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The Structural Consequences of Downsizing

Author

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  • Rocki-Lee DeWitt

    (Smeal College of Business, Pennsylvania State University, Department of Management and Organization, 415 Beam, University Park, Pennsylvania 16802)

Abstract

This paper examines the impact of downsizing strategy on dimensions and types of organizational structure. Four downsizing strategies are developed to address organization and environment decline. Understanding where and how these strategies modify an organization's activities helps clarity how downsizing impacts organization structure. Propositions are offered that show how downsizing can result in both mechanistic and organic shifts in organization structure.Mechanistic shifts are caused by downsizing strategies that increase the domain of an organization and the structural processes used to support that domain. Organic shifts are caused by downsizing strategies that decrease the domain of an organization and the structural processes used to support that domain. The rationale provided for these shifts offers a strategic explanation for decreases in administrative intensity that lag decreases in organization size. Propositions about the impact of downsizing on organizational structure are offered as a stimulus to further thought and research.

Suggested Citation

  • Rocki-Lee DeWitt, 1993. "The Structural Consequences of Downsizing," Organization Science, INFORMS, vol. 4(1), pages 30-40, February.
    • Handle: RePEc:inm:ororsc:v:4:y:1993:i:1:p:30-40
    DOI: 10.1287/orsc.4.1.30
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    Citations

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    Cited by:

    1. McKinley, William & Ponemon, Lawrence A. & Schick, Allen G., 1996. "Auditors' perceptions of client firms: The stigma of decline and the stigma of growth," Accounting, Organizations and Society, Elsevier, vol. 21(2-3), pages 193-213.
    2. Lars Schweizer & Andreas Nienhaus, 2017. "Corporate distress and turnaround: integrating the literature and directing future research," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 3-47, June.
    3. Abraham Carmeli & Zachary Sheaffer, 2009. "How Leadership Characteristics Affect Organizational Decline and Downsizing," Journal of Business Ethics, Springer, vol. 86(3), pages 363-378, May.
    4. Sunil J. Ramlall & Saleh Al-Sabaan & Samia Magbool, 2014. "Layoffs, Coping, and Commitment: Impact of Layoffs on Employees and Strategies Used in Coping with Layoffs," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 5(2), pages 25-30, May.
    5. Royston Greenwood & Amalia Magán Díaz & Stan Xiao Li & José Céspedes Lorente, 2010. "The Multiplicity of Institutional Logics and the Heterogeneity of Organizational Responses," Organization Science, INFORMS, vol. 21(2), pages 521-539, April.
    6. Frederic Läger & Yassin Denis Bouzzine & Rainer Lueg, 2022. "The relationship between firm complexity and corporate social responsibility: International evidence from 2010–2019," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(3), pages 549-560, May.
    7. Ekin Alakent & Seung‐Hyun Lee, 2010. "Do Institutionalized Traditions Matter During Crisis? Employee Downsizing in Korean Manufacturing Organizations," Journal of Management Studies, Wiley Blackwell, vol. 47(3), pages 509-532, May.
    8. Alain Pinsonneault & Kenneth L. Kraemer, 2002. "Exploring the Role of Information Technology in Organizational Downsizing: A Tale of Two American Cities," Organization Science, INFORMS, vol. 13(2), pages 191-208, April.
    9. Saxena, Richa, 2006. "Methods for the Study of Downsizing: A Review," IIMA Working Papers WP2006-12-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    10. Jody Hoffer Gittell & Kim Cameron & Sandy Lim & Victor Rivas, 2005. "Relationships, Layoffs, and Organizational Resilience: Airline Industry Responses to September 11," EERI Research Paper Series EERI_RP_2005_06, Economics and Econometrics Research Institute (EERI), Brussels.
    11. Krzysztof Cybulski, 2016. "Determinants and Consequences of Involuntary Turnover of Sales Personnel (Uwarunkowania oraz konsekwencje wymuszonej fluktuacji sprzedawcow)," Research Reports, University of Warsaw, Faculty of Management, vol. 2(22), pages 194-200.
    12. Saodah Wok, 2017. "The Effects of Organizational Change on Students' Emotions," GATR Journals gjbssr485, Global Academy of Training and Research (GATR) Enterprise.
    13. Art Budros, 1999. "A Conceptual Framework for Analyzing Why Organizations Downsize," Organization Science, INFORMS, vol. 10(1), pages 69-82, February.
    14. Muñoz-Bullón, Fernando & Sánchez-Bueno, María José, 2008. "Does downsizing improve organizational performance? An analysis of Spanish manufacturing firms," DEE - Working Papers. Business Economics. WB wb083007, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    15. Mabert, Vincent A. & Schmenner, Roger W., 1997. "Assessing the roller coaster of downsizing," Business Horizons, Elsevier, vol. 40(4), pages 45-53.
    16. Muñoz-Bullón, Fernando, 2008. "Who downsizes for longer? A longitudinal analysis," DEE - Working Papers. Business Economics. WB wb082805, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.

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    Keywords

    downsizing; decline; structure;
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