The Importance Of Downsizing

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CHAPTER 1 RESEARCH BACKGROUND 1.1 Background of the Study Downsizing is a strategy that has been used very commonly by organizations during the last two decades to face the challenges emerged with the different competitive environments. Downsizing is a form of restructuring organizations in term of a workforce reduction to bring the required improvement in work systems, overhaul organization and establishing adequate human resources to maintain the business intensity (Kulkarni, 2013). Nowadays, competitive environments where most organizations are sometimes forced to restructure due to economic meltdowns, downsizing has proven to be a relevant strategy for organizations restructuring (Morton and Orman 2010). The main motivation of most downsizing efforts is the desire for an immediate reduction of workforce and increased the levels of efficiency, productivity, profitability, and competitiveness in organizations (Bhardwaj and Yadav, 2011). But somehow, downsizing as an implemented strategy has generated a great deal of interest among scholars, managers, and or decision-makers. For instance, some authors suggest that research knowledge about downsizing is still relatively underdeveloped (Macky, 2004), while others stress the confusion surrounding downsizing strategy (Gandolfi, 2008). The adoption of downsizing strategy has remained a popular mystery among all parties involved in organizations (Kennedy, 2005). In an effort to address this issue, Chu and Ip (2002)

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