Causes, Implementation, and Processes of Downsizing
(A literature Review of Corporate Downsizing: Part 2)

Authors: Franco GANDOLFI and Philip A. NECK

Published in: Vol:8 No.4 / 2007

      Corporate downsizing has become a strategy of choice by a multitude of organizations worldwide. The prime impetus for most downsizing activities is the desire to attain higher levels of efficiency, effectiveness, profitability, and competitiveness. The adoption of downsizing has shown to have considerable impact on the firm and its many stakeholders. There is strong evidence suggesting that the consequences of downsizing are persistently negative. Indeed, numerous firms in all industries around the world embarking upon downsizing have failed to accomplish their highly anticipated objectives. It has also been shown that the execution of downsizing is not confined to economic and organizational realms, but has profound after-effects upon all stakeholders. The second part of this literature review presents the relevant body of literature and clarifies the many mysteries and misconceptions associated with the causes, implementation strategies, and processes of downsizing.