The Hidden Costs of Downsizing

Drzensky, Frank; Heinz, Matthias

doi:10.1111/ecoj.12216

Cited by 24 publications

(18 citation statements)

References 51 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…When the layoff occurs exogenously, the effect on the motivation of the workers vanishes. Our results are in line with Drzensky and Heinz (2014) as a business downturn is most likely to be perceived as an exogenous factor leading to downsizing. Layoffs to improve efficiency may not be understood and supported by the employees and could, at least in the short run, destroy workforce morale and undermine firm productivity.…”

Section: Resultssupporting

confidence: 89%

See 1 more Smart Citation

Downsizing and firm performance: evidence from German firm data

Goesaert¹,

Heinz²,

Vanormelingen³

2015

Ind Corp Change

Self Cite

View full text Add to dashboard Cite

This paper uses a unique dataset to study the short term effects of downsizing on operational and financial performance of large German firms. In general, productivity and profitability after downsizing are -at the best -comparable to their pre-downsizing levels. During the downsizing event, the performance even drops. Moreover we make a distinction between firms downsizing because of a business downturn and firms downsizing to increase efficiency. Especially downsizing for the latter firms appears to be unsuccessful. JEL codes: G34, L19, L25, D24

show abstract

Section: Resultssupporting

confidence: 89%

“…(Baumol, Blinder and Wolff, 2003;De Meuse and Marks, 2003;Dong and Xu, 2008). Drzensky and Heinz (2014) find proof for this so-called "survivor syndrome" using a laboratory experiment. Interestingly, survivors reduce their performance considerably after the decision to lay off a worker only if it concerns a voluntary decision of the principal.…”

Section: Resultsmentioning

confidence: 99%

Downsizing and firm performance: evidence from German firm data

Goesaert¹,

Heinz²,

Vanormelingen³

2015

Ind Corp Change

Self Cite

View full text Add to dashboard Cite

show abstract

“…The slider task is now well established as a tool for experimental economists. Since its inception, the slider task has been used to study contract law (Depoorter and Tontrup, 2012), tax compliance (Fonseca and Myles, 2012;Doerrenberg et al, 2015), cheating in the workplace (Gill et al, 2013), gender differences in competition (Gill and Prowse, 2014), tax complexity (Abeler and Jäger, 2015), outside options (Goerg et al, 2017), downsizing (Drzensky and Heinz, 2016), social enterprises (Besley and Ghatak, 2017), volunteering (Brown et al, 2013), peer pressure (Georganas et al, 2015), social insurance (Ahlquist et al, 2014), delegation (Feess et al, 2014) and creativity (Bradler et al, 2015), among others. 2 This paper describes the properties and advantages of the slider task.…”

Section: Introductionmentioning

confidence: 99%

Measuring costly effort using the slider task

Gill¹,

Prowse²

2019

Journal of Behavioral and Experimental Finance

View full text Add to dashboard Cite

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

show abstract

“…Shepherd (2017) noted that employees' zeal to complete tasks is shattered when they experience the loss of co-workers through labour force reduction especially when the memories are fresh on their mind. Drensky and Heinz (2014) emphasized that labour force reduction on its own is not sufficient to hinder employees from tackling the tasks they used to tackle before labour force reduction. Ko and Yeh (2013) also added that labour force reduction initiatives cannot scare an employee into taking on new responsibilities in the workplace.…”

Section: Production Timementioning

confidence: 99%

The Impact of Labour Force Reduction on the Financial Performance of Manufacturing Companies

Wadesango

Gwangwadza

Mhaka

et al. 2018

JEBS

View full text Add to dashboard Cite

This study attempts to corroborate the impact of labour force reduction on financial performance of manufacturing companies in a developing country. Despite the on-going use of labour force reduction, literature and research on this approach continues to yield mixed results. This desktop research was therefore conducted with the aim of determining the impact of employing labour force reduction initiatives on financial performance of manufacturing companies. The study reviews the results and findings of empirical and qualitative literature on labour force reduction by previous scholars for a period of 6 years ranging from 2012 to 2017. The phenomenon of labour force reduction has facilitated the research and studies on the area in the past six years, with researchers reaching different conclusions on the practiseâ€™s effect on organisations. This has prompted the researchers of this study to critically study labour force reduction methods, factors affecting their success, employeesâ€™ reaction to the strategy, the practise effect on productivity and the relationship between labour force reduction and organisation performance.

show abstract

The Hidden Costs of Downsizing

Cited by 24 publications

References 51 publications

Downsizing and firm performance: evidence from German firm data

Downsizing and firm performance: evidence from German firm data

Measuring costly effort using the slider task

The Impact of Labour Force Reduction on the Financial Performance of Manufacturing Companies

Contact Info

Product

Resources

About