Negative consequences
Take the case of Mark Hurd, the former CEO at HP. During his five-year tenure there, which ended in August 2010, the company excelled at the metrics that spell conventional success. Profits increased at an average of 18 percent annually. The stock price more than doubled, and HP became the biggest technology company in the United States in terms of revenue.
Some of that success was the result of drastic cost cutting by Hurd, including the elimination of 24,600 jobs in 2009. But there were consequences. As often happens following a big downsizing, employee morale took a dive. Internal employee surveys at the time showed that nearly two-thirds said they would leave if they got an offer from another company, according to technology consultant Rob Enderle.
Cuts also drove down the company's investment in R&D - its future. Charles House, a former HP engineer who now runs a research company at Stanford, told New York Times business columnist Joe Nocera, "That's why HP had no response to the iPad."
Cost-cutting through layoffs may make CEOs look like heroes in the short-term, but the long-term effects on performance can be severe, and some of the companies that indulge in it may falter in the future according to Cascio. Research shows that companies that cut their workforce by more than 20 percent lag their industry for as long as nine years after a recession.
downsizing เป็นกลยุทธ์ที่ใช้ในองค์กรโดยมีวัตถุประสงค์เพื่อปรับปรุงประสิทธิภาพ ผลิตภาพหรือความสามารถในการแข่งขันขององค์กร โดยมันจะมีผลต่อการเปลี่ยนแปลงขนาดแรงงานขององค์กร,ต้นทุน ซึ่งเป็นการลดค่าใช้จ่ายเพื่อเพิ่มรายได้ให้กับองค์กร และกระบวนการทำงาน. คุณสมบัติหลักของ downsizing 4ประการ คือ intent, personnel, efficiency and work processes เป็นตัวช่วยกำหนดและระบุขอบเขตdownsizingจากจากแนวคิดอื่น ๆที่เกี่ยวข้อง
The downsizing is focused on improving the efficiency , productivity or competitiveness of the organization. It represents a strategy implement of an organization and design to improve efficiency , productivity or competitiveness. It represents a strategy implemented by managers that affects the size of the organizations workforce, expenditure to enhance revenue or reduce to payment and the work process. On the surface, downsizing can be interpreted as merely a reduction in organizational size. But when this the case , downsizing is often confused with the concept of organizational decline, which also can be superficially interpreted as a mere reduction in organizational size. Four major attributes of downsizing help define it and identify its commonality or distinctiveness from other related concepts. They relate to intent, personnel, efficiency and work processes.
The downsizing is focused on improving the efficiency of the organization that occurs either proactively and reactively in order to contain costs , to enhance revenue or to bolster competitiveness. That is downsizing may be implemented as a defensive reaction to decline or as a proactive strategy to enhance organizational performance
There are, of course, several ways that the argument can be reconciled. One way, for example, would be to recognize that the question is not as simple at it first appears and that, while downsizing can be beneficial for organizations (as in a "necessary evil"), it is frequently not good for the laid-off employees or for the guilt-ridden "survivors." Another possible reconciliation considers the tradeoff between the short-term and long-term merits versus costs of downsizing. It can be argued, for example, that downsizing can be functional for the organization in terms of short-term profits and losses while simultaneously be dysfunctional for employees facing unemployment, loss of benefits, and a host of negative psychological effects.
Conversely, in the long-run downsizing can be detrimental for an organization since fewer human resources are available to respond to market demand or required product development (Dougherty and Bowman, 1995); concurrently, downsizing may be helpful for employees in the long run to the extent that those laid off find better jobs and increased employment security. While both these possible reconciliations offer post-hoc explanations that may partially explain the simultaneous functional and dysfunctional effects of downsizing, neither advances our understanding of the processes surrounding downsizing.
Specifically, because neither deals with the underlying behavioral and psychological processes affected by downsizing, neither offers much possibility for expanding our predictive capabilities of the consequences of downsizing. Thus, these reconciliations might help retrospectively to explain how downsizing has been, in fact, beneficial or detrimental on organizations and employees but these explanations do not provide any useful predictions about when or how these effects will occur.
In this article, in contrast, a reconciliation of the divergent perspectives is offered examining some of the underlying behavioral and psychological processes associated with downsizing organizations. First, literature supporting both sides of this debate is reviewed, showing that there exists considerable controversy concerning the merits of downsizing. Following Freeman and Cameron (1991), downsizing is defined as intended reduction in personnel. A theoretic framework is then discussed offering the possibility for a reconciliation of the debate. In this framework, interpersonal trust occupies a mediating role between actions and beliefs and resulting employee and organizational outcomes. The framework contains 12 propositions representing boundary conditions for the relationship between organizational downsizing and its outcomes.