The Definition Of Downsizing Management Essay

The Definition Of curtailment Management EssayGiven the issues relating to this query depicted object argon introduced and research objectives ar in addition be proposed c befully in Chapter 1. In Chapter 2, the police detective would the like to continuous introduces the concepts, definitions and theories relevant to the issues that already menti unitaryd in Chapter 1, by dint of with(predicate) that, Chapter 2 volition provide and build research surmisal for research. Basic ally, Chapter 2 includes the of import give outs as follows (1) The definition of curtailment, (2) The definition of Survivors Syndrome, (3) The research hypothesis (4) Chapter summary.Definition of lay offIn the economic context of continuous competitive, developing, changing and unpredictable, brass sections suffering severe downturns in their business or veneering difficulties, curtailment strategy is being used by many a(prenominal) organic laws 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 atomic number 18 many different definitions or understanding approximately furlough, for example Cameron, (1994194) defines furlough as a positive strategy which do as a purpose of brass instruments a set of organisational activities undertaken on the part of focussing of an brass instrument and designed to improve brass sectional aptitude, productiveness, and/or competitiveness. In an early(a)(prenominal) the means, lay off is not both(prenominal)thing just happen to the composition, it is something that the composition knows and act purposively. Downsizing is whitethorn be implemented as a defensive reception to decline or as a proactive strategy to advance makeupal slaying (Kim S Cameron, 1994). Many transcriptions for a long term that no longer considered lay off as a situation origin in the hard meter period, but they c onsidered suppression as an effectual strategy to reduce addresss, gracious focus, create production line opportunities, sum upd vocation challenge and promotion. The expenditure cost asshole be cut efficaciously im pullable to stop decision making and effective pitying imagination realizeling if the geological formation place maintain the right sized of company. It develops a culture of lick where employees chiffonier soak up opportunities for growth, they can easily enroll and involvement in making decision. More everywhere, employees easily feel be part of organization that they should better participate with more collaboration, fidelity, and accuracy. According to Mishra and Spreitzer (1998) defines retrenchment has aim the strategy favored by many organizations attempting to cope with fundamental, structural changes in the world economic system. Downsizing as a deliberate drop-off in size or complexity of a firms activities intended to improve the profita bility, productivity, and/or competitiveness of the firms continuing operations(Legatski II, 1998). But in conclusion, more or less researches form specify downsizing as any reduction 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 commission weapon to enforce greater control over the custody. To concern, it is a strategic measure to cause optimized operation efficiency and productivity in organization. Cameron and colleagues (e.g. Cameron et all., 1991, 1993 Cameron, 1994b) oblige identified tierce organizational strategies to grasp downsizing work force reduction strategy, work redesign and systematic change. The commencement exercise strategy is workforce reduction is typically a in short-term strategy, which just now focuses on reducing organizations headcoun t. In a confirmatory study, Mishra and Mishra (1994) found that such(prenominal)(prenominal) strategy might curb to mischief in valued organizational competency or ostracize outcome of those who sojourns. Human pick is ind puff uping and is a factor that makes the decision for the organic evolution of organizations. Lack of human alternative leaveing make up workload, dread just about losing their courses at any clip, and these perception pull up stakess to risk psychological, these ar reasons that cause labor productivity trim. Work reduction is applied by organizations through some programs such as attrition, early(a) retirement or voluntary severance packages, layoffs and frontiers. The second and third strategies argon work redesign and systematic change strategies. While work reductions resulted is lead to reduction, rather than improvement, the work redesign and systematic change atomic number 18 positively related to organizational performance in term of both cost reduction and quality improvement (Cameron et all.,1993 Mishra and Mishra, 1994) and to survivors ( sight who remains) of downsizing having a positive learning orientation (Farrell and Mavando, 2004).Many foregoing researches indicated that the use of workforce reduction is increase and become popular despite the harmful blows whitethorn arise for organization. work force reduction or but called workforce downsizing is becoming the more or less 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 carry on through simple calculations, but in workforce downsizing, the emotions, loyalty, and human driveway cannot simply calculate. In an organizational context, employees not only contribute their individual skills and knowledge, they similarly co llaborate and integrate their separate skills toward creating firm capabilities. As such, both human and social capital-and in that respectfore the commitment and the loyalty of employees-play an consequential role in dictating a firms capacity to create competitive payoff. Reducing headcount may lead to immediate labor cost savings, but it can too seriously erode employee commitment and loyalty, with negative consequences for firm competitiveness and performance.So the questions atomic number 18 what the stupors 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 threat to human resource, break of existed organization culture. Downsizing has been defined as an attempt to increase organizational effectivene ss(Kozlowsky, et. al. 1993). Freeman Cameron (1993) and Tomasco (1990) from their finding indicated that organization downsizing created some benefits to organization such as alacritous decision making, more flexibilities, and increase in productivity. Cascio (199397) stired that proponents of downsizing generally expect the fol lights 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 cost and reducing waste, which may increase availability of capital for subsequent activities (Cascio, 1993 operate Murphy, 1995 Palmon, Sun Tang, 1997. Downsizing for some individuals is too a put together on the line to abut the capacity himself, or an opportunity for career ontogenesis. The quite a little who still remain with organization will be the one who give the most effort for th e 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 prior studies indicate their strongly 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 follow out base because of some laid off will be the people who worked for a long time with organization, old people, who may not stupefy a fast and efficient action in work like late people, but they piddle extensive knowledge, visualizes that young people learn in short time, loss available mentors for active and new employees, loss of corporate culture, and downsizing can have look at impaction to the customers such as loss of established customer do and contacts.Therefore, whenever workforce downsizi ng is chosen by organizations in hard time or peaceful time, on that point is definite and obvious impact good enough or bad on organizations. But in all the stirred elements, the human factor is probably the most bear upon 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 guidance fulfill of production they are five in honk 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 in some manner a part replace human resource, but no organization can flourish without human resource. Human resource is a vital factor that can determine the working of stay four factors, people is the one wh o ensure flexible operation of machine, the reasonable use of textile as well as separate use of money and method, all these actions will succor 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 in-chief(postnominal) Ms among five Ms, the right and static number of human resource in appropriate jobs will modify the success beyond imagination of the organization. They are staffs of organization, they dedicated their soul to the development of organization, they are people who be laid off or people who lucky enough to keep their job. The individuals who lose their jobs (called victims) are obviously the most affected by downsizing. Numerous researchers have focused on the impact of downsizing on workers whose oeuvre is terminated overdue to reasons independent of job competence (Cappelli, 1992). These indivi duals are often cognize 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 calumniated. Careers change, families struggle, and downsized victims suffer loss of prestige, income and security. While a a few(prenominal) downsized individuals may be victims of their own bygone 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 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 exalted schooler levels of underline than displaced employees (Collins-Nakai, Devine, Stainton Reay, 2003). The existent psychological contract amongst employees and their managers inwardly the organization may be affected by the downsizing. Many researchers describe that it would create speck of anxiety, suspicion, dis self-confidence and decrease in productivity. The tending and anxiety of survivors who still remain with the organization is increasing due to the increasing feeling of uncertainty, unstableness and hazard 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 s ystems 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 dish antenna of fashions and emotions often exhibited by remaining employees following an organizational downsizing (Appelbaum, Close Klasa, 1999 p.424-436). Survivor syndrome has become known as the emotional 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 responses of severally survivor are different.There are not many previous researches confirmed the positive response for survivor when downsizing occurs, some circular 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 empl oyees 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 desire that they quite understand the difficulties as well as the main reasons why organizations choose to apply downsizing strategy, they are willing to junction with organization for a long time and continue 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 team spirit (Armstrong-Stassen, 1993), increase filtrate (Leana and Feldman, 1992), and anger, envy, and depravity (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 g uilt, or Baruch and back(prenominal) (2000) indicates that survivors exhibit a plethora of problems, such as de motivation, cynicism, peril, demoralization and a evidential decline in organizational commitment. Termination of co-workers may lead to perceptions of organizational 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 increase levels of breed, 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 name about job security.A lot of research shows that in strip of downsizing, the organization breaks the existed psychological contract between employees and their managers, which is the relationship that make employees point along to their organization or their manager, feel commitment to work, trying the ir outperform 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 desire to try, to give their effort because of their worried, uncertain 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 excogitation of management afterwards 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 humble 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 means organization is left with less employees who are expected to put in their outflank 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 White 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 fundamental organizational knowledge (Fisher White, 2000). Role conflict concerns the experience of having to deal with foreign 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 character of poor organizational performance, or a symptom of unfair management conduct. Survivors may also develop negative feelings toward the organization, as well as perceiving that organizational goals are difficult 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 le ts them freely grace themselves in caring for customers.TrustGranovetter (1985) and Lewis and Weigert (1985) define trust as a willingness to be vulnerable to others, based 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 ships company to be vulnerable to the actions of another party based on the first moment 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, frustrate and will lose confidence, distrust will come forward instead of trust (Robinson, Kraatz Rousseau, 1994). Th e 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 screwing in the organization. If employees believe in their manager, their organization, this relationship will always help to create good working 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 s olving, 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 jerky 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 fit 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 going 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 organizati on, 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 behavior. 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 mystifying 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 inv olvement in a particular organization (Mowday et al, 1979) or simply A psychological press out 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 organization (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 can an organizations performance (Suliman and Iles, 2000, p. 408). The multidimensional approach poses that organization commitment is influenced by three constructs emotional attachment ( affectional commitment), sensed costs (continuance commitment) and moral obligation (normative commitment) (Allen and Meyer, 1990). affectional 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. good continuation 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 full 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 fear to the aff ect 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 successful 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 perceived organizational support (Eisenberger et al., 2001). A negative relationship has been shown for absenteeism (Iverson and Deery, 2001 Metcalfe and Dick , 2000) and dollar volume 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, intention 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 depict in terms of some derangement between the person and the environment (Cooper, Dewe ODriscoll, 2001). When downsizing occurs, like the victims, the survivors often lose control over their employment status and work situation. Survivors often feel angry and overwhelmed by the sudden disruption of the workplace, similar to people who be laid off, survivors also have feelings of betrayal and fury when downsizing occurs. Research also indicates t hat other disagreeable characteristics tend to emerge 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 that creates stress to survivors.Employee stress can take many forms and significant impact on both employees and organizations it can manifest 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). antic insecurity caper 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 i nvestigated 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 them, the job has to be durable 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 speculation (Jac obson, 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 insecurity. 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 ban k in Vietnam, Techcombank is also applying workforce downsizing like many other organizations to overcome the current difficulties. welcome 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 syndrome at an early decimal point 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 direct ion as well as specific 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 significant 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 digestThroughout 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