The purpose of downsizing is to restore and reorganize organizations, causing improvements in work systems, redesigning the structure of the organization at all levels, and adapting a certain number of employees to maintain competitiveness in all organizations.
The term downsizing began to be used in the early 70's in the United States of America by an automobile manufacturing company to refer to the decrease in the production of automobiles in that sector, but it was not until 1982 that a major firm used this method in the personnel area and since then it has been applied by many organizations worldwide.
This practice was used mainly to solve financial problems, since they had excess personnel in their structures; now organizations have handled downsizing as an important tool in the management part, which helps them to change and adjust more easily to technologies, globalization and the redirection of business.
Currently, the reduction of personnel has become an almost universal practice, downsizing arose from the need to solve the problems generated by the growth of the size of organizations that made it difficult to make decisions and to adapt to new circumstances and the demands of employees. contemporary markets, as well as the increase in competitiveness, so it was necessary to think about the structures and decision-making in order to increase the speed of response and adaptation.
There were two types of downsizing:
The reagent tries to respond to change without having any previous diagnosis of the situation of the organizations, which creates problems such as periods of crisis, the reduction of personnel without previous studies and a bad work environment.
The proactive, which is the opposite of the reagent, in which results and effects are obtained more quickly, has a preparation process in case of changes in the environment and for its application criteria based on the rationale of the Business.
There are also negative aspects since its application generates unemployment, the operation is affected due to the elimination of some hierarchical levels and the environment in the workers becomes tense due to the fact that they live with the uncertainty of not knowing when they will be fired. which can be seen reflected in their performance and job performance affecting the work environment.
Bibliography
- Organizational Science, Vol. 4, No. 1 Focused Edition: Organizational Decline and Adaptation: Controversy Theory (Feb., 1993). Marketing Journal; May 2012, Vol. 76 number 3, p112-130, 19p, diagram 2, graph 6.
