LEIDY JOHANNA ANGEL HERRERA. Updated 26 October Transcript. BENCHMARKING,DOWNSIZING Y RIGHTSIZING. Right-sizing, downsizing and improving the employee and employer In my experience, the following four considerations will set you and your. Downsizing, Rightsizing or Dumbsizing?: Quality and Human ÔÇťAmerican mana gement adopted quality concepts in order to cut costs and regain. international.

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Top managers with responsibility for making downsizing decisions are in a difficult predicament. As a major trend among U. Type the code shown: The jobs and responsibilities that are not considered part of the primary revenue-generating functions are the ones that are frequently downsized.

Reports of executive salaries growing in the face of downsizing and stagnant wages for retained employees only fan the flames of this criticism. Downsizings such as these are also commonly called reorganizing, reengineering, restructuring, or rightsizing.

DOWNSIZING Y RIGHTSIZING by Ronal grajales gronal83 on Prezi

Revised by Scott B. Downsizing and reengineering programs may result from the implementation of new, labor-saving technology. Companies in these industries, like those in the auto industry, suffered from higher per-unit costs and greater overhead than their Japanese counterparts due to lower labor productivity and a glut of white-collar workers in many U.

Labor groups have reacted to the frequency and magnitude of downsizing, and unions have taken tougher stances in negotiations because of it. Harper Business Rightsizingg, A Manifesto for Business Revolution.

Since dense bureaucracy frequently causes delays in communication and decision-making, the reduction of bureaucracy may help bring about a more efficient and responsive corporate structure that can implement new ideas more quickly. This includes taking the time to allow dismissed employees to air their thoughts, instead of laying them off quickly and impersonally, and providing assistance in finding new jobs. It is not uncommon for a company’s stock value to rise following a downsizing announcement.


Eliminating non-core aspects of a business may also include the reduction of bureaucracy and the number of corporate layers. They reason that without downsizing, companies would not remain profitable and hence would go bankrupt when there is fierce competition and slow growth.

Furthermore, some downslzing suggest that companies can improve their efficiency, productivity, and competitiveness through quality initiatives such as Six Sigma, empowering rihhtsizing through progressive human resource strategies that encourage employee loyalty and stability, and other such techniques.

Since companies frequently lose a significant amount of employees when downsizing, they usually must reallocate tasks and responsibilities. Hence, these efforts frequently have mixed results. The seminal work on restructuring or reengineering, Reinventing the Corporation, by Michael Hammer and James Champy, characterizes the process as the “fundamental downaizing and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed.

Department of Labor, Bureau of Labor Statistics. In other words, despite the admitted discomfort and difficulties that downsizing has on displaced workers, some workers are able to dkwnsizing new jobs and companies are able to achieve greater efficiency, competitiveness, and profitability.

Moreover, downsizing can lead to additional problems, such as poor customer service, low employee morale, and bad employee attitudes.

Unemployed Workers by Month Adapted from: Table 1 compares the number of temporarily rigghtsizing workers with the number of permanently downsized workers. Hammer, Michael, and James Champy.


To remedy these problems, U. Employees who are laid off tend to suffer from depression, anxiety, insomnia, high blood pressure, marital discord, and a host of other problems. For example, governments must sometimes enact programs to help displaced workers obtain training and receive job placement assistance. The Lull Will Linger. Occupations with the Largest Job Decline, Suggested alternatives to downsizing include early retirement packages and voluntary severance programs.

Unemployed Persons by Reason of Unemployment. By promoting employee initiative and even employee involvement in decision-making, managers can help restore employee trust and commitment and help increase employee motivation.


Downsizing is certainly not limited to the U. The major industries affected by this stiffer competition included the automotive, electronics, machine tool, and steel industries. Auto workers were among the first to be laid off during the initial wave of downsizing.

Analysts of downsized companies argue that managers should downxizing steps immediately after workforce reductions to provide the remaining workers with the support and guidance they need. In contrast, announcements of downsizing are well received in the stock markets. Table 1 Number of U. Some studies have indicated that the economic advantages of downsizing have failed to come about in many cases, and that downsizing may have had a negative impact on company competitiveness and profitability in some cases.

Downsizing refers to the permanent reduction of a company’s workforce and is generally associated with corporate reorganization, or creating a “leaner, meaner” company.


Comment about this article, ask questions, or add new information about this topic: This process also enables companies with growing competitive advantages to maintain their positions in the market in the face of greater domestic and global competition, and it is the difficult but necessary result of the transition toward a global economy. Economists point out that despite the downsizing that has become commonplace since the s, overall U. However, economists remain optimistic about downsizing and the effects of downsizing on the economy when the rate of overall job growth outpaces the rate of job elimination.

Corporate downsizing results from both poor economic conditions and company decisions to eliminate jobs in order to cut costs and maintain or achieve specific levels of profitability.