Downsizing the Company

Unit 8: Downsizing the Company

Kaplan University

School of Business

MT460 Management Policy and Strategy

Professor: Dr. Nathan Boyer

Date: February 3, 2014

Downsizing the Company

How companies implement their downsizing has a significant effect on their success. As companies seek ways to reduce costs, such as downsizing, managers must factor in opportunities to improve communication internally so that everyone who is affected can be kept aware of what is going on. In order for companies to be successful in downsizing, three factors are vital to the company’s success: (1) organizations must become more flexible; (2) they must become more innovative and creative; and (3) they must improve their communications with stakeholders who are increasingly skeptical off downsizing efforts (Mishra, Mishra & Spreitzer, 2009, pp. 39-44).

As part of the four stages of downsizing, the company must first make the decision to downsize. In my previous employment of working for an insurance company; the manager was faced with a challenge of survival of intense competition amongst rival insurance companies that had been in the business a lot longer. By making the decision to reevaluate the business and the processes, she had made the decision that downsizing was the overall best decision for the company.

As the second stage of downsizing comes into play, planning the downsizing program becomes very crucial to the company, its employees and shareholders. Keeping the lines of communication open and often is extremely important during the downsizing of a company in order for the morale to remain positive amongst employees. Communicating the company’s financial situation will keep employees aware of what is going on and what they can contribute to help the company be prepared for the downsizing. To minimize the shock and anxiety that may be associated with the decision to downsize, allowing the employees to initiate programs to reduce expenses and...