Assignment No: 1

Course Title:

Strategic Human Resource Management (MGT-687)

Topic:

Differentiate between downsizing and restructuring by giving at least two

examples

Submitted To:

Ma’m Fareeha Fatima

Submitted By:

Muhammad Atiq Ur Rehman

Reg No:

17-ARID-5389

Semester:

BBA (hons)-8th
Downsizing

Downsizing literally means reducing the size of the organisation in order to cut costs, hive off
unprofitable operations and improve operational efficiency.

In fact, it is a restructuring process to meet the challenges of the environment. In the context
of human resource management, downsizing involves elimination of certain jobs with a view
to cut pay bill and improves work efficiency.

Downsizing is also given such names as restructuring and rightsizing. Irrespective of the
name used, it almost always means reducing the size of the organizations permanent full-time
staff.

Examples:

 Market driven responsibility

Kathryn Dovey, writing on the “The Business of Sustainability” for the "Berskshire
Encyclopedia of Sustainability" notes that a number of multinational corporations that were
subjected to protests, bad press and lawsuits have been driven by market pressures to
examine the impacts of their global business operations on human rights. By 2009,
according to Dovey, 242 companies had a human rights policy, and more than 5,000
companies had signed the United Nationals Global Compact, described as the world’s
largest corporate responsibility initiative.

 WTO Response

The WTO states on its website that there has been ongoing discussion and controversy for
the WTO to include workers' rights in its international trade regulation. But the call for such
regulation from governments in Europe and North America is countered by a fear from
developing countries that provisions on workers' rights would undermine their comparative
advantage of lower-wages, and would perpetuate poverty and low workplace standards. As
of 2010, “labor standards are not subject to WTO rules and disciplines.”
Restructuring

Restructuring is the act of changing the business model of an organization to transform it for
the better. These changes can be legal, operational processes, ownership, etc. The cause of
such a shift in the company can be either external or internal.

A change as enormous as such can have various implications for the company. In most cases,
it can result in either downsizing or upsizing employees, changes in staffing requirements, etc.
This is because a restructure can take place for many different reasons.

Examples:

 The Wall Street Journal

In early 2017, Dow Jones announced plans to reorganize its flagship publication, The Wall
Street Journal, saying that it would help the company shift toward a more digital strategy.
Dubbed WSJ2020, the reorganization was announced as a plan to move away from outdated
editorial processes and shift the focus from print to digital. The company also announced the
creation of new job categories and alignment of journalist positions with a more technology-
driven vision.

Some employee positions have already been cut in the WSJ Asia and Europe bureaus, but in
the U.S., WSJ plans a reorganization of existing staff rather than a series of layoffs or position
eliminations. According to the Editor-in-Chief, the company plans to keep the WSJ headcount
of 1,300 roughly flat. The plan is to avoid mass layoffs by reallocating employees into new
roles, for which existing employees must self-select and apply. Although such a strategy can
seem like a veiled attempt to cut jobs, having employees apply for new positions could help
the publication identify internal candidates for roles rather than having to do layoffs and
subsequently recruit from the outside.

 Hulu

Hulu recently announced a company reorganization to accommodate company growth and

further enhance and expand its streaming content for customers. In the new structure, the
company will be organized around four strategic priorities, resulting in both the elimination of
key management positions, as well as the hiring of a new Chief Technology Officer (CTO)
and Chief Data Officer (CDO). Since announcing its reorganization, Hulu has taken steps to
streamline and consolidate smaller offices, and says it plans to add at least 200 tech and
product employees through 2018.

In Hulu’s case, its reorganization and growth may make it more attractive to potential buyers.
Hulu is jointly owned by several media companies, including Disney, Fox, and Comcast, and
is widely considered the valuable prize in Disney’s current bid to purchase 21st Century Fox.
Hulu has built up over 20 million subscribers to date, and with its recent reorganization (and
possibly a new parent), it may be well poised to continue its growth in profitable areas such as
original programming.