Corporate Downsizing



Corporate Downsizing

Organizations in every segment of business, industry, government, and education are downsizing. Downsizing is and has been a controversial phenomenon in the last few years. The controversy that surrounds downsizing may be better described as a debate in organizational theory about whether change is adaptive or disruptive. The issues which
establish the outcome of the controversy include why the downsizing is taking affect, how it is implemented, and what steps are taken to enhance its effects on organizational performance.
The reasons for corporate downsizing are presented in many forms. Some companies downsize due to technological changes such as automation, which brings about the need for a reduction in the production workforce. Others may feel that competitiveness with other companies warrants the need for a reduction in the workforce. Financial setbacks due to customer demand, market shares, and loss of revenue could also initiate the need for downsizing.
When will it end? Experts say it won\'t. For instance, the North American Free Trade Agreement (NAFTA) was established as a universal trade agreement between the US, Cannada, and Mexico to allow free imports and exports. It was also established with the intent to help poor countries, like Mexico, export their products for economic reasons. In my opinion, it has strongly contributed to America\'s massive downsizing phenomenon. Companies that have experienced financial setbacks and losses seem to relish the idea that they can downsize the workforce here in the states, move operations into places like Mexico, hire cheap labor, and export their product back to the states, while making bigger profits. The sad part about this is that it is true, and NAFTA is largely responsible for this type of downsizing. Is this ethical? That remains to be seen.
The truth is that unless an organization
was designed expressly for the purpose,
it is not in business to provide
employment. Jobs are the by-product of
successful organizational endeavors, not
their intended output.
If the decision to downsize is a response to competitive pressures, it will appear impatient or premature to those who must leave. If it is perceived as anything less than a well developed strategic response to demands on the organization, then it fails to show employees need for the criteria. Downsizing can sometimes seem to be about creating victims and displacing blame rather than accepting responsibility and choosing moral and ethical ways to implement the outcome. Management wants a quick cut that protects he company\'s assets, yet it wants to be gentle and compassionate to those who are let go. These two objectives are self-canceling, and to accomplish the first requires considerable compromise on the second.
Many companies wait until the day of the lay-off to inform its employees. They are concerned about sabotage and productivity. They seem to think that if they retain the bad news until the last moment that the employees will leave and the rest will get back to business. However, this method of a lay-off is the least favorable for the employees. If the company gives the employees notice of the cutback in the workforce, they will have time to plan for the financial problems, look for other work, and make other necessary arrangements to prepare them for the loss. It would be in the best interest of the company to give this notice to its workers.
Being a survivor of downsizing can have its own ethical issues. Those who are left after the downsizing has occurred, may share perceptions about the ethics of the decisions leading up to the dismissal of those who left. They may experience feelings such as anger, guilt, fear, and even depression. These feelings could be brought on by having to take up the slack and doing more work. They could also be asked to learn new tasks and for the same or maybe even less money than before the downsizing. Asking people to do more for less money can seem unfair. In my opinion, companies and organizations sometimes put too much pressure on surviving employees. This can cause the decision-makers to seem insensitive to the reality that employees are people with full lives and responsibility outside the workplace.
Call it outsourcing with a heart.
DuPont on December 11, tentatively
agreed to outsource its computer and
telecommunications operations, but it
will