A decade of downsizing: Understanding the contours of change in Australia, 1990-99

his paper seeks to map a decade of organizational downsizing in Australia utilizing a comprehensive longitudinal data set of 4153 firms. Aggregate downsizing measures conceal extensive change within organizations. We seek to assess these processes by comparing a conventional downsizing measure with more specific occupational downsizing measures. The results show the contours of change in Australia over the 1990s; indicate that there are distinctive and contrasting trends; and raise significant issues for future theoretical and empirical research.

The paradox of managerial downsizing

Delayering and the flattening of organizational hierarchies was a widespread trend through the 1990s. Peters (1992) in the USA promoted flattening as an organizational strategy and Keuning and Opheij (1994) promoted the prescriptions in Europe. Despite these strategies and apparent structural changes, the number and ratio of managers appears to have grown. This paradox of managerial downsizing has not been adequately probed in the literature. The predominant explanation, that there has been a 'myth of managerial downsizing', is associated with Gordon (1996). However, this debate has been shaped by the US experience and data. There is a need to reassess the dynamics of the 1990s in relation to other economies. This article focuses on a semi-peripheral economy, that of Australia. A study of the population of firms over time is necessary in order to resolve the issues. The article utilizes a comprehensive range of data, including several national surveys and a longitudinal database of all larger private-sector firms in Australia during the 1990s. The results indicate that the 'myth of managerial downsizing' must be rejected. There were dramatic effects on managers through the course of the 1990s in larger Australian firms. The dynamics of the process are analysed, tracking 4,153 firms across the decade and the paradox explained. The theoretical implications are discussed.

The downsides of downsizing: Communication processes and information needs in the aftermath of a workforce reduction strategy

This study explored the impact of downsizing on levels of uncertainty, coworker and management trust, and communicative effectiveness in a health care organization downsizing during a 2-year period from 660 staff to 350 staff members. Self-report data were obtained from employees who were staying (survivors), from employees were being laid off (victims), and from employees with and without managerial responsibilities. Results indicated that downsizing had a similar impact on the amount of trust that survivors and victims had for management. However, victims reported feeling lower levels of trust toward their colleagues compared with survivors. Contrary to expectations, survivors and victims reported similar perceptions of job and organizational uncertainty and similar levels of information received about changes. Employees with no management responsibilities and middle managers both reported lower scores than did senior managers on all aspects of information received. Implications for practice and the management of the communication process are discussed.

Job uncertainty and personal control during downsizing: A comparison of survivors and victims

This study developed and tested a model of job uncertainty for survivors and victims of downsizing. Data were collected from three samples of employees in a public hospital, each representing three phases of the downsizing process: immediately before the announcement of the redeployment of staff, during the implementation of the downsizing, and towards the end of the official change programme. As predicted, levels of job uncertainty and personal control had a direct relationship with emotional exhaustion and job satisfaction, In addition, there was evidence to suggest that personal control mediated the relationship between job uncertainty and employee adjustment, a pattern of results that varied across each of the three phases of the change event. From the perspective of the organization's overall climate, it was found that levels of job uncertainty, personal control and job satisfaction improved and/or stabilized over the downsizing process. During the implementation phase, survivors experienced higher levels of personal control than victims, but both groups of employees reported similar levels of job uncertainty. We discuss the implications of our results for strategically managing uncertainty during and after organizational change.