Sweeping economic, technological, and social changes during the last two decades have begun to transform how work is organized in modern society. The shift from an industrial to a knowledge economy, the globalization of markets, and the rapid proliferation of new technologies have dramatically increased the pace and unpredictability of change. In response, firms dismantled rigid hierarchies to enhance their responsiveness to new environmental demands. Through downsizing and restructuring, organizations eliminated layers of management and expanded the responsibilities of remaining employees. These societal changes had direct consequences for employment structures and practices in organizations. Gone are stability, vertical advancement, and employment security that defined industrial era careers. Greater flexibility, performance demands, and extensive job mobility characterize twenty-first-century employment.
[...] Colquitt, J.A., Conlon, D.E., Wesson, M. J., Porter, C.O. and Ng, K. Y. (2001) "Justice at the millennium: A meta-analytic review of 25 years of organizational justice research." Journal of Applied Psychology. 86: 425- 445. Deavers, K. L., Lyons, M. R., and Hattiangadi, A. U. (1999) The American Workplace 1999: A Century of Progress - a Century of Change. Washington, DC: Employment Policy Foundation. Fisher, S.R. and White, M.A. (2000) "Downsizing in a learning organization: Are there hidden costs?" Academy of Management Review. 25: 244-251. [...]
[...] The key phrase is "other things remaining equal." In practice, however, other things often do not remain equal, and therefore the anticipated benefits of employment downsizing do not always materialize. Cascio and Young (2003) examined financial and employment data from companies in the Standard & Poor's 500. The S&P 500 is one of the most widely used benchmarks of the performance of US equities. It represents leading companies in leading industries, and consists of 500 stocks chosen for their market size, liquidity, and industry-group representation. [...]
[...] trimmed 250 jobs in an effort to cut costs after a delayed product launch slowed demand, shares lost nearly half their value in one day and never recovered. In response, Palm's Chief Financial Officer, Judy Bruner, noted: "There were a lot of questions about the viability of the business" (Lavelle p. 78). Today's job cuts are not solely about large, sick companies trying to save themselves, as was often the case in the early 1990s (e.g., IBM, Sears). They are also about healthy companies hoping to reduce costs and boost earnings by reducing head count (e.g., Goldman Sachs and AOL). [...]
[...] The downsizing plan the Restructuring Improvement Plan (RIP) was to improve the bank's competitiveness by reducing costs, instigating a sales culture, and installing new technology. RIP eliminated 350 branches and 10,000 employees, although 4,500 new jobs were created in the central processing sites. RIP involved a "spill and fill" process in which all staff lost their jobs and had to compete for the jobs remaining in the new structure. It was like a giant game of musical chairs, with about 20 percent fewer chairs than people. [...]
[...] Those that make up the backbone of the knowledge economy, and that are most likely to downsize as part of their structural changes (as opposed to downsizing due to failure). This spells trouble for the economy over the course of the next generation. WORKS CITED Ansberry, C., (2001) “Private resources: By resisting lay-offs, small manufacturers help protect economy." The Wall Street Journal July: A1-2. Business Week. (1994) "Why pink slips don't necessarily add up to productivity hikes." 4 July: 20. [...]
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