Chapter 10 - Downsizing - TM

Question 1

Strategies to improve an organization’s efficiency by:

(a) reducing the workforce,
(b) redesigning the work, or
(c) changing the systems of the organization are known as

Answer 1

DOWNSIZING

Question 2

What are the 3 Downsizing Strategies?

Answer 2

(a) reducing the workforce (short term)
(b) redesigning the work (medium term), or
(c) changing the systems of the organization (long term)

Question 3

Define Workforce Reduction and its impact

Answer 3

A short-term strategy to cut the number of employees through attrition, early retirement or voluntary severance packages, and layoffs or terminations
Impact: Short-term and includes loss of valuable people

Question 4

Define Work Redesign and its impact

Answer 4

A medium-term strategy in which organizations focus on work processes and assess whether specific functions, products, and/or services should be changed or eliminated. Can be combined with workforce reduction
Impact: Takes longer to implement; gets away from concept of doing work with fewer people.

Question 5

Define Systematic Change and its impact

Answer 5

A long-term strategy that changes the organization’s culture, attitudes, and employees’ values with the goals of reducing costs and enhancing quality
Impact: Takes a long time to implement because behaviours have to change; less appealing because the are not immediate.

Question 6

What are 3 types of Restructuring

Answer 6

Portfolio, Financial and Organizational

Question 7

Changing an organizations business portfolio (i.e. the mix or percentage makeup of the organization’s businesses, divestitures, and acquisitions) is known as…

Answer 7

Portfolio Restructuring

Question 8

Financial changes to an organization, like reducing cash flows or increasing debt levels is known as…

Answer 8

Financial Restructuring

Question 9

Any major reconfiguration of an organization’s administrative structure associated with an intentional management change is known as…

Answer 9

Organizational Restructuring

Question 10

List some reasons why an organization would downsize (8).

Answer 10

Business downturn
Organizational merger
Reduce operating costs
Increased pressure from competitors
New technology
Get rid of employee “deadwood”
Decrease levels of management
Declining profits

Question 11

True or False:
Downsizing is done with the intention to cut costs for labour in the future, however, considerable evidence exists which shows that workforce reduction fails to meet its objectives

Answer 11

TRUE: According to Pfeffer: “Layoffs don’t even reliably cut costs.”

Question 12

“RCSP” stands for

Answer 12

Reputation for Corporate Social Performance

Question 13

The firm’s reputation for principles, processes, and outcomes related to the social impact of the firm’s operations is known as their…

Answer 13

Reputation for Corporate Social Performance

Question 14

There is evidence that downsizing has a [Blank] impact on an organization’s RCSP

Answer 14

Evidence that downsizing has a NEGATIVE impact on an organization’s RCSP

Question 15

List SHORT TERM Alternatives to Downsizing

FEMHRRR) (7

Answer 15

Facility shutdowns
Employee input for alternatives to cutbacks
Mandatory vacation
Hiring freeze
Reduced workweek
Reduced overtime
Reduced salaries

Question 16

List MEDIUM TERM Alternatives to Downsizing (LEEV) (4)

Answer 16

Lending employees
Exit incentives
Extending reductions in salaries
Voluntary sabbaticals

Question 17

Providing a program of counselling and job-search assistance for workers who have been terminated is known as…

Answer 17

OUTPLACEMENT

Question 18

Reabsorbing excess or inappropriately placed workers into a restructured organization is known as…

Answer 18

INPLACEMENT

Question 19

Fill in the Blanks for the 7 STEPS of Downsizing:

1. Determine [BLANK BLANK] people will lose their jobs
2. Determine [BLANK] will be let go
3. Determine [BLANK] the reduction will be carried out
4. Determine the [BLANK] consequences
5. Design current and future [BLANK] plans
6. Implement the decision
7. Perform follow-up evaluation

mid-term short answer

Answer 19

Determine how many people will lose their jobs – How? 
Who will be let go
How will the reduction be carried out
Determine the legal consequences
Design current and future work plans
Implement the decision
Perform follow-up evaluation

Question 20

Is giving advanced notice of layoffs considered to be a best practice?

Answer 20

Yes.

Question 21

a clear and direct announcement of layoff decisions is best - true or false?

Answer 21

true - AND empathetic

Question 22

anger, pain, fear, cynicism, stress, mistrust, risk aversion, overwork, fear of losing their job are all emotions felt by who?

Answer 22

Survivors of downsizing

Question 23

A description of the emotional roller coaster that survivors experience is known as…

Answer 23

Survivor Syndrome

Question 24

An employee’s expectations of continued employment and the future existence of the job is known as

Answer 24

JOB INSECURITY

Question 25

3 Types of Perceptions of Justice are:

Answer 25

PRODCEDURAL, INTERACTIONAL and DISTRIBUTIVE

Question 26

Define Procedural Justice

Answer 26

the PROCEDURES used to determine who gets let go are seen as fair

Question 27

Define Interactional Justice

Answer 27

the INTERPERSONAL treatment of the employees during the downsizing (positive, fair interactions)

Question 28

Define Distributive Justice

Answer 28

Perceived fairness of how rewards and costs are DISTRIBUTED across group members - i.e. was the layoff decision made unethically / selfishly to benefit a few while screwing over a lot?

Question 29

BEST PRACTICES OF DOWNSIZING, Fill in the Blanks:

1. Downsizing should be initiated from the [BLANK] but include involvement at all [BLANKS]
2. Workforce reduction must be selective in application and [BLANK] in emphasis
3. Special attention should be paid both to those who lose their jobs and to the [BLANKS] who remain in the organization
4. Decision makers should identify where [BLANKS] and [BLANKS] exist
5. Should result in the formation of small, semi-autonomous organizations within the broader organization
6. Must be a proactive strategy focused on increasing performance

mid-term short answer

Answer 29

1. Downsizing should be initiated from the top but include involvement at all levels
2. Workforce reduction must be selective in application and long-term in emphasis
3. Special attention should be paid both to 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, semi-autonomous organizations within the broader organization
6. Must be a proactive strategy focused on increasing performance

Question 30

(best practices) Downsizing should result in small, semi-autonomous organizations within the organization True or false?

Answer 30

true

Question 31

(best practices) Should attention only be paid to those employees who have lost their job?

related to mid-term short answer

Answer 31

no - there should also be special attention paid to those who survived the downsizing

Question 32

(best practices) Who should identify where the inefficiencies and costs exist?

Answer 32

Decision makers

Question 33

Is communication important during downsizing?

related to mid-term short answer

Answer 33

Yes - and the outcome can be negative unless:

1. Rumours are managed
2. Survivors are kept informed
3. Survivors are given new goals
4. Expectations are clarified
5. Survivors are told they are valuable
6. Time is devoted to grieving

Question 34

A commitment to HRM practices that treat people as assets (as opposed to costs) is known as

Answer 34

HIGH-INVOLVEMENT HRM