Discuss the development of research into downsizing process in the organisations and a survivor syndrome.

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Resourcing and talent management

Department: HRM, OB and Tourism Management

Module Code: MOD001215


Introduction

The purpose of this summary brief is to examine theories and ideas about the downsizing envoys carrying out their role during the redundancy process. In addition, it is also going to discuss the development of research into downsizing process in the organisations and a survivor syndrome.

Discussion

Companies all around the world have faced economic downturn. In order to survive, companies are forced to cut their costs, e.g., by decreasing their staff. This fact has gained the significant attention of many academics who researched different factors influencing employees and company.

Organisations that want to reorganise or restructure their business by cost-cutting through reduction of work-force, or reorganising upper-level management run to downsizing or redundancy process. The term downsizing is replaced by ‘rightsizing’ because it sounds less drastic. In the UK the term ‘redundancy’ is defined by law as a situation in which, for economic reasons, there is no longer a need for the job in question to be carried out (Taylor, 2010). Downsizing uses the purposeful loss of people from the workforce to achieve a variety of business objectives, and may combine redundancy, early retirement, outsourcing and attrition (Wolfe, 2004). Rightsizing is an unwanted and inescapable within all sectors of business. From one hand downsizing is traumatic and tense process for employees who are going to be redundant (victims). From the other hand it makes an influence on the remaining (survivors).  However it is possible to reduce the negative effects of redundancy by managing the whole process with correct and delicate approach to ‘victims’ and ‘survivors’. Five major causes for implementing downsizing programme:

  • Cost reduction
  • Productivity improvement
  • Responding to competitive threats
  • Consolidation after a merger or acquisition
  • Increasing efficiency (Niendstedt, 1989).

Everyone can react differently on cutbacks and it may also depend on how the process was handled by the organisation. The graph below presents several behavioural consequences that survivors might experience:

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Graph 1.1.

Typical survivor and organisational outcomes of redundancy (Source: adapted from Appelbaum & Donia, 2001).

Every organisation passing through cutbacks has its own agents or messengers called envoys – ‘people who break news of redundancy to their colleagues’ (Ashman, 2012). It is generally considered that the role of envoy is emotionally demanding. Envoys’ role does not have negative effects on health, however as a research has shown that many envoys acknowledged that they drank more alcohol during downsizing activities (Ashman, 2012). Majority admitted that the closer their relationships with the victims the more pressured role ...

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