I have the reference I mentioned in the LO forum, and having reread it, I
was overly generous in my description of when downsizing worked. The
reference is "Downsizing: What do we know? What have we learned?" by
Wayne Cascio, U of Colorado in Academy of Management Executive, 1993 Vol.
7, No. 1.
As you stated, downsizing by and large leads to -- more downsizing.
Nothing more, nothing less. In general, it says, that cost-savings don't
materialize, and productivity gains do not occur. You can read the
excruciating details at your leisure.
However, among firms where productivity went up after downsizing (the
author says "productivity went up as a result of downsizing," but I think
he is just guessing about that) certain characteristics seemed common.
These are,
Downsizing is implemented by command from the top, but with
recommendations from lower-level employees, based on job and task analyses
of how work is organized.
Special attention is paid to employees who lost their jobs and to those
who did not (survivor syndrome). There are strategies to help all
employees deal with the loss.
Firms identify clearly where redundancy, excess cost, and inefficiency
exist, and they attack those areas specifically. Objective data drives
decisions. It is not arbitrary. Suppliers are partners and potential
targets of their downsizing efforts.
Dowsizing is viewed as an aggressive strategy to enhance competitiveness.
The data cited in this article is not particularly satisfying. It has
been a while since I read it, and my memory was more concrete than the
article now appears to me.
It is interesting that the major reason given for down-sizing is the
amount of overhead in American companies compared to their international
competition -- 27% of costs in the US, 22% in Germany, and 18% in Japan.
Those differences are astounding.
Good reading.
-- Rol Fessenden LL Bean, Inc 76234.3636@compuserve.com