Downsizing Literature Review Ver 2

JOHN MOLSON SCHOOL OF BUSINESS

DOWNSIZING: IMPACT ON PRODUCTIVITY AND EMERGENCE OF SURVIVOR SYNDROME
Literature Review By

ARUN KUMAR DURAIRAJ (7416008)
VINAY P PARAMANAND (7283504)
VIPUL PARTI (7246307)

10/20/2014

ABSTRACT
Most downsizing initiatives fail to achieve the expected synergies. In many cases, behavioural or human factors are attributed to failures. This article examines the impact of downsizing on the productivity levels of the firm. The productivity of the firm gets affected, in most cases, due to key behavioural factors (i.e. stress, health and survivor’s guilt) that are critical to understand the effect of downsizing on individuals. This review discusses downsizing, followed by a brief discussion on the interrelationships between productivity and survivor’s guilt. Finally, the principles for revitalizing the workplace are discussed. These include the role of HR, the role of management, proper job training, job security, worker involvement and effective communication. The discussion is based on the available literature, case studies and empirical findings.

Introduction: What is Downsizing?
Downsizing is essentially the activity of reducing the workforce of a particular department in a firm or in a company as a whole. However, the goal of the activity is not just to reduce the financial burden on the company but also to hold onto the current productivity levels and standards with a reduced workforce, thereby increasing the per capita productivity of the workforce.

“Organizational downsizing constitutes a set of activities, undertaken on the part of the management of an organization, designed to improve organizational efficiency, productivity, and/or competitiveness. Downsizing represents a strategy implemented by managers that affects the size of the firm 's workforce and its work processes (Cameron et al., 1993). This definition will be the one used in this research. It has become the one most adopted by succeeding authors, such as:

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