Perceptions of Organizational Downsizing

Abstract

This paper uses cognitive dissonance theory as a foundation for developing hypotheses about how past experience as a layoff agent influences respondents' perceptions of organizational downsizing. Consistent with many theoretical frameworks in organization studies, cognitive dissonance is conceptualized as an unmeasured construct that mediates between layoff agency and perceptions of organizational downsizing. Perceptions of organizational downsizing are operationalized along four different dimensions. The hypotheses about the effects of layoff agency on perceptions of organizational downsizing are tested with survey data, using controls for the respondent's past experience as a layoff victim and the respondent's ideological beliefs about business. The results show partial support for the hypotheses, indicating that layoff agents see downsizing as more inevitable and less of a breach of the implied contract between employer and employee than respondents without layoff agency experience. The results also reveal persistent effects of respondents' layoff victim experience and their ideological beliefs on their perceptions of downsizing.

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