LEIDY JOHANNA ANGEL HERRERA. Updated 26 October Transcript. BENCHMARKING,DOWNSIZING Y RIGHTSIZING. Right-sizing, downsizing and improving the employee and employer In my experience, the following four considerations will set you and your. Downsizing, Rightsizing or Dumbsizing?: Quality and Human “American mana gement adopted quality concepts in order to cut costs and regain. international.

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This involves providing employees with clear indications of what is expected of them and how they can meet increased productivity goals.

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Table 1 Number of U. Consequently, downsizing is a controversial corporate practice that receives support and even praise from executives, shareholders, and some economists, and criticism from employees, unions, and community activists.

Downsizing affects most sectors of the labor market, including retail, industrial, managerial, and office jobs, impacting workers in a wide range of income levels. Downsizings such as these are also commonly called reorganizing, reengineering, restructuring, or rightsizing.

Hence, displaced workers are able find new jobs relatively easily, especially if those workers have skills that enhance the technological competence of prospective employers. In essence, restructuring efforts attempt to increase the amount of dowhsizing output relative to the amount of work input.

In contrast, announcements of downsizing are well received in the stock markets. For example, governments must sometimes enact programs to help displaced workers obtain training and receive job placement assistance.

Unemployed Persons by Reason of Unemployment. Laying workers off to improve competitiveness often fails to produce the intended results because downsizing can lead to the following unforeseen problems and difficulties:.

By promoting employee initiative and even employee involvement in decision-making, managers can help restore employee trust and commitment and help increase employee motivation. In other words, despite the admitted discomfort and difficulties that downsizing has on displaced workers, some workers are able to locate new jobs and companies are able to achieve greater efficiency, competitiveness, and profitability.


Chemical plant and rightsiznig operators. Regardless of whether downsizing is good or bad for the national economy, companies continue to downsize and the trend shows few signs of slowing down. Some studies have indicated that the economic advantages of downsizing have failed to come about in many rightiszing, and that downsizing may have had a negative impact on company competitiveness and profitability in some cases.


Since downsizing often brings about a flatter corporate structure, the flow of information and communication no longer requires the effort needed prior to restructuring.

For some sectors, this trend is projected to be particularly prevalent throughas shown in Table 2. In the twenty-first century, downsizing continued after a sharp decline in the stock market early in the century and followed by continued pressure on corporate earnings in the aftermath of the September 11,terrorist attacks.

Harper Business Publications, Dowhsizing a small percentage of this cost difference could be attributed to labor costs, however, but labor costs were among the first to be cut despite other costs associated with the general structure of the auto companies and their oversupply of middle managers and engineers. Advocates of downsizing also argue that job creation from technological advances offsets job declines from downsizing. Dosnsizing, reports used for communication between layers of the old corporate hierarchy, for example, can be eliminated.

Employees who are laid off tend to suffer from depression, anxiety, insomnia, high blood pressure, marital discord, and a host of other problems. However, economists remain optimistic about downsizing and the effects of downsizing on the economy when the rate of overall job growth outpaces the rate of job elimination.

Downsizing has repercussions that extend beyond the companies and their employees. The major industries affected by this stiffer competition included the automotive, electronics, machine tool, and steel industries. Economists argue that this process strengthens the economy and helps it grow.


Since companies frequently lose a significant amount of employees when downsizing, they usually must reallocate tasks and responsibilities. As downizing major trend among U. In other words, managers must strive to maintain or increase productivity and quality levels despite having a smaller workforce.

Companies may lay off a percentage of their doqnsizing in response to these changes: Consequently, downsizing often accompanies corporate calls for concentration on “core capabilities” or “core businesses,” which refers to the interest in focusing on the primary revenue-generating aspects of a business.

Hammer, Michael, and James Champy. Karl Heil Revised by Scott B. The jobs and responsibilities that are not considered part of the primary revenue-generating functions are the ones that are frequently downsized. Failure to downsize may result in inefficiencies, while downsizing rightsozing has a number of potentially negative effects on individuals and communities.

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Nevertheless, some companies began simply to cut their workforce without determining whether or not it was necessary and without any kind of accompanying strategy.

Because of the possible negative effects that occur after downsizing, managers may have to implement measures to counteract employee apathy, improve customer service, and restore employee trust. This process also enables companies with growing tightsizing advantages to maintain their positions in the market in the face of greater domestic and global competition, and it is the difficult but necessary result of the transition toward a global economy. Managers should confer with employees regularly to discuss performance and strategies for meeting the goals.

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