Survivors' reactions to downsizing: the importance of contextual factors

Abstract

Downsizing has been a recurrent theme in corporate life for the last 20 years. Literature in this area has evolved sporadically and covers many aspects of it. Although this has resulted in rich data, there is a lack of robust research that integrates the strategic and operational elements of downsizing. Furthermore, downsizing results in negative outcomes such as loss of skills, learning and innovation. It can also result in negative emotions including anger, frustration and guilt. However, there is insufficient data about the specific conditions or contextual factors that influence survivors reactions. This article presents the findings of a study conducted in four large organisations in the UK that have undergone downsizing. It proposes a theoretical model encapsulating the organisational context, and argues that the two key factors that determine the context are frequency of downsizing and the degree of control that the organisation exercises in making the decision to downsize. A broad set of propositions is presented as to the likely reactions of ‘survivors’ in the various organisational contexts of downsizing.

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