ORGANISATION DEVELOPMENT AND CHANGE FOR LAWYERS

PROJECT

TOPIC: RIGHTSIZING AND DOWNSIZING

PRESENTED TO: MS. DIPANWITA BISWAS

BY: GUNMAYA SINGH MANN

ENROLLMENT: A3221514086
BBA-LLB(H)
2014-2019
AMITY LAW SCHOOL CENTRE-1
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 PREFACE

This paper presents the role that obligation plays an important part in an individual's
behavior. It shows how anyone's life condition may be improved through an understanding
of the law of obligation and the application of the law.

This paper is primarily addressed to educators, who play a very important role in the growth
and development of the youth. An understanding of obligation, as one of the basic factors
that influence behavior will help them provide for better means of meeting the complex
needs of school children with varied mental abilities, and physical and emotional make-ups.

Grateful acknowledgment is here made to those who helped this researcher gather data for
this paper. This work would not have reached its present form without their invaluable help.

DATE: 31st JANURY 2017

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SIGNATURE OF STUDENT SIGNATURE OF TEACHER

ACKNOWLEDGEMNT

I have taken efforts in this project. However, it would not have been possible without the
kind support and help of many individuals and organizations. I would like to extend my
sincere thanks to all of them.

I am highly indebted to Amity Law School Noida for their guidance and constant
supervision as well as for providing necessary information regarding the project & also for
their support in completing the project.

I would like to express my gratitude towards Ms. Dipanwita Biswas for their kind co-
operation and encouragement which help us in completion of this project.

I would like to express my special gratitude and thanks to industry persons for giving us such
attention and time.

My thanks and appreciations also go to my colleague in developing the project and people
who have willingly helped me out with their abilities.

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 TABLE OF CONTENT

QUOTE BY ADRIAN WILKINSON..5

ABSTRACT....5
INTRODUCTION..5
WHAT IS BUSINESS DOWNSIZING?..............................................................5-7
FIGURE 1
FIGURE 2
DOWNSIZING PROCESS...7-8
THREE TYPES OF DOWNSIZING STRATERGIES..8-9
TABLE 1
WHAT IS BUSNIESS RIGHTSIZING?...............................................................9
VALUE OF EMPOWERED TEAMS9
FIGURE 3
SPANS OF CONTROL OF MAXIMUM PRODUCTIVITY.10
TABLE 2
FIGURE 4
ALTERNATIVES TO REDUNDANCY,,,10
CONCLUSION11

Adrian Wilkinson

American management adopted quality concepts in order to cut costs and regain international
competitiveness. Their adoption of quality improvement practices often paralleled organizational
restructuring and employment loss. The fact that some Total Quality Management cases have occurred
simultaneously with or resulted in downsizing and layoffs makes the effect of Total Quality Management a
serious concern for workers and other stakeholders

ABSTRACT

In recent years sustainability has become a hot topic and something all organisations want to be seen as
being identified with. The twin disciplines of quality and Human Resource Management have joined this
bandwagon. In HR terms this has meant a shift in emphasis away from human management to resource
management with the argument that organisations need to allow the needs and aspirations of individuals to
be placed at the heart of the workplace However, this does not fit with our knowledge of the reality of the
contemporary workplace where downsizing remains the order of the day and there are now concerns as to
the effectiveness of the post-downsizing anorexic organisation. This paper looks at the debates and raises a
number of issues for academics and managers in organisations.

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INTRODUCTION

The sustainability debate raises a number of issues for organisations to consider when pursuing sustainable
human resource outcomes to reinforce corporate profitability and corporate survival, and also to satisfy
employee aspirations and needs in the workplace. Human resource sustainability requires the organisation to
recognise and place value on human capabilities which take a more holistic and integrated approach to
people management. For corporate sustainability, an organisation must recognise, value and promote the
capability of its people However, the cost-cutting regime associated with many organisational change
strategies of recent years has resulted in the breakdown of the old employment relationship. Human resource
sustainability has been advocated by a number of commentators. They argue that there is a crisis facing the
management of human resources with staff turnover increasing, loyalty declining, stress levels rising and
productivity growth diminishing. In this paper the significance of organizational downsizing is discussed
and its potential for causing problems for sustainability when mismanaged. We then examine the processes
involved. Lastly, the costs of downsizing, in both financial and human terms are discussed.

WHAT IS BUSNIESS DOWNSIZING?

Business downsizing is simply reducing the number of reporting layers in the organisation to produce a
better line of communication and efficiency through the business. Downsizing is a stressful and a risky
business and should not be carried out by anyone who has not experienced this technique. It is the best put in
the hands of the consultants of the respective organisation. The work flow is greatly improved as often
empowered teams or empowered departments replace the traditional hierarchy. What is the right number of
levels in the organisation? It tremendously various from company to company but four seems to work really
well. Working in favor of this concept is the fact that our country is unable to produce the highest paid and
educated workforce if we compare it with the other nations workforce. People nowadays dont need the
same level or types of management that was place ten years ago. See down, in Fig.1 that for increasing the
productivity the financial service company, just the sales and services division before carrying out the
downsizing.

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 Fig.1

Everybody in the company was convinced that this figure was right, as it had always served the company
well. Due to new players in the market the company had to respond and did so by the concept of
downsizing. The new downsized figure is shown below as Fig.2.

Fig.2

DOWNSIZING PROCESS
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Redundancy, despite the practice that managers have had in undertaking it of late, is often badly managed
with many negative consequences. In part this may stem from the rarity of formal redundancy procedures.
However, there is much to be gained from a humane and strategic approach to downsizing. According to the
way downsizing is implemented is more important that the fact that it is implemented. He reports on three
approaches to downsizing.
Firstly Workforce reduction strategies are focused primarily on reducing headcount and are usually
implemented in a top-down, speedy way. However, the downside of such an approach is that it is seen as the
equivalent to throwing a grenade into a crowded room, closing the door and expecting the explosion to
eliminate a certain percentage of the workforce. It is difficult to predict exactly who will be eliminated and
who will remain but it grabs the immediate attention of the workforce to the condition that exists. Because
of the quick implementation associated with the workforce reduction strategy, management does not have
time to think strategy through and communicate it properly to employees. This may result in a low
"perceived distributive fairness". As a result, employees may be negatively affected by the stress and
uncertainty created by this type of downsizing and may react with reduced organisational commitment, less
job involvement, and reduced work efforts.
Secondly, work redesign strategies, aimed at reducing work through redesigning tasks, reducing work
hours, merging units, etc. However, these are difficult to implement swiftly and hence are seen as a medium-
term strategy.
Thirdly, systematic strategies focus more broadly on changing culture, attitude and values not just changing
workforce size. This involves redefining downsizing as an on Total Quality Management, going process as
a basis for continuous improvement; rather than as a program or a target. Downsizing is also equated with
simplification of all aspects of the organization - the entire system including supplies, inventories, design
process, production methods, customer relations, marketing and sales support, and so on
Again, this strategy requires longer-term perspectives and is more consistent with the ideas of Total Quality
Management.
Three Types of Downsizing Strategies

Basis Work force Reduction Work Redesign Systemic

Focus, eliminate, Headcount people quick Jobs, levels Culture status quo
implementation time ,units work moderate extended
Payoff target Short term pay off Moderate term pay off Long term pay off
Inhibits Long term adaptability Quick payback Short term cost savings
Examples Attrition lay off, early Combine functions, Involves everyone
retirement and Buy out merge units, redesign simplify everything,
packages jobs and eliminate layers bottom-up change, target
costs
Table.1

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WHAT IS BUSNIESS RIGHTSIZING?

Right sizing is a lot less risky. It involves reducing the organisation by a small percentage. By doing that you
can keep the organisation trim and in a better condition.

Rightsizing can be achieved by a number of painless means such as

Freezing recruitment
Releasing the long term sick allowing early retirement
Releasing poor performers

With rightsizing, reducing the organisational numbers will initially improve the productivity figures. The
trick with rightsizing the organisation is to watch and track the link between the reducing number and
productivity and stop the reduction as soon as the productivity improvement graph plateaus out. There is no
reason why mangers cant do this on a daily basis, small companies are good at this whereas the companies
where the total number of employees in more than 300 finds it difficult to perform a similar task.

VALUE OF EMPOWERED TEAMS

Depending upon the type and size of the organisation, empowered teams make a good sense and are an
integral part of the organisation change. In real terms you will get a minimum of 15% extra productivity,
often at no extra cost. Fig.3 shows you the same.

Fig.3

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SPANS OF CONTROL FOR MAXIMUM PRODUCTIVITY

A brief history lesson: It was in 1760 that Adam smith set out the ideas that would shape the businesses. He
was responsible for the new titles of Supervisors and Managers; and with the recommendations that the ideal
span of the management would 1:7. Maybe that was appropriate in the 1760, but it sure is not what we need
today. There has never before been such an educated workforce. Just look at the educational standards the
sheer number of people with degrees. Job opportunities for such people is very less in a country like India.
So it makes sense to manage differently and to give more decision making and responsibility to teams.
Gone are days that people need span control of a ration which is equal to 1:7. Ratios of 1:50 is now
common with the clients pushing the boundaries out to 1:200.

RATIOS TABLE

YEARS FOLLOWING RATIOS

1760 1:7
1860 1:8
1960 1:10
1995 1:15
1998 1:30
2009 1:50
Table.2

What minimum ratios you can expect depending on the type of team working you select. Fig.4 shows you
the same.

Fig.4

The biggest productivity restriction is the old fashioned manager, who rapidly becomes a bottle neck in a
highly productive environment.

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ALTERNATIVES TO REDUNDANCY
Employers are often encouraged to consider alternatives to redundancies and to view compulsory
redundancy especially, only as a last resort. There is a wide range of possible alternatives to redundancy.
These include redeployment, freezing recruitment, disengaging contractors and other flexible workers,
reducing overtime, Second mints, career breaks, and introducing more flexible working patterns such as job-
sharing and part-time work. For example, in the US, Delta Airlines, Lincoln Electric and Rhino Food are
often cited exemplars of how adjustments can be made in the use of temporary workers, subcontracting, etc,
to reduce the impact of downsizing on core staff Wage cuts as an alternative to job cuts tend to be sparingly
used, although there have been a number of prominent examples of this, as a method of cost reduction most
notably at Volkswagen in Germany. In the UK Thomas Cook cut Total Quality Management Journal 6 Oct
2004 5-Oct-04jobs by 1500 in 2001 and asked staff to take pay cuts of 10% as business collapsed in the
wake of terrorist attacks in the USA. Senior executives cut their own pay by 15% and all those earning more
than 10,000 had salaries cut by 3-10%.

CONCLUSION

We are more aware today that downsizing is not the route to corporate nirvana. downsizing may cut labor
costs in the short run, but it can erode both employee and eventually customer loyalty in the long run
Research has shown that downsizing has mixed effects on performance. For instance, study of the impact of
downsizing over a period of 15 years on performance found that, in all firms studied, reduction in
employment was not translated into improvement in performance. There is thus little evidence that
downsizing improves long-run profitability and financial performance Employment security is often seen as
a precondition for the practice of Human Resource Management yet as discussed above the trend as been
away from secure tenured employment to the slimmed down anorexic organization form of today. But as
we note that for new work arrangements to pay off, employment needs to
be reasonably stable. Why then do managers persist with downsizing? A number of explanations have been
put forward. Firstly, it is increasingly argued that managers have simply become addicted to downsizing
because being lean and mean is now fashionable in itself. Downsizing has become the cocaine of the
boardroom.

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Secondly, rather than a more acceptable and appropriate use of downsizing because firms are now more
productive or better organized or too bureaucratic and over-staffed, managers are often forced to do so by
the markets demands for short-term boosts in profits. Downsizing, even if it does not deliver on profitability
over the long term, it seems that the very fact of announcing it can give short term stock gains as investors
and market makers respond favorably to such announcements Depressingly, it seems downsizing acts a
reassuring signal to markets that managers are in control and acting to put things right.

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