Essay on Downsizing: Fiduciary and Great Harm
The Concerns About Downsizing Management Essay
Corporate restructuring has become a global phenomena. Whatever be the driving force for restructuring, growth, maturity, decline, merger,' acquisition, alliances; changes in ownership, technology, products, processes, materials, customer preferences, etc. the short-term implication for employees is downsizing. Starcher (1999) identifies the following five paradoxes facing business in this context:
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According to the article by Franco Gandolfi and Craig Littler (2012), this third phase involves coming up with the long-term cost-cutting measures. This happens when the business registers a downfall for a period exceeding one year. According to this article, this phase is characterized by an increased decline in both the projected and current demands by the customers. This phase requires long-term adjustments in expenditures if the firm is to survive this volatile business conditions. It is in this phase that downsizing at times becomes inevitable. According to the article, the company must try to avoid mass layoffs by all measures. In case a company engages in massive layoffs, then it must adopt strategies that will instill commitment and loyalty of the remaining workforce.
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If a company which was producing 1000 units with 100 persons is not able to do so with just 80 persons, it can be said that the company has downsized its manpower and improved its productivity. Doing more with less is denominator management. It will increase productivity but not necessarily result in growth. If the same company is able to produce 2000 units with 150 persons it has done both denominator and numerator management. It achieved both growth and productivity.
The Case Against Layoffs: They Often Backfire
Downsizing or rightsizing is an expression used to describe the strategy of achieving competitiveness through reduction of workforce. Optimal utilization of resource is a sustainable proposition, both economically and socially. Low unit labour costs are an important consideration in attracting investment and generating more jobs, and thus contribute to the reduction of unemployment and poverty.