Academic journal article Journal of Leadership & Organizational Studies

Layoff Agency: A Theoretical Framework

Academic journal article Journal of Leadership & Organizational Studies

Layoff Agency: A Theoretical Framework

Article excerpt

The current downsizing literature has neglected the cognitions and behaviors of layoff agents. In this article, layoff agents are defined as employees who assist in the implementation of layoffs in their employing organizations. The article develops a theoretical framework that focuses on the cognitions and perceptions of those individuals. This framework suggests that layoff agents have the potential to experience cognitive dissonance as a result of their layoff agency activities, and under some conditions they will seek to reduce that dissonance by altering their perceptions of organizational downsizing. The framework specifies variables that moderate the relationship between layoff agency and cognitive dissonance and also variables that moderate the relationship between layoff agency--induced cognitive dissonance and agent perceptions of organizational downsizing. The moderating effects of these variables are captured in a set of propositions suitable for testing in future empirical research on the psychology of layoff agents.

Keywords: cognitions; institutionalization; layoff agents; perceptions of downsizing

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The increasing use of organizational downsizing is interesting given the evidence that suggests the practice generally fails to achieve its intended financial outcomes and often generates negative consequences in terms of victim and survivor psychological and physiological stress (Cascio, 2005; Grunberg, Moore, & Greenberg, 2006; McKinley, Sanchez, & Schick, 1995). This raises the issue of why managers engage in organizational downsizing. A potential explanation for this phenomenon is that managers often hold favorable perceptions of downsizing. How such perceptions form in the face of equivocal evidence with respect to the effectiveness of downsizing is a significant research question that has been largely ignored in the past.

This article strives to address this issue by examining the cognitions of layoff agents, whom we define as any employee who "has ever assisted in the implementation of a layoff or downsizing initiative in an organization for which (s)he has worked" (Sronce & McKinley, 2006, p. 90). We focus on the factors that contribute to changes in these individuals' perceptions of organizational downsizing. Layoff agents' perceptions of downsizing are important because those perceptions can influence the way other employees view downsizing and indeed the overall institutionalization of the phenomenon (McKinley et al., 1995; Sronce & McKinley, 2006). Given that layoff agents are generally individuals of some authority in their organizations, working at middle management or higher ranks, their perceptions of downsizing will likely have an effect on other employees (Grunberg et al., 2006). Those employees may change their own views of downsizing to conform more closely to the perceptions held by the layoff agents. As downsizing diffuses in the corporate world, more and more employees are likely to be thrust into the role of layoff agent, and the perceptions of downsizing that these individuals develop will feed into the ongoing sociocognitive process that results in the institutionalization and objectification of downsizing (McKinley, Zhao, & Rust, 2000). Thus, by studying layoff agents' perceptions of downsizing and the factors that influence those perceptions we can begin to trace one of the cognitive foundations that contribute to the institutionalization of organizational downsizing (McKinley et al., 1995, 2000).

The body of this article is structured as follows. In the second section, we provide a brief review of the literature on organizational downsizing. The third section then develops our theoretical framework. In that framework we argue that layoff agency has the potential to bring about cognitive dissonance (Cooper, 2007; Festinger, 1957) in the layoff agent and that such dissonance has the potential to induce changes in the agent's perceptions of organizational downsizing as a general phenomenon. …

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