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  • Digg it UP - Downsizing is Akin to Amputation – It Creates Negative Side Effects

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    he core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with on

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    Downsizing is like an amputation, which removes part of one’s body but creates side effects such as low staff morale and bad reputation. If it is badly executed, it can wrench out the innovative spirit and loyalty of the staff. Downsizing and layoffs are part of the price of becoming more competitive. The price for not doing it, however, is much higher later if the issue is not properly resolved. It is not the only remedy available to the managers to improve a company’s performance. Other remedies include increasing the sales revenues and other cost control measures. However, the effect of the downsizing is more immediate and impactful.

    In the US, when the company is in trouble, it often commits corporate genocide by turning the guns on its own people. Subsequently, after a round of corporate genocide, it suffers from corporate anorexia, that is it trims itself to the core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with one

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    staff. Downsizing and layoffs are part of the price of becoming more competitive. The price for not doing it, however, is much higher later if the issue is not properly resolved. It is not the only remedy available to the managers to improve a company’s performance. Other remedies include increasing the sales revenues and other cost control measures. However, the effect of the downsizing is more immediate and impactful.

    In the US, when the company is in trouble, it often commits corporate genocide by turning the guns on its own people. Subsequently, after a round of corporate genocide, it suffers from corporate anorexia, that is it trims itself to the core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with on

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    managers to improve a company’s performance. Other remedies include increasing the sales revenues and other cost control measures. However, the effect of the downsizing is more immediate and impactful.

    In the US, when the company is in trouble, it often commits corporate genocide by turning the guns on its own people. Subsequently, after a round of corporate genocide, it suffers from corporate anorexia, that is it trims itself to the core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with on

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    when the company is in trouble, it often commits corporate genocide by turning the guns on its own people. Subsequently, after a round of corporate genocide, it suffers from corporate anorexia, that is it trims itself to the core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with on

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    he core by further cost reduction. Corporate anorexia can make you leaner and thinner but it will also weaken your body. All these are done in the name of maximising shareholders’ returns.

    There is a problem with one-size-fits-all downsizing. Good people also get fired. The ailing company is unable to attract good calibre staff to replace those who have left since its reputation in the marketplace is tarnished.

    Loyalty from the staff makes economic sense. This is because the loyalty of customers cannot be earned without first earning the loyalty of employees. Achieving long-term growth without building a strong loyal base of customers is impossible. Unfortunately with the spate of retrenchments and downsizing, loyalty factor quickly fizzles out amongst the staff. Many employees think that the companies that they work for are not worthy of their loyalty.

    There is no problem in removing the corporate fats, dysfunctional personnel or cancerous tumours in the company. In death threatening situations, it is better to amputate the diseased parts than to apply stitches and banda

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