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Causes and consequences of downsizing: Towards an integrative framework*

Published online by Cambridge University Press:  02 February 2015

Franco Gandolfi  and
Magnus Hansson
Franco Gandolfi
Affiliation:
School of Global Leadership and Entrepreneurship, Regent University, Virginia Beach, VA, USA
Magnus Hansson
Affiliation:
Centre for Empirical Research on Organizational Control, Örebro University, Örebro, Sweden
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Abstract

The business literature on the causes and consequences of downsizing has grown significantly over the last three decades. A multitude of causes has been identified. Downsizing is sometimes seen primarily as a cost-reducing response to various crises and external factors over which management has little or no control. Others see downsizing as a strategic management initiative in its own right. A considerable body of literature indicates workforce reductions often lead to negative financial and operational outcomes for the downsizing firm as well as negative psychological outcomes for victims, survivors, and executioners. This research paper represents a literature review on the causes and consequences of downsizing. It addresses a diverse body of literature and suggests an integrative framework on the typical causes and consequences of downsizing as well as outlines some challenges ahead for researchers seeking to advance the knowledge of downsizing.

Keywords

downsizingcausesconsequencesliterature review
Type
Literature Review
Information
Journal of Management & Organization , Volume 17 , Issue 4 , July 2011 , pp. 498 - 521
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2011

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