"Resizing the Organization: Maximizing the Gain While Minimizing the Pain of Layoffs, Divestitures, and Closings"

Mitchell Marks and Kenneth De Meuse

Organizational Dynamics

2005, 34(1), pp. 19-35

Resizing is a word that attempts to avoid the negative connotations now associated with downsizing, while reflecting the goal of "becoming agile, flexible, and proactive."

Resizing is occurring for a number of reasons:

• Globalization has led to job relocation
• Deregulation and denationalization have transferred huge organizations from governments to private ownership
• Technological changes have increased productivity or made certain businesses outdated
• The slowing economy led a number of businesses to look to resizing as a cost reduction approach
• Mergers and acquisitions have made some employees redundant

Some common psychological reactions to resizing are:

• Survivor syndrome (including guilt and depression)
• Loss of confidence in management
• Heightened cynicism
• Decreased morale
• Dismal outlook
• Loss of control

Some common behavioral reactions to resizing are:

• Working harder, not smarter
• Lack of direction
• Risk avoidance
• Political behavior and loss of team play
• Role ambiguity

Some principles of transition management recommended in the article are:

• Prepare employees in advance for the impending change
• Involve employees in the resizing process
• Communicate openly, honestly, and frequently throughout the resizing process
• Give employees an inspiring long-term vision, but not stretch targets
• Address the emotional side of the resizing process
• Take a long-term perspective

The article also provides a list of 10 guidelines for effective communication during organizational resizing:

• Recognize that communication will assume a larger role during times of organizational resizing
• Be positive
• Be honest
• Do not promise that things will remain the same
• Keep the promises you do make
• Talk specifics whenever you can
• Do not feed the rumor mill
• Listen for implied meanings and hidden agendas
• Remember the customer
• Over-communicate

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