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Downsizing: Trends and Impacts

Downsizing is the planned elimination of positions or jobs within an organization (Kets de Vries & Balazs, 1997, p. 11). While relatively recent in origin, downsizing has become a pervasive business practice among large troubled corporations. Starting with factory closures in sunset industries during the recession of the early-1980s and continuing as an after-effect of merger and acquisition mania, downsizing, according to its proponents, "has turned into one of the inevitable outcomes of living in a global world where continual adjustments to products, services, and the price of labor are needed to remain competitive" (Kets de Vries & Balazs, 1997, p. 11).

During the 1990s, almost all of Fortune 1000 firms have engaged in downsizing (Kets de Vries & Balazs, 1997, p. 11). Further, the trend appears to be continuing, and many analysts contend that "developments in management indicate that downsizing is here to stay. A major contributing factor has been the increasing popularity of global benchmarking. Finding one's overhead costs wanting compared to not only domestic but also international competitors has turned into a convincing argument to take large numbers of employees off the payroll" (Kets de Vries & Balazs, 1997, p. 11). Another reason for the continued introduction of downsizing practices is the administrative impact of the revolutionary transformation in information and communication technology. Changes in such technologies have led to a growing redundancy of the "traditional, go-between role of middle managementùa group of people previously preoccupied with collecting, analyzing, and transmitting information up and down the hierarchy. Last, but certainly not least, downsizing is sometimes the price paid for strategic errors made by top managementùthe erroneous interpretation of market trends, for example" (Kets de Vries & Balazs, 1997, p. 11). All that being stated by the proponents of downsizing, however, the dr...

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Downsizing: Trends and Impacts. (1969, December 31). In LotsofEssays.com. Retrieved 22:41, March 18, 2024, from https://www.lotsofessays.com/viewpaper/1693820.html