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When responsible downsizing strategy meets employee-oriented leadership: Implications for downsizing performance

Published online by Cambridge University Press:  21 May 2014

Philip Cheng-Fei Tsai
Affiliation:
Department of International Business Administration, Wenzao Ursuline University of Languages, Taiwan, ROC
Chih-Ting Shih*
Affiliation:
Department of Business Administration, National Pingtung Institute of Commerce, Taiwan, ROC
*
Corresponding author. [email protected], [email protected]

Abstract

This study examines whether a responsible downsizing strategy and employee-oriented leadership are complementary in strengthening firm performance after downsizing. This study investigated 154 firms that have used an organizational downsizing strategy with surveys and follow-up focus groups. Results of both the empirical evidence and qualitative data demonstrates that for firms adopting an employee-oriented leadership style, the level of responsible downsizing strategy is high and firm performance is significantly increased. Specifically, the results of the focus groups indicate that a responsible downsizing strategy deepens the loyalty and faith of employees to their employer. These theoretical and practical implications are also discussed.

Type
Research Article
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2013 

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