Welcome To ThePresentation

DOWNSIZING AND RESTRUCTURINNG

It is important to clarify what is meant by the word downsizing. Managers academies use it to mean a number of different activities: some example of words used as synonymous for downsizing including building down, de-hiring, de-recruitment, reduction in force, resizing etc. Downsizing activities undertaken to improve organizational efficiency, competitiveness that affect the size of the firms workforce, the cost and the work processes. Concept of Downsizing and Restructuring

CONCEPT (cont..)

Downsizing strategies to improve an organizational efficiency by reducing workforce, redesigning the work, or changing the systems of the organization. Cameron identifies three types of downsizing strategies:Workforce reduction: Short term strategy to cut the number of employees through attrition, early retirement or voluntary severance packages, and layoff or termination etc.Work designing:Medium term strategy in which organization focus on work process and assess whether specific function, products, and service should be changed or eliminated.

CONCEPT (cont..)

Systematic Change: A long term strategy that changes the organizations culture and attitudes and values of employees with the goal of reducing costs and enhancing quality. Restructuring: Any major configuration of internal administration structure that is associated with an intentional management change program.

Why Do Organization downsize? There are several reasons why organizations decide to downsize the workforce. Some of are:Declining profitsIncreased pressure from competitorsMerging with another organizationIntroduction of new technology The need to reduce operating costsThe desire to decrease levels of managementGetting rid of employee deadwood.

The Downsizing Decision: For many organization going through a downsizing is a very painful and difficult experiences. Too often organizations embark on a downsizing program without careful consideration whether there are feasible alternative to downsizing. Alternative To downsizing: some of the alternative include-Cutting non-personal costCutting personnel costProviding incentives for voluntary resignation or early retirement.

The Downsizing Decision(cont)Inplacement And Outpalcement Issues: Inplacement is reabsorbing excess or inappropriately placed workers into a restructured organization. Outplacement providing a program of counselling and job search assistance for workers who have been terminated.

The Downsizing Decision(cont..)

Planning For Downsizing: The issues involve in planning for downsizing-Determining how many employees will lose their jobDetermining who will be let goDetermining how the reduction will be carried out Determining the legal consequencesDesigning current and future work plansImplementing the decisionPerforming follow up evaluation and assessment

Survivors Reaction: There is considerable evidence that downsizing may produce a number of dysfunctional behaviors among the employees who remain with the organization. Some of these impact are Negative attitudes and behavior: in a number downsizing, employees who retain there jobs report increased job insecurity, fear, stress, and burnout. They may also experience lower self confidence, reduced job satisfaction and lower commitment to the organization.

Reduced performance capabilities: There is evidence that it is not necessarily the poor performers who leave the downsized organization. Best employees will leave, since quality workers are more attractive to other firms.Lower organizational productivity: Negative employee attitudes and behavior often result in lower productivity.Survivors Reaction(cont..)

Few studies have focused specifically on managers reactions to downsizing. The managers were trying to come to grips with what happened, attempting to figure out their new roles as change agents and mentors in new organization, and struggling to make sense of what had happened. Among the emotion that emerged were anger, anxiety , cynicism, resentment, retribution, hope.