HROB 4060 Lecture 7: HROB 4060 – week 7 (chpt. 10)

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Human Resources and Organizational Behaviour
HROB 4060
Mir Lofti

HROB 4060 week 7 Chapter 10 Downsizing and Restructuring The Downsizing Phenomenon Survivors employees remaining with an org after a downsize Downsizing strategy a strategy to improve an orgs efficiency by reducing the workforce, redesigning the work, or changing the systems of the organization Historically the focus of organizations was growth and bigger and better Downsizing is not restricted to the private sector Defining Downsizing and Restructuring Downsizing activities undertaken to improve organizational efficiency, productivity, andor competitiveness that affect the size of the firms workforce, its costs, and its work processes Workforce reduction a shortterm strategy to cut the number of employees through attrition, early retirement or voluntary severance packages, and layoffs or terminations Work redesign a mediumterm strategy in which orgs focus on work processes and assess whether specific functions, products, andor services should be eliminated Systematic change a longterm strategy that changes the orgs culture and attitudes, and employees values, with the goals of reducing costs and enhancing quality Types of Restructuring Portfolio restructuring changes to the orgs business portfolio, investments Financial restructuring financial changes such as reducing cash flow or increasing levels of debt Organizational restructuring any major reconfiguration of internal administrative structure that is associated with an intentional management change program Why do Organizations downsize? Declining profit Business downturn or increased pressure from competitors Merging with another org, resulting in duplication of efforts Introduction of new technology The need to reduce operating costs The desire to decrease levels of management Getting rid of employee deadwood Biggest reason is the belief that a downsize will reduce costs and improve the orgs financial position. Negative ramifications follow this: o Good employees quit o Org loses people they didnt want to lose o Mangers underestimate the degree to which the layoff decreases moral and increases fear
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