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Downsizing failures: an examination of convergence/reorientation and antecedents – processes – outcomes

Steven H. Appelbaum (Faculty of Commerce & Administration, Concordia University, Montreal, Canada)
Dawn Henson (Faculty of Commerce & Administration, Concordia University, Montreal, Quebec, Canada)
Kerry Knee (Faculty of Commerce & Administration, Concordia University, Montreal, Canada)

Management Decision

ISSN: 0025-1747

Article publication date: 1 August 1999

3252

Abstract

Examines varied empirical studies on downsizing which have revealed that, as a result of its aftermath, high percentages of companies have judged these efforts as unsuccessful. Corporate restructuring encompasses multiple forms of change, which are classified into three distinct categories: portfolio, financial and organizational. An analysis of the Freeman and Cameron theoretical framework on downsizing implementation processes is examined in terms of where the process occurs, during periods either of convergence and/or of reorientation, and the results associated with each approach. A case study of the Kansas Department of Health and Environment revealed that restructuring did not provide visible improvements in efficiency, economy and responsiveness. Cultural impact of this intervention revealed negative intergroup reactions, i.e. denial, dissatisfaction. An analysis of Richard Johnson’s model of the antecedents, processes and outcomes of downsizing revealed the impact upon strategy, productivity, human resources and finance. Interrelationships suggested diminished performances of firms which downsized without a lucid blueprint, adversely impacting upon these businesses. Finally, 30 recommendations are given for the human resource executive for effective downsizing, focusing upon: approach, involvement, leadership, communication, preparation, support, cost cutting, measurement, and implementation.

Keywords

Citation

Appelbaum, S.H., Henson, D. and Knee, K. (1999), "Downsizing failures: an examination of convergence/reorientation and antecedents – processes – outcomes", Management Decision, Vol. 37 No. 6, pp. 473-490. https://doi.org/10.1108/00251749910277961

Publisher

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MCB UP Ltd

Copyright © 1999, MCB UP Limited

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