Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

WE302 > Employment Restructuring > Flashcards

Employment Restructuring Flashcards

1
Q

Downsizing

A

conscious use of permanent personnel reductions in an attempt to improve efficiency and/or effectiveness (Budros, 1999)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Why sick companies downsize

A
  • Reactive
  • Cost reductions
  • Recession/trading conditions
  • Survival strategy
  • Technological advancements
  • Decline in performance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Reactive

A

response to changing environmental conditions and decline in firm performance (Wilkinson et al., Sage 2019)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Cost reductions

A

reducing size of workforce can lead to lower labour costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Recession/trading conditions

A

adjust to market demand and declining revenues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Survival strategy

A

streamline operations and respond to industry, market conditions (globalisation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Technological advancements

A

automation and digitalisation can lead to workforce reductions as new technology improves efficiency and productivity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Decline in performance

A

downsize due to inefficiencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why healthy companies downsize

A
  • Proactive downsizing
  • Organisational agility
  • Cost management
  • Boost earnings
  • Growth and expansion
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Proactive downsizing

A

not an immediate threat or need to cut costs but enhance performance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Organisational agility

A

downsize to become more agile/responsive to changes in the business environment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Cost management

A

to control expenses and maintain sustainable profitability, by eliminating inefficiencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Boost earnings

A

downsizing can increase profitability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Growth and expansion

A

may downsize in certain areas in order to invest in new growth opportunities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Benefits of downsizing

A
  • Cost savings
  • Improved efficiency and productivity
  • Responsiveness to customers
  • Innovation
  • Greater employee involvement
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Drawbacks of downsizing

A
  • Employee morale and engagement
  • Decreased productivity
  • Talent retention and recruitment
  • Loss of knowledge and expertise
  • Impact organisational culture
  • Decreased customer satisfaction
  • Resistance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Methods of downsizing

A
  • Natural attrition and employee turnover
  • Voluntary redundancy
  • Retirement
  • Compulsory redundancy
18
Q

Natural attrition/wastage

A

o avoids potential conflict, people leaving voluntarily and not replaced
o best option for employee well-being
o short term savings might be modest
o employer has little control over who leaves or when
o could impact on remaining employee workload and morale
o Incremental nature (gradually over medium/long-term)

19
Q

Voluntary redundancy

A

o allows firms to save costs while trying to protect employee well-being
o however, volunteers might be employees the organisation wish to retain
o often taken up by managers out of fear of dismissal without any financial help
o employees with high absenteeism and low commitment are often interested

20
Q

Cost savings

A

downsizing can reduce operating expenses leading to increased profitability and financial sustainability

21
Q

Improved efficiency and productivity

A

as a result of better communication and faster decision making

22
Q

Responsiveness to customers

A

can help companies become more responsive to changes in the business environment and customer demands

23
Q

Innovation

A

downsizing can create a more innovative, entrepreneurial culture within the organisation, as employees are challenged to think creatively, take risks, and explore new ideas

24
Q

Employee morale and engagement

A

downsizing can lead to lower morale, job insecurity, and increase stress/anxiety of survivors

25
Q

Decreased productivity

A

due to increased workload

26
Q

Talent retention and recruitment

A

employees may feel less loyal to the organisation and seek other job opportunities out of fear of future lay-offs, can also become difficult to attract top talent if reputation is tarnished by downsizing

27
Q

Loss of knowledge and expertise

A

loss of valuable employees which can impact performance

27
Q

Impact organisational culture

A

erode trust and weaken team dynamics

28
Q

Decreased customer satisfaction

A

can affect service quality which can damage reputation

29
Q

Compulsory redundancy

A

o lay-offs are deemed necessary
 provide assistance and job search counselling
 minimal support, delivering more savings
o common in private sector and large-scale redundancies
o compulsory redundancy is rising in the public sector as voluntary redundancy and early retirement have been exhausted

30
Q

Firm level approaches Teague and Roche (2014)

A
  • Pure downsizing
  • Employment stabilisation
  • Responsible restructuring
31
Q

Responsible restructuring

A

o search for greater efficiencies becomes part of an ongoing cultural change
o often unlikely to deliver short-term cost savings
o Not time bound

32
Q

Employment stabilisation

A
  • prioritises maintaining job security, employee well-being during periods of change, uncertainty
    o aims to reduce the amount of work and the number of workers
    o more proactive in nature and requires organisations to redesign tasks
    o not a quick fix
33
Q

Pure downsizing

A
  • involves reducing workforce size to achieve cost savings without additional considerations for employee retention, engagement, or well-being
    o often used by the UK and US
    o quickly reduce the number of employees
    o often adopted in a crisis
34
Q

Alternatives

A
  • pay cuts
  • temporary layoffs
  • freezing wages, bonuses and recruitment
  • reducing overtime
  • diminishing opportunities for promotion
  • reducing expenditure on training and development
  • use of agency staff
35
Q

(Wilkinson et.al, Eds, Sage, 2019)

A
  • automotive parts manufacturer avoided redundancies during the recession due to the use of agency workers, providing flexibility so release agency workers without mass redundances
  • there’s been a shift towards market-led employment models, utilising flexible working arrangements could explain why downsizing is less prevalent
  • suggested that downsized firms doesn’t improve performance and that downsized firms are more likely to declare bankruptcy
36
Q

(Johnstone, Saridakis and Wilkinson, 2019)

A
  • significant losses in financial services, automotive and manufacturing
  • approach used, varies contingent on factors e.g., resources available, the business model, product and labour market conditions, organisation size
37
Q

Germany (Johnstone, Saridakis and Wilkinson, 2019)

A
  • Deeply affected but demonstrated relatively stable employment levels and fewer mass layoffs
  • Germany reduced working time
  • Overtime without additional pay allowing employers to increase capacity without additional costs
38
Q

UK (Johnstone, Saridakis and Wilkinson, 2019

A
  • UK government downgraded public sector pay and conditions
  • UK unemployment rose but was less serve than anticipated
  • Use of flexible working arrangements and alternative adjustments to reduce costs
  • E.g., BMW reduced working time
39
Q

USA (Johnstone, Saridakis and Wilkinson, 2019)

A
  • Mass redundancies
  • Rising unemployment
  • General motors required government bailout as it cut and froze employee pay, and terminated a large number of workers

WE302 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions