The Impact of Downsizing on the Corporate Reputation
FACTA UNIVERSITATIS Series: Economics and Organization Vol. 5, No 1, 2008, pp. 51 - 62
THE IMPACT OF DOWNSIZING ON THE CORPORATE REPUTATION UDC 005.32
∗
Biljana Djordjević, Suzana Djukić
Faculty of Economics, University of Niš, Serbia
Abstract. This paper deals with the downsizing influences on the corporate reputation. In this paper we stress the importance of the corporate reputation as one of the most important firm 's intangible assets. This kind of resources could be a significant source of the firm 's competitive advantage. After the presentation of a brief review of downsizing literature, we investigate the downsizing influence on the corporate reputation. More precisely, we investigate how downsizing influences the eight dimensions that determine corporate reputation index. Our discussion is based mainly on the findings of a number of referent studies that investigate downsizing outcomes. Since we have found that there is a great possibility for downsizing to be an unsuccessful firm 's strategy and therefore to decrease the corporate reputation, it is important before making the decision about downsizing to reconsider the necessity of such a decision. Key Words: downsizing, corporate reputation, corporate reputation index, employee.
INTRODUCTION Under the conditions of intensified competition and demanding consumers, corporate reputation is becoming a source of competitive advantage. Selection in purchasing on the part of consumers on the basis of brand, image and other intangible product characteristics is becoming dominant, thus inducing companies to invest more in the creation of reputation that will reflect the business of the enterprise. Favorable reputation which is a result of the long lasting favorable public perception of the enterprise can be transformed into added value and become valuable assets of the enterprise which are hard to copy. In today 's competitive business environment, organizations are forced to realize different kind
THE IMPACT OF DOWNSIZING ON THE CORPORATE REPUTATION UDC 005.32
∗
Biljana Djordjević, Suzana Djukić
Faculty of Economics, University of Niš, Serbia
Abstract. This paper deals with the downsizing influences on the corporate reputation. In this paper we stress the importance of the corporate reputation as one of the most important firm 's intangible assets. This kind of resources could be a significant source of the firm 's competitive advantage. After the presentation of a brief review of downsizing literature, we investigate the downsizing influence on the corporate reputation. More precisely, we investigate how downsizing influences the eight dimensions that determine corporate reputation index. Our discussion is based mainly on the findings of a number of referent studies that investigate downsizing outcomes. Since we have found that there is a great possibility for downsizing to be an unsuccessful firm 's strategy and therefore to decrease the corporate reputation, it is important before making the decision about downsizing to reconsider the necessity of such a decision. Key Words: downsizing, corporate reputation, corporate reputation index, employee.
INTRODUCTION Under the conditions of intensified competition and demanding consumers, corporate reputation is becoming a source of competitive advantage. Selection in purchasing on the part of consumers on the basis of brand, image and other intangible product characteristics is becoming dominant, thus inducing companies to invest more in the creation of reputation that will reflect the business of the enterprise. Favorable reputation which is a result of the long lasting favorable public perception of the enterprise can be transformed into added value and become valuable assets of the enterprise which are hard to copy. In today 's competitive business environment, organizations are forced to realize different kind
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