Strategic Management: Strategies for Responsible Downsizing


Downsizing, or rightsizing, is an integrated process that configures processes, products and people as a cost cutting measure. It is a phenomenon that is intended to re-engineer an organization for future benefits (Horngren, Foster and Dartar 237). Usually attributed to technological changes, downsizing is meant to enable long-term solutions. The present article stresses that there can be negative consequences to downsizing, in that the radical elimination of staff and customer freebies to cut costs may provide no advantages over a company that retains their assets. As Cascio states, “It is not possible for firms to”save” or “shrink” their way to prosperity” (p. 4).
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