While profitability improved for a sample of 260 downscaling firms in 46 industries, productivity declined dramatically. We propose and critically examine five competing hypotheses to explain these findings: (1) learning curve effects associated with new technologies; (2) experience curve effects associated with the introduction of new products or entering new markets; (3) systemic problems within the firm; (4) unexpected loss of more productive employees, and (5) reduced commitment among remaining employees.
Legatski, T.W., Cresson, J. and Davey, A. (2000), "POST‐DOWNSCALING PRODUCTIVITY LOSSES: WHEN PROJECTED GAINS TURN TO UNEXPECTED LOSSES", Competitiveness Review, Vol. 10 No. 2, pp. 80-86. https://doi.org/10.1108/eb046401
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