An Organizational Change in Business Management

Downsizing: A Go to Organizational Change

Business 610

August 2, 2010

In these hard economic times, organizations are faced with many hard decisions. In order to make a profit, organizations have to exceed their costs substantially. When organizations are not meeting this goal, managers and leaders are tasked with finding solutions on how to cut cost without losing productivity. A popular means of cutting costs in an organization is by downsizing.

When an organization deems downsizing as the most viable solution, a well thought out plan must be adhered to and that all aspects are covered. Downsizing involves various employees and can be a very tumultuous time in the organization. It affects everyone in the social ladder; from the owner to the guy that drops the mail. “(1) Economic and institutional factors simultaneously apply opposite forces on organizational actions; (2) organizational factors such as poor performance on productivity and export create a need for headcount reductions while factors such as size, domestic ownership, government support, and unionization create social and institutional pressures that inhibit downsizing; and (3) prior experience with downsizing moderates the relationship between institutional factors and further downsizing.” (Anonymous, 2010)

The individuals that are severely affected by this organizational change are the employees who are being dismissed and the employees who remain who must now work even harder to maintain the organization’s continued success. Workforce reductions are sometimes inevitable, but the accompanying pain is not. (LeMarsch, 2010) Careful planning by senior leaders and attentive implementation by managers, with a focus on all the groups affected by the action, can speed individuals' and the organization's transition to the future state. (Lemarsch, 2010)

As a manager or leader during this downsizing period, you must first identify what positions are necessary for the organization...