IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2018i5p48-72.html
   My bibliography  Save this article

Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)

Author

Listed:
  • Newman - Wadesango

    (University of Limpopo)

  • Gwangwadza D.C.

    (Midlands State University)

  • Charity Mhaka

    (Midlands State University)

  • Ongayi Wadesango

    (University of Limpopo)

Abstract

The objective of the study was to determine the influence of employing labour force reduction initiatives on financial performance of manufacturing companies. The researchers adopted a quantitative methodology. Primary data was collected from the total target population through questionnaires. A census was used to ensure that there was no bias and that findings could be generalised to the entire organisation with accuracy. The first major finding was that manufacturing companies in this developing country use layoffs, furloughs, outsourcing and delayering as labour force reduction methods. The second finding was that employees had adverse emotional reactions after labour force reduction initiatives, however, the emotions did not manifest to physical reactions such as strikes and employee turnover. The final finding was that labour force reduction is positively related to financial performance as measured by Return on Total Assets (ROTA). This research will enable organisation seeking to implement labour force reduction measures to critically assess method, effects and factors to consider before selecting a method best suited for their organisation. The study will add to literature on labour force reduction and performance of an organisation. The research will assist future students researching on labour force reduction as well as academics.

Suggested Citation

  • Newman - Wadesango & Gwangwadza D.C. & Charity Mhaka & Ongayi Wadesango, 2018. "Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 48-72, OCTOBER.
    • Handle: RePEc:dug:actaec:y:2018:i:5:p:48-72
    as

    Download full text from publisher

    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/4846/4581
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Deepak K. Datta & Dynah A. Basuil, 2015. "Does Employee Downsizing Really Work?," Management for Professionals, in: Maike Andresen & Christian Nowak (ed.), Human Resource Management Practices, edition 127, pages 197-221, Springer.
    2. Jyh-Jer Ko & Ying-Jung Yeh, 2013. "Worker Satisfaction Following Employment Restructuring: Effects of Nonstandard Workers and Downsizing on Job Satisfaction in Taiwan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 110(2), pages 453-467, January.
    3. Charles P. Cullinan & Xiaochuan Zheng, 2017. "Accounting outsourcing and audit lag," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 32(3), pages 276-294, March.
    4. Zorn, Michelle L. & Norman, Patricia M. & Butler, Frank C. & Bhussar, Manjot S., 2017. "Cure or curse: Does downsizing increase the likelihood of bankruptcy?," Journal of Business Research, Elsevier, vol. 76(C), pages 24-33.
    5. Chanchai Tangpong & Michael Abebe & Zonghui Li, 2015. "A Temporal Approach to Retrenchment and Successful Turnaround in Declining Firms," Journal of Management Studies, Wiley Blackwell, vol. 52(5), pages 647-677, July.
    6. Wadesango N & Mhaka C, 2017. "The Effectiveness of Enterprise Risk Management and Internal Audit Function on Quality of Financial Reporting in Universities," Journal of Economics and Behavioral Studies, AMH International, vol. 9(4), pages 230-241.
    7. He, Wenlong & Liu, Chong & Lu, Jiangyong & Cao, Jing, 2015. "Impacts of ISO 14001 adoption on firm performance: Evidence from China," China Economic Review, Elsevier, vol. 32(C), pages 43-56.
    8. Shah, Naimatullah & Irani, Zahir & Sharif, Amir M., 2017. "Big data in an HR context: Exploring organizational change readiness, employee attitudes and behaviors," Journal of Business Research, Elsevier, vol. 70(C), pages 366-378.
    9. Tim Goesaert & Matthias Heinz & Stijn Vanormelingen, 2015. "Downsizing and firm performance: evidence from German firm data," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(6), pages 1443-1472.
    10. Edward G. Anderson & Kyle Lewis, 2014. "A Dynamic Model of Individual and Collective Learning Amid Disruption," Organization Science, INFORMS, vol. 25(2), pages 356-376, April.
    11. Davide Antonioli & Massimiliano Mazzanti & Sandro Montresor & Paolo Pini, 2015. "Outsourcing and Firm Productivity in a Specific Local Production System: Evidence from Reggio Emilia (Italy)," Growth and Change, Wiley Blackwell, vol. 46(2), pages 292-320, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wadesango N & Gwangwadza D C & Mhaka C & Wadesango V O, 2018. "The Impact of Labour Force Reduction on the Financial Performance of Manufacturing Companies," Journal of Economics and Behavioral Studies, AMH International, vol. 10(2), pages 20-32.
    2. Andrea Bassanini & Eve Caroli & Kevin Geay & Antoine Rebérioux, 2023. "Heavy is the Crown: CEOs' Social Interactions and Layoff Decisions," Working Papers hal-04118212, HAL.
    3. D Reshma & Sudharani R & Suresh N, 2022. "A Study on Impact of Downsizing on Profitability of Construction Industries listed in Bombay Stock Exchange (BSE) India," Papers 2207.11546, arXiv.org.
    4. Lin, Eric S. & Lin, Chia-Ling & Lin, Hui-Lin & Hsiao, Yi-Chi, 2023. "Is downsizing a good strategy during the downturn? Evidence from Taiwanese manufacturing firms," Japan and the World Economy, Elsevier, vol. 65(C).
    5. Cirillo, Alessandro & Muñoz-Bullón, Fernando & Sánchez-Bueno, María J. & Sciascia, Salvatore, 2022. "Employee downsizing and sales internationalization strategy in family firms," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    6. Zorn, Michelle L. & Norman, Patricia M. & Butler, Frank C. & Bhussar, Manjot S., 2017. "Cure or curse: Does downsizing increase the likelihood of bankruptcy?," Journal of Business Research, Elsevier, vol. 76(C), pages 24-33.
    7. Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2021. "Coping with high decline: firms’ resilience to adversity," DEM Working Papers 2021/08, Department of Economics and Management.
    8. Najda Hayajneh & Taghrid Suifan & Bader Yousef Obeidat & Mohammd Abuhashesh & Raed Kareem Kanaan, 2020. "The relationship between organizational changes and job satisfaction in the Jordanian telecommunication industry," Journal of Social Sciences (COES&RJ-JSS), , vol. 9(1), pages 1-20, January.
    9. Boratyńska, Katarzyna & Grzegorzewska, Emilia, 2018. "Bankruptcy prediction in the agribusiness sector: Lessons from quantitative and qualitative approaches," Journal of Business Research, Elsevier, vol. 89(C), pages 175-181.
    10. Anke Joubert & Matthias Murawski & Markus Bick, 2023. "Measuring the Big Data Readiness of Developing Countries – Index Development and its Application to Africa," Information Systems Frontiers, Springer, vol. 25(1), pages 327-350, February.
    11. Iwan Hermawan & Suharnomo, 2020. "The Role of Trust-Based Active Participation as a Learning M," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 32(2), pages 221-235.
    12. Maria Crescimanno & Claudio Mirabella & Valeria Borsellino & Emanuele Schimmenti & Demetris Vrontis & Salvatore Tinervia & Antonino Galati, 2023. "How Organizational Resources and Managerial Features Affect Business Performance: An Analysis in the Greek Wine Industry," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    13. Michele Preziosi & Roberto Merli & Mara D’Amico, 2016. "Why Companies Do Not Renew Their EMAS Registration? An Exploratory Research," Sustainability, MDPI, vol. 8(2), pages 1-11, February.
    14. Fareri, Silvia & Apreda, Riccardo & Mulas, Valentina & Alonso, Ruben, 2023. "The worker profiler: Assessing the digital skill gaps for enhancing energy efficiency in manufacturing," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    15. Ray Qing Cao & Dara G. Schniederjans & Vicky Ching Gu, 2021. "Stakeholder sentiment in service supply chains: big data meets agenda-setting theory," Service Business, Springer;Pan-Pacific Business Association, vol. 15(1), pages 151-175, March.
    16. Matthias Fahn & Nicolas Klein, 2019. "Relational Contracts with Private Information on the Future Value of the Relationship: The Upside of Implicit Downsizing Costs," American Economic Journal: Microeconomics, American Economic Association, vol. 11(4), pages 33-58, November.
    17. Maximilian Weis & Patricia Klarner, 2022. "A CEO’s Future Temporal Depth and Organizational Resilience," Schmalenbach Journal of Business Research, Springer, vol. 74(4), pages 659-693, December.
    18. Cotes, Jorge & Ugarte, Sebastian M., 2021. "A systemic and strategic approach for training needs analysis for the International Bank," Journal of Business Research, Elsevier, vol. 127(C), pages 464-473.
    19. Calza, Elisa & Goedhuys, Micheline, 2018. "Domestic quality certification and growth of Vietnamese MSMEs," MERIT Working Papers 2018-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    20. Yu Zhao & Huaming Du & Qing Li & Fuzhen Zhuang & Ji Liu & Gang Kou, 2022. "A Comprehensive Survey on Enterprise Financial Risk Analysis from Big Data Perspective," Papers 2211.14997, arXiv.org, revised May 2023.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2018:i:5:p:48-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.