Downsizing is efficient and effective and thus, a viable strategy for firms competing in a global business environment. Do you agree?

I. INTRODUCTION Companies that faced a decrease in sales, market share, or profits in the 1980s and early 1990s began to realize that their human resources were expensive and underutilized. Consequently, they gradually lower their payroll numbers in order to become more competitive in the market, locally or globally. For example, Mobil Chemical eliminated 2,300 jobs in a 1994 restructuring, blaming lower earnings and excess capacity (Kirschner, E. 1997). Other forces that promote downsizing include increased global competition (…

…become more competitive. In fact, the successful companies in their study not only reduced their work force, but also engaged in organizational redesign and systematic efforts at quality improvement (Hickok, T. n.d). Therefore, if downsizing is implemented appropriately and be proactive in counteracting employees' negative reactions created through work force reductions together with some other strategic approaches, there can be a positive relationship between downsizing and organizations' efficiency and effectiveness in long-term as well.