What do you understand by downsizing? What role does Human Resource play in the process? Is it downsizing, rightsizing or dumpsizing? Use a practical scenario to illustrate your arguments.

The study found correlation with the results of McKinley et al , 2000 and found that the relationship between downsizing frequency and financial performance appears small . For those companies which have implemented a series of small job cuts , it appears that it does not have a deleterious effect on financial performance . This finding may be explained by the institutional perspective

Also the magnitude of the downsizing appears to have little effect on the financial performance of a firm , unless the size of the layoff is very large . Contrary to what Cascio (1998 ) proposed

, the financial performance of firms laying off less than three percent of the work force were not significantly different than those companies laying off three percent or more . It is important to note that companies announcing large-scale (10 or higher ) layoffs continued to significantly under-perform those companies with downsizing announcements less than 10 ( De Meuse

The Bain study results revealed that nearly 2 ,000 ,000 workers were given layoffs during year 2002 in 20 ,000 separate events . Though such huge account was targeted for significant cost reduction , it produced many side effects and minimized the overall employee satisfaction as shown in the figure below Impact of Downsizing on employee satisfaction

Source taken from http /www .bain .com /management_tools /tools_downsizing .asp ?groupcode 2

According to Economic theory organizational downsizing has a positive effect on a company 's financial performance , as it enables management to cut costs and eliminate redundancies , and streamline other operations by fund diversification etc , So far this assumption stayed true as mangers believe it with the result of visible savings in salary expenses for the short period of time . One of the national survey found that managers in 75 of those companies which downsized believed performance did not improve "Pink-Slip Productivity " 1992 ) as cited in De...