Downsizing: an examination of some successes and
more failures
Steven H. Appelbaum
Professor of Management, Faculty of Commerce and Administration,
Concordia University, Montreal, Quebec, Canada
Tamara G. Close
Chartered Financial Analyst, Montreal, Quebec, Canada
Sandy Klasa
Doctoral Student, Department of Finance, University of Oregon, Oregon, USA
Keywords
Downsizing, Employees, Layoffs, Introduction
Leadership, Organizational
change, Organizational culture An uncertain economic climate and an
emerging global marketplace, over the
Abstract past decade, have caused organizations to
Focuses on downsizing and re-
re-evaluate how they function. Gaucher
views selected research on orga-
nizational change and downsizing. (1997) describes the emergence of a ``para-
Addresses the issues of ``survi- digm shift''. Companies that previously
vors'', and also covers the strate- focused on size, specialization, job descrip-
gic concerns in planning a
tions and price, now emphasize speed,
downsizing operation and at-
tempts to determine some speci- integration, job flexibility and value. This
fic reasons why some companies has sparked off an enormous trend of
succeed at downsizing while
organizational change. As Alevras and
others do not. Discusses an orga-
nization's context, composed of Frigeri (1987) state ``corporate change is the
culture, level of trust and level of rule of the day''.
leadership, since it has a profound Leatt et al. (1997) note that to their external
effect on a company's downsizing
environments, companies are attempting to
strategy. Examines case studies
of Compaq Computer, the State of reposition themselves so as to gain a com-
Oregon, and Patagonia and sup- petitive advantage in an uncertain market-
ports the need for the concerns of place. To do this, corporations are
the surviving employees to be
listened to. In the case of these
undergoing organizational change. Emphasis
downsizings, the surviving em- is on ``lean and mean''. Organizations are
ployees were successfully shown striving to reduce costs and improve effi-
that they should not feel victi- ciency. Whereas large payrolls once reflected
mized by the downsizing process,
but instead should see this pro- the power and success of corporations, they
cess as an opportunity for perso- now represent a liability. Since reducing the
nal growth. number of employees is the most common
way of reducing organizational costs,
Buchanan (1997) explains why corporations
are in the ``throes of reorganization, down-
size, re-engineering and restructuring''.
In addition, an important issue related to
downsizing is that of what training and
counseling programs are providing for the
surviving employees after the layoffs.
Caudron (1996) provides some examples of
several companies that have had successful
downsizings as a result of such programs.
Until recently, a belief existed that surviv-
ing employees did not need any special
attention because they would raise their
productivity levels after a downsizing due to
Management Decision their contentment at still having a job.
37/5 [1999] 424±436 Furthermore, it was believed that these
# MCB University Press workers would work harder because they
[ISSN 0025-1747]
would be worried that they would be among
[ 424 ]
those being fired when the next round of
layoffs would occur (Clark and Koonce, 1997).
However (O'Neill and Lenn, 1995), those
who interview the survivors of downsizings
find that the surviving employees of layoffs
are often insecure, angry, and confused.
These workers are worried that they will not
possess the skills necessary to meet the job
requirements of their new job descriptions.
Also, they are insecure as to what influence
they will have over their careers.
Alevras and Frigeri (1987) have con-
structed a model which divides workers into
four groups based on whether their concerns
are for themselves or for their organizations
and whether they feel that they have high or
low influence over their careers. They con-
tend that if managers use their model they
may be able to predict how different types of
employees will be affected by a downsizing.
This article will focus on downsizing. It
will review selected research on organiza-
tional change and downsizing. Most accounts
of downsizing have focused on personnel
issues. This article will address these issues
in the section titled ``survivors'', but it will
also cover the strategic concerns in planning
a downsizing operation and attempt to
determine some specific reasons why some
companies succeed at downsizing while
others do not. An organizational context ±
composed of culture, level of trust and level
of leadership will be discussed since it has a
profound effect on a company's downsizing
strategy.
Downsizing, re-engineering and
re-structuring have been studied in recent
organizational literature on corporate
change as a means to improve organizational
efficiency through organizational change.
The following brief discussion and two ques-
tions will attempt to clarify the relationship
of these terms for organizations attempting
to improve organizational efficiency and
effectiveness while reducing organizational
slack:
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
Figure 1
Strategies for improving organizational efficiency
1 what is their desired future market focus?
. focus on growing or changing
markets; or
. reduce costs in a stable or declining
market.
2 Which method to improve efficiency
should be used?
. reduce staff; or
. redesign work processes.
Figure 1 has been adapted from Leatt et al.
(1997). It depicts the relationship between
these three strategies with regard to both
market focus and method chosen.
From Figure 1, it appears that downsizing
is a strategy that attempts to improve orga-
nizational efficiency in stable or declining
markets, through the reduction in staff. This
will be the focus of this article.
Strategies to downsize: a mixed
bag
Many definitions of ``downsizing'' suggest a
resulting improvement in organizational
efficiency and performance by reducing
labor costs. Proponents of downsizing point
to resulting ``lower overhead, less bureau-
cracy, faster decision-making, smoother
organizational communications, greater en-
trepreneurship, and better productivity''
(Bruton et al., 1996). Yet, not all downsizing
operations succeed. Table I presents the
advantages and disadvantages of some com-
mon techniques utilized in downsizing (Leatt
et al., 1997).
Bruton et al. (1996) cite a 1991 Wyatt
company survey of 1,005 downsized firms.
Only 2l percent had satisfactory shareholder
ROI increases and 46 percent found that
reducing the number of employees did not
prove to reduce expenses as much as antici-
pated. Other analysts also conclude that
downsizing is unsuccessful in achieving
goals sought by organizations (Leatt et al.,
1997). Hitt et al. (1994) estimate that fewer
than half of the companies reviewed achieved
a reduction in overall expenditures, and less
than one quarter successfully improved pro-
ductivity. Another study conducted by
Worrell et al. (1991) concluded that down-
sizing can have a negative impact on organi-
zational performance in both the short and
long term. Bruton et al. (1996) also show that
the stock value of most downsized firms
tends to show declines two years after they
made reductions in staff. Chitwood (1997)
cites a recent study conducted by the
Academy of Management of Fortune 100
companies that engaged in downsizing ac-
tivities between 1983-1995. Results indicated
that only 18 percent of companies grew in
volume, while 25 percent decreased in profit,
and 44 percent either merged, were acquired
or declared bankruptcy. Hupfeld (1997)
reinforces this by stating that in relation to
downsizing, ``the results are never as good as
planned''.
Given the above evidence on downsizing,
why then would an organization undergo
such a change. Some theories postulate:
Efficiency depends on the cost of doing
business. If costs can be reduced while
maintaining productivity, quality and ser-
vice, then efficiency will naturally improve.
Colby (1996) believes that most organiza-
tions suffer from excess staffing and this
renders them uncompetitive. Cutting back
on staff will thus reduce costs. With every-
thing else remaining the same, organiza-
tional efficiency should improve, and a case
can be made for downsizing. So why does
downsizing succeed in some companies and
not in others? From the latest research, it
seems that ``why'' a company decides to
undergo change as well as the state of the
company's organizational context may have
an important effect on the success of a
downsizing operation.
Downsizing creates important effects
inside and outside an organizational
environment. In fact, downsizing results in
breaking the organization into several or
many groups. A group of employees leaves,
sometimes, a group may receive advance
layoff notification and a group stays.
Confusion is high because employees who
lose their jobs may not really understand
why, since it was not their fault. The
decision is often not related to their perfor-
mance, while the ones who stay have done
nothing more to keep their positions (Ap-
pelbaum et al., 1997).
Previous research reveals that organiza-
tions often enjoy an initial increase in
productivity because employees work
harder and more competitively in an
attempt to keep their jobs (Rickey, 1992).
[ 425 ]
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
[ 426 ]
Table I
Advantages and disadvantages of some common techniques utilized in downsizing
Downsizing Definition of technique
Across the board cuts Each department takes a
fixed percentage cut in
its staff
Early retirement Opportunity for individuals Easy, gentle implementation, Net gains may be zero,
to leave the organization
without financial penalties, leave against their will
and financial incentives
paid based on age and
length of service
Outsourcing Contracting with
another organization
delivery of certain goods
or services
Temporary employees Use part-time employees
instead of permanent ones salaries and benefits
Delayering Horizontal slice removed
from the organization with the organization are affected personnel and lower
work being absorbed by
higher and lower individuals
Source: Leath et al. (1997)
This initial increased productivity is short-
lived and is followed by a strong ``malaise''
in the organization.
This survivor syndrome is defined by
some human resource professionals as
being the ``mixed bag of behaviours and
emotions often exhibited by remaining
employees following an organizational
downsizing'' (Doherty and Horsted, 1995).
Downsizing has become an organizational
fact of life, and many surveys have con-
firmed that the survivors are often ignored
before, during and after the corporate
streamlining. Yet it is the survivors that
will be the linchpins of future profitability
(Moskal, 1992). The employees that lose
their jobs during an organizational down-
sizing go through an emotionally wrenching
experience (Spaniel, 1995). Yet the co-work-
ers who remain with their employers have
similar reactions. Today's survivors can be
tomorrow's disgruntled, unproductive
workers or tomorrow's team players, en-
thusiastic about being part of a community
at work that values their contributions
(Strandell, 1995).
In assessing downsizing, Isabella (1989)
describes downsizing as a personal, not
bottom line, issue for many who survive it,
despite the corporate rationale and corpo-
rate savings. Trahant and Burke (1996)
point out that before embarking on any
organizational change it is necessary to first
Advantages Disadvantages
Pain felt equally Penalized efficient parts
throughout the organization of the organization
employees not forced to since financial
incentives paid to
departing individuals
and may not be possible
to replace expertise lost
Cost savings early on Long-term problems may
arise if contractor does
not fully understand
the needs of the
organization
Cost savings from lower Usually lower skill
level employees
All operating units across May overload senior
level individuals may be
improperly trained to
handle the new
responsibilities
assess the organization's readiness for
change. Too many organizations downsize
as a ``knee-jerk'' reaction to a problem.
Downsizing will not succeed unless the
company is ready to change. The authors
propose using a reliable/valid change-man-
agement assessment instrument to uncover
a company's readiness. Such an instrument
can be a diagnostic survey which deter-
mines whether recommendations for
change are based on ``substantive, suppor-
table, and research based understanding of
the crucial issues not on guesswork or
anecdotal data'' (Trahant and Burke, 1996).
Chitwood (1997) and Colby (1996) believe
that downsizing strategies often fail because
of reliance on certain management myths.
Colby concludes that organizations often
undergo change for the wrong reasons. First
of all, many managers believe it will blindly
lead to improved efficiency (myth: ``down-
sizing always improves efficiency''). They
are thus too quick to act, being caught up in
the downsizing trend. Their approach
should be more scientific, using, for exam-
ple, an impact assessment. Second, Colby
(1996) also points out that change is not
always necessary (myth: ``The one option we
don't have is the status quo''). Current
methods have often evolved over several
years to be the best available under the
prevailing circumstances. Therefore, the
problem with many downsizing strategies is
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
not in the implementation of the operation
but in the fact that the organization should
not have undergone change at all. Leatt et
al. (1997) and Hupfeld (1997) examined some
possible alternatives to downsizing. Some of
these other labor-saving efforts include
limiting hours, bans on overtime, salary
cuts, salary freezes, leaves of absence,
voluntary leave without pay, and retraining
of staff so they can move from one depart-
ment to another during busy or slack times.
They need to be considered, but are not
panaceas.
Short-term solutions to long-term
problems
One of the rationales as to why downsizing
operations can fail is the use of downsizing to
achieve short-term goals in the face of long-
term organizational problems. Hein (1997)
points to the problem of ``long term motiva-
tional and productivity problems'' with
downsized corporations. Heller (1996) further
notes that being too quick to downsize may
increase profits in the short term but result
in disaffected workers and middle managers.
This leaves organizations unable to fulfill
long-term goals such as the improvement of
goods and services and added value by
innovation and initiative. Hupfeld (1997)
agrees that downsizing usually happens too
quickly and further comments that while
downsizing may immediately benefit the
bottom line, the costs will eventually creep
back into the organization.
Bruton et al. (1996), in their regression and
qualitative analysis of Fortune 500 com-
panies, sought to uncover strategic reasons
why some downsizing strategies succeeded
and others failed. The researchers concluded
that both healthy and declining firms can
benefit from downsizing only if the firm
matched their downsizing strategy with their
particular situation. Companies that suc-
ceeded in increasing efficiency through
downsizing strategies had one common trait.
They all undertook organizational change as
a means to better concentrate in those areas
of business where the firm had the best
competitive strengths. The authors believed
that all firms should first refocus on their
core areas of competency and after that, if
they find that they are able to operate with
fewer employees, then they should.
Bruton et al. (1996) also ran a regression
analysis for the types of industries that their
sample firms were in, as well as the firm size.
Their results found no industry effect, nor
did they conclude a significant size effect
among the successful downsizing firms. The
researchers also examined whether the
downsized research and development
departments of these firms proved to be a
successful means for increasing organiza-
tional efficiency. While results did suggest
positive short term increases in return-on-
asset numbers for the firm, the authors were
quick to point out the possibility of long term
productivity problems. They attributed this
to the fact that the relation between R&D
spending and future performance is not a
straightforward one.
While strategic downsizing issues, such as
assessing company's readiness to change,
re-focusing on core competitive strengths,
and the matching of long-term strategies to
long-term goals, are significant for deter-
mining if a given downsizing operation will
succeed, these alone may not be enough to
ensure the long- term survival of a company.
Gaucher (1997) believes that organizational
transformation (including downsizing), even
if it is successful, will ``neither restore a
company to industry leader nor ensure that it
intercepts the future''. Something else is
needed to influence the downsizing strategy.
Research has shown that such a catalyst is
the firm's organizational context. Leatt et al.
(1997) concludes that among industry
analysts, there is agreement that structural
change or process change alone are insuffi-
cient to create a viable organization. The
authors argued that while an organization's
cost cutting strategy has a direct impact on
the organization at different levels (including
the total organization, individual depart-
ments, and employees themselves), the over-
all effects of the strategies can be influenced
by the organization's context. Leatt et al.
(1997) have also identified three aspects of an
organization's context that can act as ``facil-
itators or barriers'' to successful implemen-
tation of a downsizing strategy:
1 culture,
2 level of trust in the organization, and
3 leadership during the change process.
Hodgetts (1996) also believes organizational
context has a major impact on downsizing
because not only is the culture altered
dramatically, but also the values of the
leaders change and the trust of the personnel
begins to fade. Each of these three factors will
be examined in terms of successful down-
sizing implementation by varied firms.
Implementation factors: culture
A strong supportive organizational culture is
key in the successful implementation of a
downsizing strategy. Hupfeld (1997) believes
that the negative impact of reducing
[ 427 ]
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
[ 428 ]
employees is ameliorated by a strong and
unifying organizational culture. Leatt et al.
(1997) suggest that to sustain long-run bene-
fits from downsizing, the organization's cul-
ture must be altered. According to these
researchers, companies must analyze their
existing cultures to determine their limita-
tions. Once that is accomplished, possible
alternatives can be explored. These have
been presented in Table I. Since downsizing
breaks any implicit contract between man-
agers and workers, management is at the risk
of being undermined. Therefore, any organi-
zational culture that previously supported
effectiveness cannot be depended on. An
alternative culture must be created. As Leatt
et al. (1997) postulate, if management is
interested in any sustainable change, reduc-
ing labor costs must be linked to a change in
organizational culture and behavior.
If management does not realize the need for
an alternative culture, employees will not be
willing to support change. However, cultural
change is not always necessary during orga-
nizational change if certain elements already
exist in its culture. Bartlett and Ghoshal
(1995) envision these elements as discipline,
support, and trust. These elements create a
framework that allows an organization to
change without also changing its organiza-
tional culture. If the current culture contains
``appropriate core values'' then they must be
identified and protected throughout the or-
ganizational change.
Implementation factors: trust
Hodgetts (1996) believed the recent course
of downsizing throughout the 1990s is differ-
ent from any other economic downturn.
``Organizations are not trimming down in
order to meet temporary downturns in the
economy, they are trimming down for the
long run.'' Employees are feeling ``dis-
empowered'', and they lack trust in their
organizations. This leads to a diminishment
in the organizations' intellectual capital.
Corporations are also now being managed
with the shareholder and not the stakeholder
(which includes employees) in mind. This
has caused a definite decrease in trust
towards the firm from not only employees
but also customers and the community as
well.
Peak (1996) points to the low level of trust
in most organizations. ``It is clear that con-
tinuous change and downsizing have irrevo-
cably altered the trust factor''. How then is it
possible for a downsizing corporation to
maintain any level of trust with their
employees? Brousseau et al. (1996) believe the
answer lies in the way in which organiza-
tions and their employees view each other.
Both firms and employees must be flexible
and be able to accommodate each other as
they do with managing their external envir-
onments. According to these researchers, for
an organization to successfully downsize, it
must be able to adapt to its employees' needs.
This will enable a level of trust which must
be in place.
Implementation factors: leadership
Hodgetts (1996) refers to the ``leadership
challenge'' that organizations must under-
take when attempting to improve efficiency
through downsizing. To bring about success-
ful downsizing the change must not be
merely managed but headed by a leader. This
means that, first of all, when implementing
change, the firm must take into account not
only the needs of the shareholders but those
of the numerous stakeholders of the firm as
well. Second, there are certain values
(morals) that leaders must possess. A firm's
leadership must be ``value-based''.
Furthermore, Chitwood (1997) believes the
problem is that managers are generally not
open to change. Organizational change
cannot be managed. Only leaders can effec-
tively lead a department, a division, or a
corporation through the journey of change.
Leadership is not simply about making
change happen but about taking responsibil-
ity for it. Gaucher (1997) suggests that the
responsibility of leadership is to ``analyze the
potential side effects of organizational
change and to prescribe these interventions
with the least amount of risk''. This requires
a ``full assessment of the impact on opera-
tions, customer satisfactions, organizational
cultures and the level of trust''. Leadership
must be responsible for ensuring the change
process is consistent with the ``mission,
vision and values of the organization''.
Buchanan (1997) also emphasizes the respon-
sibilities of leadership. He believes that those
organizations that thrive in the midst of
change do so primarily due to ``strong,
committed leadership combined with clear
corporate vision and mission statements''.
Another duty that the leader of the
organization must perform during this
activity is the creation of a vision statement.
A vision statement is central to the develop-
ment of an organization's culture (another
aspect of organizational context). Once the
vision statement is completed, leaders in the
organization must commit to the values
inherent in it. Leatt et al. (1997) also
believe that a downsizing organization can
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
particularly benefit from a visioning
exercise.
Who are the ``leaders'' in these organiza-
tions then? Buchanan (1997) believes that the
leaders of change in an organization are the
senior managers, and when they accept
responsibility for the change then the work-
force will follow. Hupfeld (1997) believes that
the leader of change in an organization
should be the CEO. As opposed to the CEO
being at risk in a downsizing corporation, the
CEO should act as the agent of change and
lead the organization through the change
process. Appelbaum et al. (1987) believe that
the human resource department would need
to play a leadership role. Leatt et al. (1997)
suggest the leadership of the organization
must decide the overall strategy, and this
leader or group of leaders would be composed
of members from all levels of the organiza-
tion. The next section of this article will
address the problem of the survivors to a
downsizing.
The survivor syndrome
One of the most common reasons why
companies that downsize perform so poorly
is that they often are successful at anticipat-
ing and preparing for the employees who are
to be released, but they may not be prepared
for the low morale and lower productivity
experienced by the survivors of the down-
sizing (Isabella, 1989). Furthermore, when the
organization needs its people at their best,
they happen to be at their worst (Buchholz,
1993). The employees are said to be experi-
encing when some human resource profes-
sional are now calling ``survivor syndrome''
or ``sickness'' (Appelbaum et al., 1997).
The psychological state of the survivors of
downsizing operations is often ignored by top
management. In fact, Clark and Koonce (1997)
suggest until recently the thinking in many
organizations was that those employees who
were laid off should receive counseling and
therapy, in contrast, those employees who
got to keep their jobs needed little in way of
new training before, during, or after the
downsizing (Clark and Koonce, 1997). The
researchers believe that this is because these
employees were expected to be grateful to
their organizations for having been able to
hang on to their jobs. Hence, these employees
would increase their productivity following
the layoffs. Another popular notion was that
the surviving employees should become
worried that they will be laid off when the
next round of layoffs would begin. This, in
turn, would cause them to raise their pro-
ductivity levels so as not to be among those
being laid off when the new layoffs would be
announced.
This survivor syndrome is defined by some
human resource professionals as being the
``mixed bag of behaviours and emotions often
exhibited by remaining employees following
an organizational downsizing'' (Doherty and
Horsted, 1995). Downsizing has become an
organizational fact of life, and many surveys
have confirmed that the survivors are often
ignored before, during and after the corpo-
rate streamlining. Yet it is the survivors that
will be the linchpins of future profitability
(Moskal, 1992). The employees who lose their
jobs during an organizational downsizing go
through an emotionally wrenching experi-
ence (Spaniel, 1995). Yet the co-workers who
remain with their employers have similar
reactions. Today's survivors can be tomor-
row's disgruntled, unproductive workers or
tomorrow's team players, enthusiastic about
being part of a community at work that
values their contributions (Strandell, 1995).
In assessing downsizing, Isabella (1989)
describes downsizing as a personal, not
bottom line, issue for many who survive it,
despite the corporate rationale and corporate
savings. Locus of control is defined as the
extent to which individuals believe that the
control they have over their lives lies within
their control or in environmental forces
beyond their control (Vecchio and Appel-
baum, 1995). According to Noer (1993), the
people who will have the most severe cases of
survivor sickness are those who build their
lives around their employer and the ones
who will not are those who define themselves
as more than their job. Buchholz (1993)
further comments on this: ``people resist
being changed, they don't resist change.
Change is choice'' (Buchholz, 1993).
Organizations have underestimated the
negative effects of downsizing and do not take
into account the difficulties of motivating a
surviving workforce emotionally damaged by
watching others lose their jobs. Yet, moti-
vating survivors to achieve greater produc-
tivity is essential for company success and
employee job security (Markowich, 1994).
We must remember that, next to the death
of a relative or friend, there is nothing more
traumatic than losing a job, as it disrupts
careers and families (Bryne, 1994).
However, the actual insecurity and anger
felt by survivors often leads to decreased
levels of staff loyalty. With this decrease in
staff loyalty and feelings of anger towards
their organization comes increases in turn-
over and lower levels of productivity (O'Neill
and Lenn, 1995). Interviews of survivors
revealed the anger felt by these employees
with the following excerpt from an interview:
[ 429 ]
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
[ 430 ]
Stop telling us to work harder. Show us how
.... Stop blaming us! We've been loyal to the
company. We've worked hard, and did every-
thing we were told. We've moved for the
company. And now you say we did wrong.
Clark and Koonce (1997) believe that the
survivors after downsizings are an important
link to the organization meeting its post-
downsizing goals of increased productivity.
The survivors bring to their organizations
both core competencies and the detailed
knowledge of their corporation which is
necessary to help their company achieve its
new goals. Yet these same employees, who
are so vital to their organizations, are often
insecure about their future chances for
development and growth in their organiza-
tions after the downsizing. Survivors have
seen their bosses and colleagues recently laid
off. Thus, they normally ask themselves
whether they will be the next to be laid off. In
fact, even if upper management tells these
employees that their jobs are safe, the latter
do not believe this. This is especially the case
after the downsizing because the credibility
of senior management is estimated to drop by
35 percent after the restructuring (Clark and
Koonce, 1997). As well, survivors see that
traditional upward career paths in their
organizations have been indefinitely altered
after the restructuring. Therefore, they are
confused as to how they will follow the career
paths which had been clear to them before
the restructuring, which adds to the anxiety
that the employees are already feeling be-
cause of the layoffs (O'Neill and Lenn, 1995).
The following extract from an interview with
a survivor reveals:
Who are we? The company used to stand for
something. We all wore our company pins
proudly. But now, I don't know who we are
anymore. I've got a notion that we are meaner
and leaner but isn't everyone else? And is it
that who we want to be...?
In addition, survivors worry that they will
not be competent in their newly restructured
job functions. These new job functions
may include tasks, technology or technical
requirements that the survivors do not
possess. The survivors often ask themselves
whether on a personal level can ``old dogs
learn new tricks?'' (Clark and Koonce, 1997).
A problem which further complicates
those already faced by the survivors is that
they may have difficulty adapting to the
emotional, psychological, and stylistic
organizational environment existing after
the downsizing. These individuals may have
had a management approach, which is no
longer consistent with how their new organ-
ization operates. Also, they might have
personal styles which were previously
acceptable or even encouraged but which
have become unacceptable after the recent
downsizing (Clark and Koonce, 1997).
O'Neill and Lenn (1995) contribute an
example of how employees often feel after
downsizing if they do not see the changes that
were promised to them. In interviews, such
an employee stated:
We talk about empowerment, but we've still
got shackles on people. We have to go talk to
senior managers for permission, and they
don't want to improve anything. There's still
that old belief ± if I do nothing wrong I can do
nothing wrong,
We may think that the survivor syndrome
may be reduced only by the actions of the
employers, but some efforts must be taken by
the employees to counterbalance perceptual
and communication problems just described.
Noer (1993) discusses in his book, Healing
the Wounds: Overcoming the Trauma of Lay-
offs and Revitalizing Downsized Organiza-
tions, that those who built their lives around
their employer will be the most severe cases
of survivors.
Cascio (1993) described the new reality in
the workplace and called it the diminishing
expectations. Twenty years ago, a manager
worked for only one or two companies in his/
her entire career. As Cascio reported,
``People used to be able to count on the
organization and its stability. But the myth
that institutions will take care of us has been
shattered.''
Employees need to consider shifting
loyalty to employabilities within the organi-
zation. For the individual, it offers the
chance to take on broad personal career
ownership, rather than listening to the
rhetoric, and feeling more empowered. For
organizations, it offers the chance to achieve
more flexible and painless change, and the
opportunity to generate more appropriate
behavior. However, it will be more chall-
enging for organizations, since employees
become more able to leave, but also more
motivated to stay (Doherty and Horsted,
1995).
Noer believes employees who ``break the
chain of co-dependence with their employer
are immune'' to survivor sickness. He adds
that layoff survivor sickness is a symptom
and that unhealthy dependence on the orga-
nization is the disease (Spaniel, 1995).
Noer also mentioned that, under this new
contract, no guarantee of employment exists.
The focus now is on performance; loyalty
(seniority, for example) is no longer
rewarded (Chaudron, 1994).
Clark and Koonce (1997) believe that if
organizations wish to decrease the pain felt
by survivors after the downsizing that they
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
must design survivor programs which seek
to communicate, consistent, and clear infor-
mation concerning the transition plans.
These programs must address three impor-
tant needs. First they must aid managers and
their employees to properly deal with
change. Second, they must help individual
employees to plan and manage their career
paths. Third, they must train managers on
how to properly coach and mentor their
employees.
These types of programs show the value of
filling the void left from the old unwritten
contracts that workers who were loyal to
their companies would be awarded for this
loyalty with continued employment in their
organizations. The new type of contract
would put an emphasis on development and
professional growth for both the employee
and his or her organization. Also, it would
increase the employability of the employee,
both within and outside of his/her present
company. Under this type of arrangement
between companies and their employees the
company should provide their workers with
opportunities for development and more
independence in the work place. In return
employees are made responsible for making
certain that they perform at higher levels
than they did prior to the downsizing. With
this arrangement, organizations can con-
tinue to invest in the training of their
employees as long as they are showing
positive signs of development and growth. At
this juncture, a paradigm may be required
for management to deal with the delicate
survivor syndrome problem exacerbated by a
downsizing experience.
The change reaction model
Alevras and Frigeri (1987) have developed a
model which serves to train managers on
how to effectively deal with the emotions felt
by survivors after a downsizing has been
executed. Trainers are often the least in-
volved in the downsizing process. This is
because top management does not always
view supervisory training programs to be
relevant to a downsizing crisis. Top manage-
ment fails to realize that organizational
effectiveness, management of change and
understanding managerial processes are the
areas of the trainer's expertise (Alevras and
Frigeri, 1987).
In order to change such views, training
departments can develop contingency plans
based on the predicted reactions of different
types of employees to the layoffs and down-
sizing experience. The change reaction model
(Table II) developed by Alevras and Frigeri
(1987) divides employees into four types of
groups for managers. These are:
1 leaders,
2 followers,
3 victims, and
4 avengers.
The horizontal axis in the model represents
the employee's area of mental concentration.
On one extreme the employee is only con-
cerned with his/her self-concerns. These
concerns include anger and self-pity. An
employee who feels overwhelmed by the
whole downsizing process can submerge
himself/herself in these negative self-
concerns. Conversely, at the other end of the
horizontal spectrum is the employee who is
concerned with his distressed company and
accepts downsizing as an unfortunate but
necessary action for the good of the organi-
zation.
In summary, the horizontal axis represents
the full range of employee reactions to the
downsizing. These range from complete
internalization of feelings to externalization
of the downsizing as a manageable occur-
rence.
The vertical axis in the model represents
power and influence. The downsizing can
have different effects on employee percep-
tions of their power and influence in their
organization. At the lower end of the vertical
axis are employees who feel that as a result of
the reduction in jobs they have no control
over their careers in their organizations and
that they have reduced levels of power in
their organizations. At the upper end of the
vertical axis are employees who see the
downsizing as an opportunity to improve
their position in the organization. They may
also employ their newly found power in-
wardly, thereby generating negative feelings
toward their company.
From the change reaction model we can
divide employees into four categories, based
on what quadrant they find themselves in the
model. In the upper right quadrant are the
leaders. These individuals' primary concern
is for their distressed organization. As well,
they see the downsizing as an opportunity to
increase their level of power and influence
levels. These individuals try to convince
others in their organization to put their
efforts into what they see is the direction in
which the company is heading. However, if
leaders do not have the proper sense of what
direction their organization is heading they
can inadvertently cause problems for their
companies.
In the bottom right quadrant of the model
are the followers. These individuals feel that
they have less power and influence as a
[ 431 ]
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
Table II
The change reaction model
Higher power and influence
Low power and influence
Source: Alevras and Frigeri (1987)
[ 432 ]
result of the downsizing. However, they also
believe that the downsizing was necessary
for their problem-laden organization and
they do not withdraw themselves into self-
concerns. Followers make a conscious deci-
sion to support the address made by the
leaders. As well, followers may believe that
their loyalty to their organizations will
provide them with benefits in the long-run.
Finally, followers may sometimes be the
leaders in their own divisions in certain
cases.
In the bottom left quadrant of the change
reaction model are the victims. The concern
of these employees is for themselves and they
withdraw into feelings of anger and self-pity.
They do not accept that downsizing was
necessary for the good of their firms. Also,
these individuals feel powerless as a result of
the downsizing. They perceive themselves to
have little influence in their organizations as
a result of the layoffs. Victims do not want to
take chances. Hence, when orders are given
to them, they simply pass the orders down
the line. Also, these victims do not take
initiatives after the downsizing. They say the
correct things at the correct moments and
ensure that their risk levels are kept to a
minimum.
Finally, in the top left quadrant of the
model are the avengers. These individuals
are encompassed by their self-concerns. They
do not care much about why the downsizing
may have been necessary for the organiza-
tion. However, avengers also seek to increase
their power and influence as a result of the
downsizing. They see openings that have
developed and seek to move up in their
organizations. Avengers use their newfound
power with a narrow focus centered on their
personal concerns. Their thoughts are that if
they can bring down others, this will help in
rebuilding themselves. Avengers have the
potential to create many problems in their
organizations. They either act overtly to
achieve their aims or wait covertly for the
right occasion to make their move which
benefits them personally.
If managers can diagnose which employees
are the avengers and which are the victims,
they may take actions to alter the behaviors
of these individuals. For instance, it could be
possible to channel the high energy levels of
Concern for self Concern for company
Avenger Leader
Victim Follower
the avenger into more positive venues by
giving this individual positions of contained
leadership. These responsibilities may
rebuild the self-esteem of the avenger and
help him/her to stop being obsessed with
his/her self-pity and anger resulting from the
downsizing. If this occurs and the avenger
moves rightward along the horizontal axis of
the model, he/she may become a more
productive member of his/her organization.
Actions can also be taken to remedy the
situation of employees who feel like victims
because of the downsizing. One action which
could be taken would be to counsel the
victims and explain to them that downsizing
was necessary for the company (either
economically or structurally) and that the
company values them. If managers can
clearly define the victims' new roles and
encourage them by giving them recognition,
it is possible to move the victims out of their
quadrant and into the followers quadrant.
These strategies for managers of a downsized
organization can be beneficial for the survi-
vors as well as for future directions.
Successful downsizings: some
case studies
Caudron (1996) examined several cases in
which downsizing had been handled cor-
rectly by human resource departments. The
cases of the Compaq Computer downsizing of
1991, the State of Oregon downsizing of 1993,
and the Patagonia downsizing of 1992 were
studied. In these three cases there were four
ingredients present which made the survi-
vors accept the layoffs:
1 Flexibility was present. Since survivors
had the flexibility in their responses to the
layoffs, this made the process easier.
2 Intuition was listened to. Human resource
managers listened to their inner feelings
and this enhanced their own intuitive
abilities concerning what the survivors
needed to make it through the difficult
period associated with the layoffs. As well,
by using their intuitive abilities, man-
agers were able to see this whole period as
an opportunity for growth.
3 Empathy was present. Human resource
managers asked themselves what was the
effect of the downsizing on managers and
executives. By seeing how these indivi-
duals may have perceived the layoffs,
better and easier preparation could be
taken to ensure programs that would
benefit them the most.
4 A great deal of service was provided to
the survivors. This included service
provided by surviving managers for their
Steven H. Appelbaum, employees. Survivors who kept them-
Tamara G. Close and selves busy by giving aid to other indivi-
Sandy Klasa duals in their organizations were less
Downsizing: an examination of
some successes and more likely to experience trauma following the
failures layoffs. Each case will be analyzed for key
Management Decision factors leading to effective downsizings.
37/5 [1999] 424±436
Compaq Computer downsizing
Compaq Computer of Houston, Texas laid off
(downsized) 2,000 employees in October, 1991,
in order to compete more effectively with
companies having lower cost products on the
market (Caudron, 1996). This represented a
full 15 percent of its work force. In order to
decrease employee feelings of betrayal
caused by the downsizing, the human
resource department at Compaq developed a
campaign to communicate information about
the layoff before it actually occurred. If
survivors could be given an understanding of
the strategic reasons for experiencing the
downsizing, negative rumors would be kept
to a minimum, and employees would better
comprehend in what direction Compaq was
heading, and what was necessary for the
computer company to achieve its aims.
Managers were responsible for communi-
cating information about the layoffs to their
employees. This provided two benefits. First,
managers were a more credible source of
information for the employees. Second, if
employees had questions concerning the
downsizing, they could have them answered
immediately.
In addition, prior to the downsizing, man-
agement went through a training program
that was not only concerned with how to give
support to the outplaced workers, but was
also concerned with how to help the surviv-
ing employees. During four-hour training
seminars supervisors were explained the
reasons for the layoffs. Information concern-
ing Compaq's competitive environment was
also given to the supervisors. They were also
shown how to conduct their meetings with
their subordinates that would explain the
moves to them. Finally, supervisors were
also given a leaflet concerning questions that
they might be asked and how best to answer
them.
In addition, Compaq put emphasis on tell-
ing the survivors how the employees that
were laid off were being treated. The com-
pany believed that if survivors knew how
their laid off colleagues were faring and knew
what was being done for them that they
would view the whole downsizing process
more positively.
The result of Compaq's program to keep
the survivor syndrome to a minimum was
evident eight months after the layoffs.
Compaq announced the introduction of a
whole range of lower-cost products. The fact
that they were able to do so less than a year
after the layoffs gives an indication of their
success at getting the survivors to accept the
downsizing and direction that the company
was heading in. Moreover, employees
accepted the downsizing as being inevitable
and necessary for Compaq's success and
survival.
State of Oregon downsizing
In 1993, the state of Oregon announced a large
number of layoffs (Caudron, 1996). At the
time of the layoffs the state decided to create
a series of workshops to help employees come
to grips with the pain caused by the down-
sizing. These workshops had three aims.
First, they were intended to encourage state
employees to discuss their feelings of anger
and grief caused by the layoffs. Second, they
aided survivors in accepting the discomfort
caused by the changes in their jobs. Third,
these workshops documented to employees
how they could see the change resulting from
the downsizing as an opportunity for growth
in their jobs and the development of new
skills.
The training co-ordinator of these work-
shops, on reporting on the success of these
workshops, stated that ``from what employees
have told me I get the feeling that change is
something they can now look forward to and
believe that they can control'' (Caudron,
1996). Finally, the only things that the
co-ordinator reported could have been dif-
ferent is that they would have made a
counselor recruited from the employee as-
sistance program of the state of Oregon
available for drop-in appointments. Hence,
surviving employees could have received
help when it was most needed. As well, the
co-ordinator was suggesting that counselors
organize group meetings at department le-
vels. The state of Oregon reported that this
would have been useful because ``since a
downsizing is a shared social experience it
should be a shared healing experience ...
grieving losses together isn't only cleansing,
it helps to connect people'' (Caudron, 1996).
Patagonia downsizing
The 1992 Patagonia lay-off of a full 20 percent
of its work force is another case in which
actions were taken to ensure that a healthy
environment was created surrounding a
downsizing (Caudron, 1996). First, informa-
tion was communicated to the workers
about why the downsizing was necessary.
Principally, actions needed to be taken in
order to make corrections for problems of
inefficiency which had been created by the
rapid and unchecked growth of the company.
[ 433 ]
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
[ 434 ]
According to the director of human resources
of Patagonia, ``The extensive communica-
tions that surrounded the downsizing helped
surviving employees focus their energies on
rebuilding the company. They did not have to
worry why the company laid off certain
people or why the company had to be
restructured'' (Caudron, 1991).
These three cases indicate what results can
accrue when specific interventions are
planned and executed a priori and during a
downsizing exercise.
Conclusion
Downsizing is often unsuccessful in achiev-
ing the goals sought by organizations. Recent
empirical evidence has shown that down-
sizing as a means to improve organizational
efficiency and solve long-term problems, does
not always prove to be adequate (Leatt et al.,
1997; Bruton et al., 1996; Worrell et al., 1991;
Chitwood, 1997; Hupfeld, 1997).
There were some tactics examined as to
why some corporations appear to succeed at
downsizing while others do not. Predomi-
nantly companies often fail to assess their
firm's readiness for change (Trahant and
Burke, 1996). In many instances change is not
even necessary (Chitwood, 1997; Colby, 1996).
Companies that fail at downsizing also often
fail to explore all the possible alternatives to
downsizing (Leatt et al., 1997; Hupfeld, 1997).
Another reason why some corporations do
not successfully downsize is the desire to
achieve short-term goals while the business
faces long-term problems (Hein, 1997; Heller,
1996; Hupfeld, 1997).
Organizations need to refocus their core
areas of competency (Bruton et al., 1996).
Once this is completed, they can then con-
sider downsizing, if they believe they are able
to function at the same level of efficiency but
with fewer employees. Research has shown
that firms that synthesized their downsize
strategies with their particular situation did
tend to have successful results (Bruton et al.,
1996).
However, the above strategic actions that a
firm must make before embarking on a
downsizing operation, may not be sufficient
to guarantee successful results (Leatt et al.,
1997; Gaucher, 1997). A firm's organizational
context ± comprised of culture, trust and
leadership ± can have an important influence
on the downsizing strategy and how it
impacts the organization. A firm's organiza-
tional context that contains: a strong, sup-
portive culture (Hupfeld, 1997; Leatt et al.,
1997; Bartlett and Ghoshal, 1995) and a high
level of trust (both of the employees and the
organization) (Hodgetts, 1996; Peak, 1996;
Brousseau et al., 1996) as well as a strong,
committed leadership combined with a clear
corporate vision and mission statements
(Hodgetts, 1996; Chitwood, 1997; Gaucher,
1997; Buchanan, 1997; Leatt et al., 1997;
Appelbaum et al., 1987; Hupfeld, 1997) will not
only positively influence any downsizing
strategy but also help to ensure the long-term
viability of that organization (Leatt et al.,
1997; Hodgetts, 1996).
Firms that undergo downsizing must also
pay special attention to whether they are
providing adequate training and counseling
programs for the surviving employees. Clark
and Koonce (1997) suggest that a formerly
popular notion was that the employees who
survived a layoff did not require any special
attention. Instead only the employees who
lost their jobs required assistance. These
researchers also imply that this notion
existed for two reasons. First, it was assumed
that if workers were able to keep their job
they would be highly satisfied and thus
would raise their productivity levels. Second,
it was thought that after a downsizing,
employees would be so traumatized of losing
their jobs when the next round of layoffs
occurred, that they would work harder and
raise their productivity levels (Clark and
Koonce, 1997). These are not mutually
exclusive.
However, Clark and Koonce (1997) inter-
viewed workers who had survived down-
sizing and found that these workers were
often angry, confused, and insecure in the
aftermath of the downsizing. They were
worried that they would not have the com-
petencies required for the new job formats
after the layoffs. As well, they felt they no
longer had any influence on their career
paths. This problem was compounded by the
fact that employees tend to have less trust in
upper management following the layoffs.
Hence, they do not believe statements from
management that they have ``nothing to
worry about''. In fact, research has shown
that the credibility of management is
expected to decrease by 35 percent following
a downsizing (Clark and Koonce, 1997).
An important issue in preparing training
and counseling programs for surviving
employees is how different types of employ-
ees will react to the downsizing. Alevras and
Frigeri (1987) have constructed a model
which seeks to show how workers will react
differently to downsizings when they are
judged on two criteria. These are the level of
concern they have for themselves, as opposed
to their organizations, and whether they feel
that they have much influence over their
careers following the downsizing, as opposed
Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
to only having a minimal influence over their
careers.
The researchers also claim that if their
model is properly used, managers will be able
to predict how different employees might
react following a downsizing. If they can
predict these behaviours these managers can
prepare training programs for different
types of employees based on these predicted
reactions (Alevras and Frigeri, 1987).
Finally, Caudron (1996) has demonstrated
that on three occasions in which human
resource departments took adequate mea-
sures to ensure that the surviving employees
of a downsizing received proper training and
counseling following the layoffs, positive
results occurred. Case studies of Compaq
Computer, the state of Oregon, and Patagonia
supported the need for the concerns of the
surviving employees to be listened to. Also,
in the case of these downsizings, the surviv-
ing employees were successfully shown that
they should not feel victimized by the down-
sizing process, but instead should see this
process as an opportunity for personal
growth. This led to a successful change effort
for all parties involved.
Organizations have under-estimated the
negative effects of downsizing and do not take
into account the difficulties of motivating a
surviving workforce emotionally damaged by
watching others lose their jobs. Yet, moti-
vating survivors to achieve greater produc-
tivity is essential for company success and
employee job security (Markowich, 1994).
We must remember that, next to the death
of a relative or a friend, there is nothing more
traumatic than losing a job, as it disrupts
careers and families (Bryne, 1994). Most
organizations have neglected the downside of
downsizing because they assume that the
survivors will simply be pleased and happy
about keeping their jobs.
The unspoken assumption is that those
remaining (who were lucky enough) will
produce more than the entire group did
beforehand. This usually does not happen.
Rather than being thankful to keep their jobs,
employees are demoralized and less loyal,
more angry, cynical and distrustful. Perhaps
massive layoffs could be justified if they
enhanced organizational functioning. Yet
layoffs do not necessarily solve the problems
for which they are the proposed solutions. A
study of Fortune 500 organizations engaged in
layoffs showed that the more severe the
layoffs, the worse the organization's long-
term profit margin and return on equity. If
the giants are negatively affected, can
smaller organizations with fewer resources
escape similar negative effects (Barling,
1995).
By being fair in layoff procedures, by
carefully following a strategic plan and using
leadership, downsizing may be possible
without permanent disability if senior man-
agement takes a moment to weigh the human
resource factors versus the financial bottom
line (Appelbaum et al., 1997).
Recommendations
For those firms that successfully completed
downsizing, it would be intriguing to see
whether their organizational context had
changed post-downsizing or remained the
same. While downsizing remains a very
important topic in organizational change
literature, there exists relatively little
empirical research comparing the different
strategies used by downsizing firms.
The issue concerning what type of training
best suits the needs of surviving employees is
also an issue that would be particularly
interesting for further research. For
example, a study needs to be conducted
which would examine if surviving employees
accept more the decision to have layoffs if
more emphasis is placed on why this is
necessary for the good of the organization, or
if instead more stress is placed on showing
the employee that the downsizing will pro-
vide him/her with new opportunities for
individual growth. As well, valuable insight
could be provided by seeing whether indivi-
duals who are more influenced by one of
these two approaches have different attri-
butes than employees preferring the other
approach. Such information would also
benefit in determining what additional
characteristics belong to leaders, as opposed
to followers, victims and avengers.
Finally, insightful information could also
be provided by further research that would
compare post-downsizing surviving employ-
ee job satisfaction, absenteeism, and turn-
over for firms which provide substantial
amounts of training and counseling for their
surviving employees as opposed to firms
which do not provide this type of support for
these employees. If such a study supported
the hypothesis that job satisfaction was
higher for employees of firms that provided
such programs, and also that absenteeism
and turnover was lower for these organiza-
tions, this type of information would be
useful in order to convince organizations of
the merits of providing training and coun-
seling programs for surviving employees.
This is one of the downsizing challenges.
[ 435 ]

Steven H. Appelbaum,
Tamara G. Close and
Sandy Klasa
Downsizing: an examination of
some successes and more
failures
Management Decision
37/5 [1999] 424±436
[ 436 ]
References
Alevras, J. and Frigeri, A. (1987), ``Picking up the
pieces after downsizing'', Training and
Development Journal, Vol. 41 No. 9, pp. 29-31.
Appelbaum, S.H., Simpson, R. and Shapiro, B.T.
(1987), ``The tough test of downsizing'',
Organizational Dynamics, Vol. 16 No. 2,
pp. 68-79.
Appelbaum, S.H., Delage, C., Labib, N. and Gault,
G. (1997), ``The survivor syndrome: Aftermath
of downsizing'', Career Development
Intemational, Vol. 2 No. 6, pp. 278- 86.
Barling, J. (1995), ``The lingo: downsizing, right-
sizing, and restructuring add up to the same
thing: you've been let go'', The Gazette,
Montreal, 25 November, p. B6.
Bartlett, C.A. and Ghoshal, S. (1995), ``Rebuilding
behavioural context: turn process
re-engineering into people rejuvenating'',
Sloan Management Review, Vol. 37 No. 1,
pp. 38-45.
Brousseau, K.R., Driver, M.J., Eneroth, K. and
Larsson, R. (1996), ``Career pandemonium:
realigning organizations and individuals'',
Academy of Management Executive, Vol. 10
No. 2, pp. 38-45.
Bruton, G., Keels, J. and Shook, C. (1996),
``Downsizing the firm: answering the
strategic questions'', Academy of Management
Executive, Vol. 10 No. 2, pp. 38-45.
Bryne, J.A. (1994), ``There is an upside to down-
sizing'', Business Week, 9 May, p. 69.
Buchanan, P.J. (1997), ``It's time to take the
initiative'', Trust and Estates, Vol. 136 No. 8,
pp. 16-17.
Buchholz, S. (1993), ``Creating our future: leading
change for competitive advantage'', Workshop
for Canadian National Railway, pp. 2-5.
Cascio, W.F. (1993), ``Downsizing: what do we
know? What have we learned'', Academy
of Management Executive, Vol. 7 No. 1,
February, pp. 95-104.
Caudron, S. (1996), ``Teach downsizing survivors
how to thrive'', Personnel Journal, pp. 38-48.
Chaudron, D. (1994), ``After the layoffs: healing
and rebuilding'', HR Focus, Vol. 21 No. 12,
December, pp. 9-10.
Chitwood, R.E. (1997), ``Why change is not
working in most companies'', National
Underwriter, Vol. 101 No. 5, pp. 19-21.
Clark, J. and Koonce, R. (1997), ``Engaging survi-
vors'', Executive Excellence, May 1997,
pp. 12-13.
Colby, W.D. (1996), ``The five great management
myths'', Business Quarterly, Vol. 16 No. 2,
pp. 93-5.
Doherty, N. and Horsted, J. (1995), ``Helping
survivors to stay on board'', People
Management, Vol. 1 No. 1, January, pp. 26-31.
Application questions
1 If downsizing creates so many organiza-
tional problems, why does the stock
market like it so much?
Gaucher, E.J. (1997), ``Are we paving cowpaths?'',
Frontiers of Health Services Management,
Vol. 13 No. 4, pp. 48-51.
Hein, K. (1997), ``Reengineering undergoes
reconstruction'', Incentive, Vol. 171 No. 2, p. 5.
Heller, R. (1996), ``Downsizing's other side'',
Management Today, March, p. 23.
Hitt M.A., Keats, B.W., Harbach, H.F. and Nixon,
R.D. (1994), ``Rightsizing: building and
maintaining strategic leadership and long-
term competitiveness'', Organizational
Dynamics, Vol. 23 No. 2, pp. 18-32.
Hodgetts, R.M. (1996), ``A conversation with
Warren Bennis on leadership in the midst of
downsizing'', Organizational Dynamics,
Vol. 25 No. 1, pp. 72-8.
Hupfeld, S.F. (1997), ``Restructuring and organi-
zation: management's role in defining
organizational culture'', Frontiers of Health
Services Management, Vol. 13 No. 4, pp. 40-3.
Isabella, L.A. (1989), ``Downsizing: survivors'
assessments'', Business Horizons, May-June,
pp. 35-41.
Leatt, P., Baker, G.R., Halverson, P. and Aird,
C. (1997), ``Downsizing, reengineering, and
restructuring: long-term implications for
healthcare organizations'', Frontiers of Health
Services Management, Vol. 13 No. 4, pp. 3-37.
Markowich, M. (1994), ``Lifeboat strategies for
corporate renewal'', Management Review,
Vol. 83 No. 9, September, pp. 59-61.
Moskal, B.S. (1992), ``Managing survivors'',
Industry Week, 3 August, pp. 26-31.
Noer, D. (1993), Healing the Wounds: Overcoming
the Trauma of Layoffs and Revitalizing
Downsizing Organizations, Jossey-Bass, San
Francisco, CA, p. 248.
O'Neill, H. and Lenn, J.D. (1995), `Voice of
survivors: words that downsizing CEOs
should hear'', Academy of Management
Executive, Vol. 9 No. 4, pp. 23-4.
Peak, M.H. (1996), ``An era of wrenching corporate
change'', Management Review, Vol. 85 No. 7,
pp. 45-9.
Rickey, M.W. (1992), ``The impact of corporate
downsizing on employees'', Business Forum,
Vol. 17 No. 3, Summer, pp. 9-13.
Spaniel, B. (1995), ``Feeling guilty because you
survived a layoff...? You're not alone'',
Communication World, Vol. 12 No. 5, May,
p. 23.
Strandell, B.K. (1995), ``Do-right-sizing right'',
Executive Excellence, May, p. 17.
Trahant, B.W. and Burke, W.W. (1996), ``Traveling
through transitions'', Training and
Development, Vol. 50 No. 2, pp. 37-41.
Vecchio, R.P. and Appelbaum, S.H. (1995),
Managing Organizational Behaviour, Har-
court Brace, Canada, p. 97.
Worrell, D.L., Davidson, W.N. and Sharma, V.M.
(1991), ``Layoff announcements and share-
2 In your experience, is there really a
``good'' way to manage lay-offs?