Developing a framework for responsible downsizing through best fit: the importance of regulatory, procedural, communication and employment responsibilities

Abstract

The COVID-19 crisis has caused a wave of redundancies globally. This has brought the organisational practice of downsizing into sharp relief. Responsible downsizing is broadly understood as the actions, practices and strategies adopted by organisations to ameliorate the negative effects of redundancy. The paper draws on HR theories of best practice and best fit to explore the phenomenon of responsible downsizing, as a dominant focus in extant literature is the identification of 'responsible' best practices. In challenging these prevailing assumptions, this paper contends that responsible downsizing is more usefully understood as theoretically underpinned by a best fit approach. While there is value in adopting best practices the paper argues that greater attention should be paid to how organisational, societal and institutional contexts shape their implementation. Based on a review of 44 empirical articles, the paper advances a framework for responsible downsizing. The framework establishes four types of responsibility: regulatory, procedural, communication and employment responsibilities. Critical areas for future research are also mapped along with conceptual and practical implications.

Differential effects of corporate social responsibility on downsizing: Evidence from the United States

“…In addition, CSR also satisfies the need for security and safety of employees since firms with a strong reputation for CSR generally exhibit cooperative rather than opportunistic behavior (i.e., downsizing) across a number of stakeholder relationships (Bauman & Skitka, 2012) what could also generate long-term benefits for firm. Noteworthy, as suggested recently by McLachlan (2021), firms should adopt responsible forms of downsizing due to its heightened relevance in the context of the COVID crisis. Therefore, downsizing features should be defined in firms' CSR strategies.…”

The Impact of Downsizing on Employee Loyalty

“…Employees may feel furious, impatient, vulnerable, rejected, and helpless, which can transfer to their families and cause long-term distress, (Mujtaba and Senathip, 2020). McLachlan (2022) states that businesses should prioritize how practices align with different kinds of accountability in diverse circumstances and concentrate on how organizational, societal, and institutional variables influence the adoption of best practices. Contextual conditions are useful here because different roles reflect deeply rooted attitudes, customs, and beliefs that help businesses comprehend downsizing practices and their drawbacks.…”

Human resource management in recession: Restructuring and alternatives to downsizing in times of crisis

“…The emphasis is upon avoiding knee jerk redundancies, and downsizing is instead viewed as something to mitigated—or considered a last resort—in response to challenging economic conditions (Cascio, 2002; Pfeffer, 1998; Rogovsky et al., 2005). Discussions, especially in the European literature, also stress the importance of a fair process of restructuring, as well as measures to ameliorate the negative impact of job loss and support displaced workers back into the labour market (Ahlstrand, 2010; Bergström, 2007; Bosch, 2009; Forde et al., 2009; Hansen, 2009; McLachlan, 2021; Papadakis, 2010; Rydell & Wigblad, 2011).…”