Academic journal article Journal of Behavioural Sciences

Association of Downsizing with Survivor's Organizational Commitment, Work Motivation and Psychological Well-Being in Secondary and Tertiary Sectors of Economy of Pakistan

Academic journal article Journal of Behavioural Sciences

Association of Downsizing with Survivor's Organizational Commitment, Work Motivation and Psychological Well-Being in Secondary and Tertiary Sectors of Economy of Pakistan

Article excerpt

Organizational downsizing has become an integral part of economic life. Organizations have been globalized and resultantly, 'Jobs come but they soon go again' (The Economist, 2008, p.5). Current business challenges, increased oil prices, political instability, economic recession and globalization have made the right sizing of human resource obligatory for the survival of an organization. Business organizations are susceptible to costs and benefits to produce optimal returns. The expenditure on manpower is invariably targeted as cost reduction measure. But 'Insensitive firing hurts more than just employee' (The Wall Street Journal, 2008). Grunberg, Anderson-Connolly, and Greenberg (2000) declare these dismissals as distasteful and stressful torment with a lot of implications for all stakeholders, especially for survivors. The employees who remain with the organization after downsizing are known as "survivors", and are responsible for new business performance and ultimately the success of implementation of restructuring (Baker, 2006). As per Good (2005, cited Chipunza & Berry, 2010), survivors are the greater looser than those laid-off, because they have to bear cynicism, irritation and in general have a perception of being insecure. Research (e.g., Noronha & D'Cruz, 2005) shows that in the new situation emerged after downsizing, an organizational triumph depends on the well-being of the survivors in terms of their attitudes, loyalty and eagerness to work. The question, to how to reconcile survivors' needs with leaner organizational imperatives, can only be answered if an organization is aware of attitudinal and behavioral needs of its employees and in turn implement downsizing process and strategies acceptable to all stake holders with an extent to produce minimum organizational disorder. Researchers like Cascio (2002), call for "responsible restructuring" with a focus on considering the employees as assets not the costs

Unlike developing countries, organizations in European countries normally exercise codes and lawful structures that proactively deal with downsizing process to safeguard employee rights. Organizations ignore these laws and psychological and behavioral states of survivors remain hidden. As per Noer (1993), this may result into minds of survivors, a sense of uncertainty and perception of defiance of a tacit psychological contract between employee and employer. Being a developing country, Pakistani organizations, especially in secondary and tertiary sectors of economy, have developed the same problem. So from time to time, a lot of organizational changes in the form of downsizing, amalgamation, privatization and even disbandment have been observed. As per Carpenter (2012), secondary or industrial sector of the economy creates a refined, tangible product: manufacture and production while taking output of primary sector (raw material) as their input. The tertiary sector represents the service industry.

Kozlowsky, Chao, Smith, and Hudland (1993) declared downsizing a deliberate organizational design which reduces the manpower and is planned to improve organizational performance. It is an approach that influences the workforce size, operational costs and work processes (Appelbaum, Patton, & Shapiro, 2003; Fisher & White, 2000; Hopkins & Hopkins 1999). Thus just like "rightsizing" and "reengineering", downsizing is a class of management tools for attaining desired change. As per Schraeder, Self, and Lindsay (2006), organizational aims like; cost reduction, productivity enhancement, responsiveness to competitive pressures, and consolidation after acquisitions and mergers may guide organizations to downsize. Prior research on impact of downsizing includes some pro and more counter arguments. Freeman and Cameron (1993) and Tomasco (1990) conclude that the assumed benefits of downsizing incorporate quicker decision making, larger flexibility, improved quality and better efficiency and productivity while Marks (2006) and Kulkarni (2008) call it harmful due to job insecurity, decreased trust in management, decreased loyalty, breakdown of communication and more intentions to leave. …

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