Downsizing and
Restructuring
, Learning Objectives
After reading this chapter, you should be able
to:
Appreciate the importance of defining “downsizing”
Be familiar with the complexity of the downsizing
decision
Recognize the need to address concerns of both
the victims and survivors of downsizing
Be aware of the ethical issues and consequences of
downsizing
Understand what downsizing strategies are
effective in enhancing organizational performance
,Comprehend the concept of the “psychological
contract”
Develop an awareness of the importance of HRM in
managing the downsizing process
2
, Downsizing
What is Downsizing?
A downsizing strategy reduces the scale
(size) and scope of a business to improve its
financial performance (Robbins & Pearce,
1992).
A reduction of the workforce is one of only
several possible ways of improving
profitability or reducing costs.
Restructuring
, Learning Objectives
After reading this chapter, you should be able
to:
Appreciate the importance of defining “downsizing”
Be familiar with the complexity of the downsizing
decision
Recognize the need to address concerns of both
the victims and survivors of downsizing
Be aware of the ethical issues and consequences of
downsizing
Understand what downsizing strategies are
effective in enhancing organizational performance
,Comprehend the concept of the “psychological
contract”
Develop an awareness of the importance of HRM in
managing the downsizing process
2
, Downsizing
What is Downsizing?
A downsizing strategy reduces the scale
(size) and scope of a business to improve its
financial performance (Robbins & Pearce,
1992).
A reduction of the workforce is one of only
several possible ways of improving
profitability or reducing costs.
