Effects of process and product‐oriented innovations on employee downsizing

Abstract

Purpose -The purpose of this paper is to examine the role played by different types of firm innovation on employee downsizing. Drawing on economic and management views, the authors aims to assess the potential positive or negative effect of different types of processes (i.e. new technology via the introduction of new equipment as well as new methods of organizing the workforce) and product (i.e. number of innovations) innovations on employee downsizing. Design/methodology/approach -The empirical setting is a sample of Spanish manufacturing firms over the period 1994-2006. The authors employ probit models for panel data as an empirical tool. Findings -The results show a negative and significant effect of process innovations associated with acquiring and deploying new production equipment and product-oriented innovations on the probability of carrying out important reductions in workforce. However, a positive and significant effect is found when process innovations are linked to the adoption of new methods of organizing the workforce. Practical implications -Managers might play a significant role in employment creation, especially when they carry out process innovations related to the acquisition of complementary production assets (i.e. new equipment) and market highly innovative products. Policy makers might contribute to diminish the potential number of employees affected by firms' downsizing strategies by designing, for example, public subsidies systems that deliberately prompt both types of innovations. Originality/value -The authors make an effort to provide alternative explanations about why firms downsize, as they analyze different types of process and product innovations whose effects on employment (and, thus, downsizing) do not seem to be clear. Moreover, the paper furthers one's understanding of the effect of firm innovation by focusing on the potential effect of one type of process innovation which has not been examined until now: the adoption and implementation of new methods of organizing the workforce owing to new technology.

Exploring the exporting-downsizing link: Does the type of export strategy and firm efficiency in foreign markets matter?

“…Finally, in line with previous research, our findings also suggest that there are other significant environmental (e.g., Ahmadjian & Robinson, 2001;Budros, 1997Budros, , 2000Muñoz-Bullón & Sánchez-Bueno, 2014) and organizational factors (e.g., Gittell et al, 2006;Muñoz-Bullón & Sánchez-Bueno, 2014;Vicente-Lorente & Zúñiga-Vicente, 2012) that may inhibit or facilitate employee downsizing.…”

“…Moreover, it is consistent with many prior empirical studies suggesting that this cut-off value can reasonably distinguish between planned (or intentional) downsizing and significant workforce cutbacks and other temporary and reactive reductions in employment (e.g., Ahmadjian & Robbins, 2005;Ahmadjian & Robinson, 2001;Cascio, Young, & Morris 1997;Freeman & Cameron, 1993;Guthrie & Datta, 2008;Mellahi & Wilkinson, 2010a, 2010bVicente-Lorente & Zúñiga-Vicente, 2012. Given the dummy nature of the dependent variable, the empirical models developed to test our hypotheses were estimated using a randomeffects panel data probit estimator (see Section 3.3 below).…”

“…The results of these additional robustness tests are reported in Table 3. Model 1 shows the results using 20% cut-off values for computing our dependent variable -the use of different thresholds is the same procedure used in previous studies on downsizing for testing the robustness of our findings (e.g., Ahmadjian & Robbins, 2005;Ahmadjian & Robinson, 2001;Cascio et al, 1997;Freeman & Cameron, 1993;Guthrie & Datta, 2008;Mellahi & Wilkinson, 2010a, 2010bVicente-Lorente & Zúñiga-Vicente, 2012. Similar results are obtained independently of the threshold considered.…”

Does transformational, ambidextrous, transactional leadership promote employee creativity? Mediating effects of empowerment and promotion focus

“…In an era of rapid advances in science and technology and fierce competition, organizational creativity has become a key factor in an organization’s ability to survive. If organizational creativity can be improved, so will its competitiveness and performance (Bucci et al , 2014; Tubadji and Nijkamp, 2014; Vicente‐Lorente and Zúñiga‐Vicente, 2012). The best way to improve organizational creativity is to rely on employee creativity (Camelo et al , 2010; Choi and Ji-Hye, 2014; Kyvik et al , 2012; Maria and Maria, 2013).…”

Family Control, Political Risk and Employment Security: A Cross‐National Study

“…To measure employment security for each firm, we created several employment reduction variables that capture both the existence of a reduction as well as the severity of a reduction in a firm's employment levels. An employment reduction is defined as a percentage decrease in the number of employees for company i from country c between time t and t−1 (e.g., Sanchez-Bueno et al, 2020;Vicente-Lorente and Zuñiga-Vicente, 2012). Specifically, we calculated this in two ways.…”