The Human Cost of a Management Failure: Organizational Downsizing at General Hospital

The Human Cost of a Management Failure: Organizational Downsizing at General Hospital

The Human Cost of a Management Failure: Organizational Downsizing at General Hospital

The Human Cost of a Management Failure: Organizational Downsizing at General Hospital


This book presents a unique, in-depth examination of the effects that the popular approaches to management organizational change - downsizing, restructuring, and reengineering - had on a major American hospital. The Human Cost of a Management Failure shows what can happen when management insists on accomplishing its ends strictly by the numbers. The authors ask why top management so often, and with seemingly such a cavalier attitude, selects downsizing and similar methods when research indicates that they are all too often such poor choices. Based on a year-long longitudinal study, Allcorn, Baum, Diamond, and Stein report on their interviews with 23 senior and mid-level hospital administrators, then interpret their findings from a psychoanalytic perspective, to make clear that the human side of the workplace can only be ignored at great risk. This is essential reading not only for corporate management, but also for other professionals and academics throughout the social and behavioral sciences. Readers of The Human Cost of a Management Failure are oriented to the literature on downsizing, restructuring, and reengineering, and to the context of the study. Case material follows, enabling readers to draw their own conclusions with regard to the nature of the organizational change and its effects upon the hospital's employees, and consultants offer their own viewpoints. An update of events at the hospital after the study was conducted is provided along with summaries by each author of his own interpretation and how he interprets the others' views. In this way, readers will get an unusual opportunity to evaluate their own viewpoints against those of the psychoanalytically trainedresearchers, and to decide for themselves whether there are, in fact; better ways to make an organization economically competitive in the marketplace.


During the past thirty years, American industry has witnessed phenomenal change—driven by international competition, swings in economic cycles, and changes in government policy ranging from protectionism to the promotion of competition and free trade. Change is just about the only thing that is assured (Vaill, 1989).

During these times, executives, consultants, researchers, and students of management have witnessed the coming and going of many ways to manage change—to gain and keep a competitive edge. Management by objectives (MBO) and a myriad of Japanese-like approaches have come and gone. In their place are management techniques that promise to have more staying power because they represent cultural change, such as total quality management (TQM), or they promise broad systemic solutions that revolutionize work, such as organizational restructuring and business process reengineering (BPR). Yet another popular approach to managing change that sounds good enough to help manage stock values is downsizing.

Announcements of downsizing, restructuring, and reengineering have become an everyday occurrence during the past decade. Some large organizations have announced personnel cuts as high as 50,000, although few details and time frames are provided. Blue-collar and, more recently, white-collar jobs are being eliminated in the seemingly endless pursuit of becoming “lean and mean.”

Downsizing and restructuring seldom occur by themselves. If an organization is to have fewer employees who accomplish more work and assume a customer focus, they must work better and smarter, and thus enters BPR, which restructures work. It is critical to rethink how work is performed as attrition, layoffs, early retirements, consolidations of departments and roles, and the elimination of layers of management

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