The Definition Of Downsizing Management Essay

The Definition Of D ingestsizing Management EssayGiven the issues relating to this research field argon introduced and research objectives atomic number 18 in like manner be proposed carefully in Chapter 1. In Chapter 2, the researcher would like to continuous introduces the concepts, definitions and theories relevant to the issues that already mentioned in Chapter 1, done that, Chapter 2 provide provide and defecate research hypothesis for research. Basically, Chapter 2 includes the main parts as follows (1) The definition of curtailment, (2) The definition of Survivors Syndrome, (3) The research hypothesis (4) Chapter summary.Definition of DownsizingIn the economic mount of continuous competitive, developing, changing and unpredictable, make-ups hold placeing severe downturns in their business or facing demandingies, curtailment strategy is being used by many a nonher(prenominal) makeups in every industries and sectors with different goals and visions. There is not a single downsize definition accepted by all researchers (Davis, Savage, Steward Chapman, 2003). There are many different definitions or under liveing about downsizing, for example Cameron, (1994194) defines downsizing as a positive strategy which do as a purpose of plaques a set of organisational activities undertaken on the part of management of an organization and designed to improve organizational efficiency, productivity, and/or competitiveness. In another the way, downsizing is not something closely(p) happen to the organization, it is something that the organization knows and act purposively. Downsizing is whitethorn be implemented as a defensive reaction to decline or as a proactive strategy to enhance organizational capital punishment (Kim S Cameron, 1994). Many organizations for a long time that no longer considered downsizing as a situation solution in the hard time period, provided they considered downsizing as an effective strategy to reduce costs, human focus, g ive stock opportunities, change magnitude production line challenge and promotion. The expenditure cost muckle be cut effectively due to better full termination making and effective human choice controlling if the organization merchant ship maintain the right sized of company. It develops a culture of plump where employees can ca-ca opportunities for growth, they can easily participate and thing in making decision. Moreover, employees easily ol work outy modality be part of organization that they should better participate with more than collaboration, fidelity, and accuracy. According to Mishra and Spreitzer (1998) defines downsizing has become the strategy successful by many organizations attempting to cope with fundamental, structural changes in the world economy. Downsizing as a deliberate reducing in size or complexness of a firms activities intended to improve the profit magnate, productivity, and/or competitiveness of the firms continuing operations(Legatski II, 1998). exclusively in conclusion, just about researches have defined downsizing as any simplification in the size of the organization (e.g. Budros, 1999 Cascio, 1993 Freeman Cameron, 1993 Kozlowski, Chao, Smith Hedlund, 1993). Downsizing, in general, refers to the reduction of work for certain organization. For employees, downsizing is considered as a management weapon to carry out greater control over the workforce. To management, it is a strategic measure to bring optimized operation efficiency and productivity in organization. Cameron and colleagues (e.g. Cameron et all., 1991, 1993 Cameron, 1994b) have identified three organizational strategies to achieve downsizing workforce reduction strategy, work redesign and systematic change. The first strategy is workforce reduction is typically a short- enclosure strategy, which alone focuses on reducing organizations headcount. In a confirmatory study, Mishra and Mishra (1994) found that much(prenominal) strategy might star t to mischief in measured organizational qualification or minus outcome of those who anticipates. Human resource is essential and is a agent that makes the decision for the study of organizations. Lack of human resource go forth increase workload, anxiety about losing their patronages at any time, and these feeling leads to jeopardy mental, these are reasons that cause labor productivity reduced. Work reduction is applied by organizations through some programs such as attrition, early retirement or voluntary severance packages, lay get throughs and terminations. The second and third strategies are work redesign and systematic change strategies. While work reductions resulted is lead to reduction, rather than improvement, the work redesign and systematic change are positively related to organizational performance in term of some(prenominal) cost reduction and quality improvement (Cameron et all.,1993 Mishra and Mishra, 1994) and to survivors (people who remains) of downs izing having a positive learning orientation (Farrell and Mavando, 2004).Many previous researches indicated that the use of workforce reduction is change magnitude and become popular despite the harmful impacts may arise for organization. Workforce reduction or simply called workforce downsizing is becoming the most popular strategy and a plethora of workforce reduction strategies for downsizing of employees has been proposed (e.g. Greenhalgh et al., 1988 Gutchess, 1985 Leana Feldman, 1992 Price, 1990). Whenever reduce equipments, machines organizations can find out the outcome and its impact through ingenuous calculations, but in workforce downsizing, the emotions, loyalty, and human effort cannot simply calculate. In an organizational context, employees not only contribute their individual skills and knowledge, they in addition collaborate and conflate their separate skills toward creating firm capabilities. As such, both human and social capital-and thitherfore the commitme nt and the loyalty of employees-play an all-important(prenominal) role in dictating a firms capacity to create competitive advantage. Reducing headcount may lead to immediate labor cost savings, but it can also seriously erode employee commitment and loyalty, with negative consequences for firm competitiveness and performance.So the questions are what the impacts of workforce downsizing to organizations are, how it effects, and what the advantage and disadvantage of the impact are? Some researches indicated the opinion that organizational downsizing may create better productivity or better performance for organization while, others indicate downsizing may create negative impact or little terror to human resource, break of existed organization culture. Downsizing has been defined as an attempt to increase organizational effectiveness(Kozlowsky, et. al. 1993). Freeman Cameron (1993) and Tomasco (1990) from their finding indicated that organization downsizing created some benefits t o organization such as faster decision making, more flexibilities, and increase in productivity. Cascio (199397) suggested that proponents of downsizing generally expect the following benefits lower overheads, less bureaucracy, faster decision making, smoother communications, greater entrepreneurship and increases in productivity. Downsizing can suggest to financial markets or government funding agencies that an organization is cutting costs and reducing waste, which may increase availability of capital for subsequent activities (Cascio, 1993 Dial Murphy, 1995 Palmon, Sun Tang, 1997. Downsizing for some individuals is also a chance to demonstrate the capacity himself, or an hazard for career development. The people who still remain with organization will be the one who give the most effort for the development of organization, if they can prove themselves at this time, success may comes to their organization and will come to them as well.However, in contrast with the benefits that downsizing may bring, many other previous studies indicate their powerfully disagree with those arguments. Downsizing may provide a decrease in operating expenses in the near term, but the long term impacts may not be so positive (Difrances, 2002). Downsizing can lead to a loss of knowledge and experience base because of some laid off will be the people who worked for a long time with organization, old people, who may not have a fast and efficient action in work like young people, but they have extensive knowledge, experiences that young people learn in short time, loss available mentors for existing and new employees, loss of corporate culture, and downsizing can have direct impaction to the customers such as loss of established customer service and middlemans.Therefore, whenever workforce downsizing is elect by organizations in hard time or pacifist(prenominal) time, on that point is definite and obvious impact good or bad on organizations. But in all the affected elements, th e human factor is probably the most affected element. Human capital (i.e., the knowledge, skills, and abilities of employees) is one of the primary factors a business can rely on to differentiate their products or services and build a competitive advantage (Hargis Bradley, 2011). Human resource is one of the 5Ms (Man, Money, Machine, Method, and Material) of management process of production they are five input resources for any businesses. (http//www.setpointusa.com/blog/lean-manufacturing-5-ms/). Even when the world economy is continuous developing, many modern machines are developed and can someway a part replace human resource, but no organization can flourish without human resource. Human resource is a decisive factor that can determine the working of remaining four factors, people is the one who ensure flexible operation of machine, the reasonable use of material as well as appropriate use of money and method, all these actions will help the organization achieve their goals. During crisis situation as well as in the peaceful time, man or human resource is the only factor that helps businesses overcome or limit the adverse impact of crisis. Man is the most important Ms among five Ms, the right and stable number of human resource in appropriate jobs will enable the success beyond imagination of the organization. They are staffs of organization, they sanctified their soul to the development of organization, they are people who be laid off or people who well-disposed enough to keep their job. The individuals who lose their jobs (called victims) are seemingly the most affected by downsizing. Numerous researchers have focused on the impact of downsizing on workers whose employment is terminated due to reasons independent of job competence (Cappelli, 1992). These individuals are often known as the victims of downsizing due to research that documents the devastation of job loss, focusing on negative consequences in terms of psychological and physical well- being (e.g., Bennett, Martin, Bies, Brockner, 1995 Cappeili, 1992 Fallick, 1996 Leana Feldman, 1992). The real pains of downsizing cannot be minimized. Careers change, families struggle, and downsized victims suffer loss of prestige, income and security. While a few downsized individuals may be victims of their own past inefficiency, the vast number are those who have performed well and played by the rules but have become the victims of a changing economic environs.However, several(prenominal) researchers have analyzed those who remain in the downsized organization called survivors (e.g., Allen, Freeman, Russell, Reizenstein, Rentz, 2001 Appelbaum Donia, 2001 Brockner, 1988a 1992 1995 Brockner, Grover, OMalley, Reed, Glynn, 1993 Cascio, 1993 Mollica Gray, 2001 Noer, 1993 ONeill Lenn, 1995 Shah, 2000). The survivors of downsizing are not the happy campers, grateful to have their jobs, but rather that surviving is so difficult that continuing employees experience high levels of assay than displaced employees (Collins-Nakai, Devine, Stainton Reay, 2003). The existent psychological consider between employees and their managers within the organization may be affected by the downsizing. Many researchers reported that it would create feeling of anxiety, uncertainty, suspiciousness and decrease in productivity. The fear and anxiety of survivors who still remain with the organization is increasing due to the increasing feeling of uncertainty, instability and insecurity that downsizing may brings. This is called as survivors syndrome.Definition of survivor syndromeThe literature suggests a condition referred to as survivor syndrome, or a set of attitudes, feelings and perceptions that occur in employees who remain in organizational systems following involuntary employee reductions (Collins-Nakai, Devine, Stainton Reay, 2003 p.109-110). Survivor syndrome is defined by some human resource professionals as being the mixed bag of behaviors and emotions often e xhibited by remaining employees following an organizational downsizing (Appelbaum, Close Klasa, 1999 p.424-436). Survivor syndrome has become known as the excited and attitudinal characteristics of those who have survived from a downsizing (Mossholder et al., 2000 Iverson and Pullman, 2000 Allen et al., 2001). The emotional solutions of each survivor are different.There are not many previous researches confirmed the positive response for survivor when downsizing occurs, some note that concentrating on core operational competencies can reduce unnecessary management layers and increase the speed of decision-making (DeWitt, 1993 Tomasko, 1989), some researches even suggest that fear of termination may increase individual effort among employees who wish to retain their jobs (Kraft, 1991). A few active survivors feel themselves so lucky because they still have their job, survivors may work more hours without compensation to help the organization through the transition. They intrust t hat they quite understand the difficulties as well as the main reasons why organizations choose to apply downsizing strategy, they are will to stick with organization for a long time and treat add their efforts to the development of organizations. Contrary to a few positive responses, a lot of previous researches have provided many evidences to prove the harmful impacts of downsizing may bring for survivors such as lower morale (Armstrong-Stassen, 1993), increase vehemence (Leana and Feldman, 1992), and anger, envy, and guilt (Noer, 1993). According to Collins-Nakai, Devine, Stainton Reay (2003) consistent with the terminology of a syndrome, this collection of symptoms includes anger, depression, fear, distrust, and guilt, or Baruch and Hind (2000) indicates that survivors exhibit a plethora of tasks, such as de motivation, cynicism, insecurity, demoralization and a significant decline in organizational commitment. Termination of co-workers may lead to perceptions of organizatio nal injustice and distrust of top management (e.g. Brockner Greenberg, 1990 Mishra Spreitzer, 1998 Noer, 1998). Kinnie, Hutchinson and Purcell (1998) indicated the survivors syndrome include increased levels of stress, absenteeism, distrust as well as decreased levels of work quality, morale and productivity. Lecky (1998) identified the survivor syndrome will lead to decrease employee commitment, increase concern about job security.A lot of research shows that in case of downsizing, the organization breaks the existed psychological postulate between employees and their managers, which is the family blood that make employees get along to their organization or their manager, feel commitment to work, trying their best to the development of the organization. It is a loyalty, commitment with organization. But its consequences may brought by downsizing can create the dependent psychological within employees, they did not want to try, to give their effort because of their worried, unc ertain and the loyal feeling may be replaced by a sense of betrayal. Downsizing survivors often curious about management and spend their times to observe the intention of management after downsizing occurs they have greater concern on their future with the organization. It creates stress among employees in the organization it affects their next attempt and the willing to stay with the organizations. With survivors, organization may thinks they are lucky, but in the reality of many people, their emotions are anger, loneliness, feel lost in broken team work because of missing their colleagues, they do not feel confident enough for work due to their wondering about their job. Downsizing occurs that averages organization is left with fewer employees who are expected to put in their best effort in a manner that enhances organizational productivity (Kets de Vries Balazs 1997). They are the ones who organization put their faith in expect long term commitment, but with few people, it may lead to workload, role conflict, and role ambiguity tend to be high among the remaining staff after downsizing (Hellgren et al. 2005 Parker et al. 1997 Tombaugh sinlessness 1990). Workload reflects the perception of having too much work to do in the time available (Beehr, Walsh Taber 1976). Workgroup membership changes also may be associated with the loss of important organizational knowledge (Fisher White, 2000). Role conflict concerns the experience of having to deal with conflicting terms, instructions, and demands in the work environment (Rizzo, House Lirtzman 1970). Role ambiguity relates to the individuals experience of not knowing what is expected of her at work (Caplan 1971). Besides that, survivors may view downsizing as a threat to their job security, an indication of poor organizational performance, or a symptom of unfair management behavior. Survivors may also develop negative feelings toward the organization, as well as perceiving that organizational goals are diff icult to achieve. According to Isabella (1989) has noted that while organizations are usually take care of the needs of those being laid off, they are often forget and unprepared for the changing emotions, lower morale and productivity often experienced and expressed by survivors. Managers may expect survivors not only to be grateful they were spared and to forgive what happened to their friends, but also to put their feelings aside and work harder. But the reality is not that, a bag of survivor behaviors or called survivors syndrome has always existed, it is like a contract between employees and organizations, the contract gives survivors psychological control over their work environment, which lets them freely invest themselves in caring for customers.TrustGranovetter (1985) and Lewis and Weigert (1985) define trust as a willingness to be vulnerable to others, ground on the prior belief that those others are trustworthy. Another definition of trust is offered by Mayer, Davis and Schoorman (1995), who proposed that trust is the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party. Or according to Mishra Spreitzer (1998) trust is related to psychological contracts since trust is the expectation of a future action based on the action in the past by observing the rules of behaviors in relationships. If these expectations are not met, the expectation becomes hopeless, frustrated and will lose confidence, distrust will appear instead of trust (Robinson, Kraatz Rousseau, 1994). The trust is an essential part of managing people and building a high performance, productivity organization. Trust is the foundation of all relationship from top to bottom in the organization. If employees believe in their manager, their organization, this relationship will always help to create good worki ng conditions, employees are willing to stand up for their organization at any situations, they will naturally want to do a good things, contribute their best effort for the success of their organization. Conversely, if there is no trust between employees and managers, employees will have negative actions, will not devote their energy to the development of their organization, the relationship is broken.Downsizing organizations appear to suffer a deterioration of trust (Buch Aldridge, 1991 Cascio, 1993) and an increase in fear (Buch et al., 1991). The occurring of downsizing makes employees feel uncertain about organization, stress the responses tends to score lower in problem solving, creativity and the ability to learn new skills, uncertainty and anxiety reduces the focus of work. Trust between employees and organization also reduced because downsizing is usually a headache thought of managers, they need a long time for making the decision, but with employees, downsizing is just a sudden result, sometimes they do not have a chance to prepare or may not believe that they will be the one who be laid off. According to ONeill Lenn (1995), survivors who believe that management is competent and reliable, may view downsizing as less threatening because they believe that the managers will keep their promise, be honest and open for what is expiration on with their employees. Trust is instrumental in overcoming resistance to change, for it shapes how individuals interpret the implementation process (Kotter Schlesinger, 1979). If they have trust, survivors are willing think that all the things that organization do, have a reason, it is a good thing for them, for organization, downsizing just helps organization stand in difficult time as well as creating opportunities for employees in the future. In other words, trust in top management minimizes the categorization of threat by helping survivors to understand and believe in managements intentions and expected behavio r. If they do not have trust, survivors will have negative thinking such as the decision of manager is wrong, or managers put their personal interests above the interests of employees. Without trust, employees are likely to feel threatened by downsizing, leading to resistance and retaliation, rather than the constructive cooperation that is necessary to facilitate deep change (Quinn, 1996).CommitmentThere are a lot of definitions about employee commitment such as A force that stabilizes individual behavior under circumstances where the individual would otherwise be tempted to change that behavior (Brickman, 1987), or The relative strength of an individuals identification with and involvement in a particular organization (Mowday et al, 1979) or simply A psychological state that binds the individual to the organization (Allen Meyer, 1990). Commitment is loyalty to the organization. A loyal employee identifies with an organization and is involved in being an employee of that organizat ion (Price Mueller, 1986). Committed employees feel that there is a tight string between them and the organization, which, in the positive form, makes them more willing to perform their job. Organizational commitment is the driving force behind an organizations performance (Suliman and Iles, 2000, p. 408). The multidimensional approach poses that organization commitment is influenced by three constructs emotional attachment (affective commitment), perceive costs (continuance commitment) and moral obligation (normative commitment) (Allen and Meyer, 1990). Affective commitment is mean that employees stay with organization because they want to, they believes in organization and feel it like their home. Normative commitment is mean that employees stay with organization because they feel obligated to continue to work for many different reasons and purposes. Continuance commitment is mean that employees stay with the organization because cost of giving up the job is too high for them. ( European Motivation-Index.com). It has also been proposed that different types of commitment can have different effects on behaviors and attitudes (Iles et al., 1990). For example, continuance commitment can have detrimental effects on job satisfaction compared to the beneficial effects of affective commitment (Suliman and Iles, 2000). Affective commitment has been shown to be the best predictor of intention to leave (Stallworth, 2004) and found to be more important than job satisfaction in determining service quality of customer-contact employees (Malhotra and Mukherjee, 2004).It can be seen that in human resource management process, organizations should pay economic aid to the affect commitment group because these people will add value, increase productivity and quality to the organization, but they also be the most affected by downsizing, or in other word maintaining a high level of employees affective commitment to the organization is assumed to be a critical factor for success ful downsizing, but downsizing tends to reduce employees affective commitment to the organization (Lee Jaewon, 2002). According to many research about employee commitment, in downsizing context, employees commitment to an organization is challenged. Moreover, commitment has been shown to positively influence other variables related to survivor syndrome, such as job satisfaction (Liou, 1995 Fletcher and Williams, 1996 Mowday et al., 1974 Wong et al., 1995 Vandenberg and Lance, 1992), performance (Hartmann and Bambacas, 2000) and sensed organizational support (Eisenberger et al., 2001). A negative relationship has been shown for absenteeism (Iverson and Deery, 2001 Metcalfe and Dick, 2000) and turnover intention (Schnake and Dumler, 2000)StressAccording to Casico Wynn (2004) stated that the downsizing create a breach of an unwritten rules that constitute the psychological contract between employer and employee leads to a rise in stress and a decrease in satisfaction, commitment, int ention to stay and perceptions of an organizations trustworthiness, honesty, and caring about its employees. Stress has been defined as a stimulus, a response, or the result of an interaction between the two, with the interaction described in terms of some imbalance between the person and the environment (Cooper, Dewe ODriscoll, 2001). When downsizing occurs, like the victims, the survivors often lose control over their employment experimental condition and work situation. Survivors often feel angry and overwhelmed by the sudden time out of the workplace, similar to people who be laid off, survivors also have feelings of betrayal and fury when downsizing occurs. Research also indicates that other stressful characteristics tend to leave when work has to be carried out by fewer employees (Hellgren Sverke 2001 Hopkins Weathington 2006 Pfeffer 1998). The lack of people to work become overwhelmed, constant anxiety because of imbalance as well as job losses can be happened anytime t hat creates stress to survivors.Employee stress can take many forms and significant impact on both employees and organizations it can licence as anxiety, irritability, dependency, depression and it results in reduced productivity, employee burnout, absenteeism (Valueoption.com). It has been suggested that the stress of the survivor may be great or even greater than the stress of those who has been laid off (Kaufman 1982).Job insecurityJob insecurity is the exact opposite of job security, is defined as the perceived powerlessness to maintain desired continuity in a threatened job situation by Greenhalgh and Rosenblatt (1984). Job insecurity represents one of the most frequently investigated stressors in the context of organizational change and downsizing (e.g., De Witte 1999 Sverke/Hellgren 2002). The string sticks employees with organization is job, in other word, any organization keeps their employees by proper job with many opportunities to learn, to develop, and above all of th em, the job has to be permanent and security. When downsizing occurs, survivors feel like the promise of organization has broken down, they see their colleagues lose their job and they fear of losing their jobs at anytime, fear of instability of income, loss of status or self esteem. They believe that their work will no longer be safe, if the organization was willing to let the employees go in the past, they would be willing to do it again in the future. Job insecurity leads to dissatisfaction, people intent to leave the organization and come to a safer place it also leads to greater absenteeism, higher turnovers and disability claims (Boroson and Burgess, 1992 Koco. 1996 Mishra and Spreitzer. 1998 Tombaugh and White. 1990).Previous studies such as Moore, Grunberg Greenberg (2006) Ashford, Lee Bobko (1989) Brockner et al. (1992) or Hellgren Sverke (2003) have concluded that job insecurity are related with organizational downsizing both in short and long term perspective and the worried about future job loss is associated with impaired work attitudes and well-being. Theorists have emphasized that job insecurity is a multidimensional phenomenon (Ashford, Lee Bobko, 1989 Greenhalgh Rosenblatt, 1984 Jacobson, 1991). The first dimension, called severity of threat, consists of the range of work features at risk, the valence of these features, probabilities of losing each feature, and the number of sources of threat. The second dimension is perceived powerlessness, or ones ability to respond to risks. Job insecurity can also be thought of in terms of expectancy (i.e. probability of loss) and valence (i.e. value of job features) from expectancy theory (Jacobson, 1991). Job insecurity is a broad concept, including threats to any desired work features including opportunities for career development or wages. Perceptions of job insecurity also can be considered as stress inducing, so reports of worry and stress are sometimes used as proxies for perception of job ins ecurity. Results showed that perceived job insecurity increased over time as layoffs unfolded but no new information arrived. Job insecurity was lowest among those employees who had no contact with workforce downsizing, with higher insecurity among those who had friends or co-workers laid off, and the highest insecurity among those who had been warned that they would be laid off or who had been laid off and then rehired.HypothesesMany organization managers apply workforce downsizing strategy for their organization, often focus their attention and effort for those employees who be laid off and pay little attention to those who remain with organizationAs the large commercial bank in Vietnam, Techcombank is also applying workforce downsizing like many other organizations to overcome the current difficulties. affirm to know the survivors syndrome is very important not only for Techcombank but also for many other organizations. Organizations that understand the causes of survivor syndro me at an early stage can a better chance to find an appropriate way to go.Based on the previous studies, in the scope of this research, researcher would like to find out the impact of workforce downsizing to the behavior such as trust, commitment, and stress and job insecurity of Techcombank staffs to see how they were affected by workforce downsizing and how trust, commitment, stress and job insecurity will be changed between before and after workforce downsizing is applied. Through this research, researcher hopes to put some help for Techcombank managers in order to have a better understanding about their employees so that they can looking for an appropriate direction as well as proper(postnominal) plan to minimize the harmful impacted that may arises from downsizing.Based on the above theory discussion, the Hypothesis is formulated as following(H1) There is a significant difference in stress of respondents before and after workforce downsizing is applied(H2) There is a significa nt difference in stress of respondents before and after workforce downsizing is applied(H3) There is a significant difference in stress of respondents before and after workforce downsizing is applied(H4) There is a significant difference in stress of respondents before and after workforce downsizing is appliedChapter SummaryThroughout the chapter, the researcher gives a deeper review of previous research on workforce downsizing and its impacted on survivors. There are many different opinions about the effects of workforce downsizing on organizations, some studies indicated