Response to haar's comment? and the beat goes on: Corporate downsizing in the twenty-first century

Vanderheiden, Paul A.; Meuse, Kenneth P. De; Bergmann, Thomas

doi:10.1002/(sici)1099-050x(199923)38:3<261::aid-hrm8>3.0.co;2-r

Cited by 12 publications

(8 citation statements)

References 5 publications

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“…In the majority of studies, the relationship between downsizing and performance has been found to be statistically significant (Budros, 1999;Nixon et al, 2004;Vanderheiden et al, 1999). Consistent with previous studies (Cascio, 1998;De Meuse et al, 2004), financial performance is operationalized as return on assets (ROA) -computed as the ratio of earnings before interest, tax, depreciation and amortization divided by total assets.…”

Section: Performancesupporting

confidence: 52%

“…In fact, the majority of studies show that (mostly in the long-term) downsizing affects rather negatively the firms that have implemented it (Budros, 1999;Nixon et al, 2004;Vanderheiden et al, 1999). In the short run, it creates the illusion that decisions are being made and actions are undertaken (Cameron and Huber, 1997;De Vries and Balazs, 1996;Genasci, 1994;Glebbeek and Bax, 2004;Vanderheiden et al, 1999). In the long-term, Cascio (1993Cascio ( , 2002 showed that downsizing does not yield any performance gains.…”

Section: Downsizing Stakeholder Theory and Family-business Statusmentioning

confidence: 99%

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Downsizing and Stakeholder Orientation Among the Fortune 500: Does Family Ownership Matter?

2006

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While downsizing has been widely studied, its connection to firm ownership status and the reasons behind it are missing from extant research. We explore the relationship between downsizing and family ownership status among Fortune 500 firms. Weâ\x90£propose that family firms downsize less than non-family firms, irrespective of performance, because their relationship with employees is based on normative commitments rather than financial performance alone. We suggest that their actions are related to employee- and community-friendly policies. We find that family businesses do downsize less irrespective of financial performance considerations. However, their actions are not related to their employee- or community-friendly practices. The results raise issues related to the motivations of large multinationals toâ\x90£downsize and the drivers of their stakeholder management practices. Copyright Springer Science+Business Media, Inc. 2007downsizing, family business, performance, stakeholder orientation,

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Section: Performancesupporting

confidence: 52%

Section: Downsizing Stakeholder Theory and Family-business Statusmentioning

confidence: 99%

Downsizing and Stakeholder Orientation Among the Fortune 500: Does Family Ownership Matter?

2006

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“…While some studies suggest that firms choose to downsize in order to cut costs, and/or to improve financial performance (Espahbodi et al, 2000;Kozlowski et al, 1993;Mone, 1994) -under the assumption that firm's profitability will be increased with fewer employees (Cascio et al, 1997;Mckinley et al, 2000)-another stream of research finds that the effect of personnel reduction on profitability is non-existent or even negative. Therefore, downsizing may be inefficient and companies that downsize may be unable to financially outperform companies that maintain their employees (Mentzer, 1996;Morris et al, 1999;Vanderheiden et al, 1999). Literature has also underlined several factors which might counteract the presumed benefits of downsizing, such as employee stress, feelings of guilt and negative attitudes toward the organization among the surviving employees (Brockner et al, 1992(Brockner et al, , 1993; lack of procedural justice in the workforce reduction process (Elovainio et al, 2001); and resentment and resistance in firms which may hinder rather than help competitiveness (Cameron et al, 1991;Cameron, 1994).…”

Section: Literature Reviewmentioning

confidence: 99%

Downsizing implementation and financial performance

Muñoz‐Bullón

Sánchez-Bueno

2010

Management Decision

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In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented.

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“…The consequences of mismanaged-or undermanaged-transitions have been well documented (Morris, Cascio, & Young, 1999;Vanderheiden, DeMeuse, & Bergmann, 1999). Studies consistently show that, in the aftermath of transitions involving layoffs, survivors' attitudes about job satisfaction, job involvement, organizational commitment, and intention to remain with the organization become more negative (Brockner, 1992;Hallier & Lyon, 1996).…”

Section: Consequences Of Mismanaging Organizational Transitionmentioning

confidence: 99%

Preparing for organizational death: Proactive HR engagement in an organizational transition

Marks

Vansteenkiste

2008

Human Resource Management

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This article describes an HR team's call to action in managing an organization's transition from healthy, vibrant, and financially successful workplace to its death after being acquired. The HR team countered conventional practice in two key ways. First, despite being from the seller's side, it acted unusually early in the company's acquisition and operated proactively throughout the integration process. This constructive approach stemmed from the self‐confidence developed in the HR function over years of process improvement and culture change. Second, the HR professionals were motivated (rather than threatened) by the high stakes involved in this organizational transition. Their company—with its industry‐leading business results and a loyal, long‐tenured workforce—was slated to be closed, dismantled, and auctioned off in pieces to other firms. The HR team's mission was to help people deal with the death of their current employer and prepare for life afterward while maintaining a focus on business results. This article shows how HR helped senior leadership handle the challenge of retaining the talent needed to meet customer commitments and keep the business running while also readying people for an uncertain future with many eventual layoffs. © 2008 Wiley Periodicals, Inc.

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Response to haar's comment? and the beat goes on: Corporate downsizing in the twenty-first century

Cited by 12 publications

References 5 publications

Downsizing and Stakeholder Orientation Among the Fortune 500: Does Family Ownership Matter?

Downsizing and Stakeholder Orientation Among the Fortune 500: Does Family Ownership Matter?

Downsizing implementation and financial performance

Preparing for organizational death: Proactive HR engagement in an organizational transition

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