Downsizing, Social Aspects of

Many people think that reducing the number of employees is necessary for the very survival of work organizations, what with the increasing global as well as local competition for markets for products and the need to reduce the costs of [Page 579]production. Certainly, employers who have downsized have attempted to legitimize it with this rationale. Undoubtedly, it can be and has been valid. Nevertheless, executives may simply believe that investors regard downsizing as necessary or advantageous to their interests, whether or not this is true. Alternatively, or in addition, in-house executives or troubleshooters from the outside believe that their own incomes and careers depend on appearing tough as well as efficient. Downsizing can then become a fad and produce bandwagon effects. Executives often reward one ...