Chapter 10 Downsizing and Restructuring Flashcards Preview

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Flashcards in Chapter 10 Downsizing and Restructuring Deck (15)
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Why do organizations downsize?

-declining profits
-business downturn
-increased pressure from competitors
-merging with another org
-intro of new technology
-the need to reduce costs
-the desire to decrease levels of management
-getting rid of employee deadwood


What is downsizing?

Strategies to improve an org's efficiency by reducing the workforce, redesigning the work, or changing the systems of the organization.


What is a survivor?

an employee remaining with an organization after downsizing


What are 3 types of downsizing strategies?

1. Workforce reduction
2. Work redesign
3. Systematic change


What negative things happen when you downsize(4)?

1. Best people leave
2. Productivity goes down
4. Workers are depressed their friends are gone
*therefore do one wave of downsizing so that employees know their jobs are secure


What do workforce reduction mean?

1. Short-term strategy
2. Attrition
3. Early retirement
4.Voluntary severance packages, and layoffs or terminations


What does work redesign mean?

1. A medium-term strategy
2. Focuses on work processes
3. Assess whether functions, products, or services should be changed or eliminated


What does systematic change mean?

1. A long term strategy
2. Change an org's culture, attitudes and values
*with the goal of reducing costs and/or enhancing quality


What are 3 downsizing alternatives?

1. Cutting nonpersonnel costs
2. Cutting personnel costs
3. Providing incentives for voluntary resignation or early retirement


What are short-term downsizing alternatives?

*up to a year or starts right away
-hiring freeze
-mandatory vacation
-reduce workweek
-reduce overtime
-reduce salaries
-facility shutdowns
-employee input for alternative cutbacks


What are medium-term downsizing alternatives?

-Extending reductions in salaries
-voluntary sabbaticals
-lending employees
-exit incentives


What is outplacement vs inplacement?

Outplacement: Providing a program of counseling and job-search assistance for workers who have been terminated
Inplacement: Reabsorbing excess or inappropriately placed workers into restructured org. - trying to hire within the organization (not always that useful)


What are survivor reactions?

1.Negative attitudes and behaviours
2.Reduced performance
3.Lower organizational productivity
4. Emotions such as anger, anxiety, resentment, hope


What are 3 perceptions of Justice?

1. Procedural justice - procedures or rules used to determine which employees will be down-sized
2. Interactional justice - the interpersonal treatment employees receive during the implementation of the downsizing decision
3. Distributive justice - the fairness of the downsizing decision


What are 6 best practices of downsizing?

1. Downsizing should be initiated from the top
2. Workforce reduction must be selective in application and long-term in emphasis
3. Special attention should be paid to both those who lose their jobs and to the survivors who remain in the organization
4. Decision-makers should identify where inefficiencies and costs exist
5. Should result in the formation of small, autonomous organizations within the broader organization
6. Must be proactive strategy focused on increasing performance.