual dimensions of downsizing might usefully consider.

These include ensuring the fundamental decency of the approach being considered, engaging in appropriate dialogue, thinking through the consequences for those who may be adversely affected, having ready explanations for multiple constituencies, and offering a realistic opportunity for a better future for the organization and the organization's stakeholders.


Downsizing And Organizational Culture


A noted scholar recently assessed downsizing as "probably the most pervasive yet understudied phenomenon in the business world" (Cameron, 1994). While we have become numbed by the near daily accounts of new layoffs, a New York Times national survey finding is perhaps more telling: since 1980, a family member in one-third of all U.S. households has been laid off (New York Times, 1996). By some measures, downsizing has failed abjectly as a tool to achieve the main raison d'etre, reduced costs. According to a Wyatt Company survey covering the period between...