Corporate Downsizing. Downsizing Articles Downsizing Kim, Wang-Bae

¶ … corporate downsizing. Downsizing Articles Downsizing Kim, Wang-Bae (2003). Economic Crisis, Downsizing and "Layoff Survivor's Syndrome"; Journal of Contemporary Asia, Vol. 33, 2003 This article empirically examines the effects of downsizing on layoff survivors in South Korea to determine if any of the unintended negative consequences of economic restructuring are present.

While studies at the macro level on the downsizing that has occurred since the 1997 economic crisis has highlighted changes to the labor market, governmental policies, labor movement, and the flow of foreign capital, research into the socio-psychological impact of downsizing on South Korea using an empirical approach is quite infrequent. This study adopts the broad hypothesis that layoff survivors' perceptions of a past downsizing influence their mental health, but seeks to identify specific factors that affect negatively on survivors' well-being.

Layoff survivors' perceptions are evaluated in two key aspects: attitudes toward working conditions and attitudes toward the downsizing process itself. To capture changes in perceptions, the survey asks for layoff survivors' opinions before and after the downsizing. The respondents to the survey were recruited from layoff survivors in various companies that have been downsized in the several years since the financial crisis. The firms include chaebols and large companies, medium-sized companies, and banks. The total sample size for the survey was 980.

Out of this sample, workers in large companies (those with 1,000 or greater employees) represent 47.9%, those in companies with 300-999 employees represent 35.1%, and those in companies with less than 300 workers total 17.0%. Males composed 83.4% of the sample. Males in their 30s were the most numerous in the sample, representing 51.1% of total respondents. Clerical workers constituted 60.2% of the sample. As for marital status, 68.9% of the total sample was married. The sampling method employed was stratification sampling.

For survey questions, a five-point Likert scale was primarily used, with 5 = very positive, except for mental health questions with 4 point. The findings shown show that while perceptions about job autonomy, workload, job security, and leadership have a significantly positive influence on self-confidence as a sub-category of mental health, conflict among coworkers has a negative correlation. In this survey, perceptions of job autonomy and security and conflict among coworkers have a coefficient with anxiety/depression, and a positive perception of company leadership contributes to declining anxiety/depression.

It has been said that anxiety/depression are considerably influenced by perceptions of job security. However, the present study reveals that anxiety/depression are the result of other factors as well, including low job autonomy, conflict among co-workers, and the leadership of the CEO during downsizing. In the case of self-confidence, job autonomy, conflict among coworkers, and perception of fairness are related as well.

In terms of subjective assessment of health status (Vitality), higher job autonomy, job security and fairness all contribute to a higher assessment, while conflict among coworkers has a negative influence. Anxiety/depression are negatively influenced by job autonomy, while there is no impact by the fairness of downsizing. Appelbaum, Steven H. And Nadia Labib. Strategic Downsizing: A Human Resources Perspective,; Human Resource Planning, Vol.

16, 1993 This paper addresses downsizing as a "problem" because, as will be seen, it is a painful process for all stakeholders, and its success or failure has major implications for all concerned. More especially concerned, are the organizations that must bear the consequences of the decision to downsize. The responsibility primarily falls on them to mitigate the negative effects on all involved.

It is of paramount importance for them to succeed in this endeavor in order to maintain a positive corporate image both locally and globally; namely, wherever they market their products and services. The purpose of this article, therefore, is to investigate the effects of current downsizing practices on all human resources and on the organization, and to propose methods by which organizations can mitigate these effects and successfully achieve their restructuring goals.

This project began with a literature search to achieve the following objectives: 1) To investigate the specific professional, psychological, and socio-economic effects of downsizing on both surviving and terminated employees (3). 2) To identify the factors that influence the extent to which the effects of downsizing are experienced by employees. 3) To develop a process model for downsizing based on findings in the literature reviewed. Once the relevant data was collected, the model to be tested was developed.

Based on the literature review and the components of the proposed model, an interview guide was developed in the form of a list of 49 questions to be used during the interviews. The free-form format of most of the questions solicited detailed information on all the elements involved in the process and structure of downsizing plans as identified in the literature search.

The interview guide was sent in advance to the Vice Presidents or Directors of the Human Resources Departments of the organizations to enable them to prepare for the interview by having the relevant information available. The data presented in this article represents the responses of these key executives to the questions posed during each case study interview session.

There are two conclusions that can be drawn from this research: (1) that downsizing, if it is unavoidable, must be undertaken in a way that would cause the least amount of pain and stress to those affected, which is the ethical responsibility of organizations to all stakeholders, and (2) that downsizing in itself is not enough to ensure increased profitability and goal attainment, but rather, it is how the organization operates after downsizing that will determine the success or failure of both the restructure and the resulting downsizing experience, and ultimately the organization's ability to achieve its human resource and strategic objectives.

Bergmann, T.J., Kenneth P. De Meuse, Catherine E. Roraff, Paul A. Vanderheiden; (2004). New Evidence regarding Organizational Downsizing and a Firm's Financial Performance: A Long-Term Analysis Journal of Managerial Issues, Vol. 16. The primary purpose of this study is to systematically examine the relationship between the strategy of downsizing and financial performance over an extended period. A secondary objective is to investigate the magnitude and frequency of downsizing and its impact on various financial indicators. In the following section, we examine the theoretical basis for organizational downsizing and propose three hypotheses.

In the Methodology section, we describe the sample, define the variables employed in the study and how they were measured, and present the statistical techniques used to test the hypotheses. The final two sections present the results of the analyses and discuss the implications of this study. The hypotheses were as follows: 1.