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.. Of key people, but this material is rarely organized in a fashion that allows for its transmission to other. Employee turnover can negatively affect firm performance through loss of social capital. We expand this by taking into account the tacit knowledge that firms lose when employees leave" (p. 50). Although it is difficult to quantify the value of the tacit knowledge lost when downsizing takes place, it is reasonable to conclude that a company may be shooting itself in the foot by intentionally terminating qualified and knowledgeable employees who represent a potential asset rather than the liability reflected in the downsizing approach.
Conclusion
The research showed that the term "downsizing" as well as the more palatable term, "rightsizing," refers to the practice of companies terminating employees in an effort to become more streamlined and profitable. These terms can also refer to the elimination of redundant positions, temporary layoffs, allowing positions occupied by retiring employees or other departing employees to go unfilled, not renewing temporary work contracts and avoiding hiring workers to cover for employees who are absent for temporary periods of time. The research also showed that downsizing is not a personnel intervention to be taken lightly because the adverse impact on the company can be profound. Terminated employees are also affected in severe ways, of course, but even those who remain on the job are affected by such practices because they naturally wonder if they are next in line and may reasonably be expected to question the company's commitment to its loyal and hard-working employees. Finally, the research showed that...
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References
Bogle, J.C. (2007). Democracy in corporate America. Daedalus, 136(3), 24-25.
Borman, W.C., Hanson, M.A. & Hedge, J.W. (1997). Personnel selection. Annual Review of Psychology, 48, 299.
Capozzoli, T.K. (2003). The organizational model for workplace security. Vanderbilt Journal of Transnational Law, 36(2), 781-782.
Custard, B. (2007). Do you have career insurance? Journal of Environmental Health, 69(9), 4-5.
Behavioral Economics Many academics advocate that markets are "efficient." They argue that all stock and business information is embedded in the current price of an asset. As new information enters the market, the asset price immediately adjusts to reflect the new market sentiment. As a result of these efficient markets, investors can only hope to achieve the market rate of return given the amount of risk taken. There is very little
Unhappy workers means unproductive workers, and this is one of the most challenging aspects of successfully implementing a downsizing plan. Yet, there are some successes which can bank on how the company approaches the downsize. If the company turns towards downsizing other elements of production, employees can rest a little easier knowing that their employers are trying other strategies before massive lay offs. Ford Motor Company has made the decision
What these authors are essentially saying is that if a pre-determined set of ethical rules or practices is used to make downsizing decisions within organizations, and/or if projected (and necessarily uncertain) information about outcomes was used to inform and help make these decisions, the organization would easily if not automatically absolve itself of true moral responsibility (Clegg et al., 2007). This is because there would be an external system
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