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The effect of downsizing‐redesign strategies on business performance: Evidence from Australia
Author(s) -
Farrell Mark A.,
Mavondo Felix
Publication year - 2005
Publication title -
asia pacific journal of human resources
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.825
H-Index - 33
eISSN - 1744-7941
pISSN - 1038-4111
DOI - 10.1177/1038411105050309
Subject(s) - structural equation modeling , restructuring , workforce , business , revenue , process management , sizing , industrial organization , operations management , marketing , economics , accounting , computer science , finance , art , machine learning , visual arts , economic growth
This study investigates the effect of two downsizing‐redesign strategies on business performance. A survey of the top 2000 manufacturing organisations in Australia, as defined by annual revenue, was conducted, and data was analysed using a structural equation modelling approach (SEM). Evidence suggests that down‐sizing that drives redesign (reducing workforce size) has a negative effect on business performance. Conversely, redesign that drives downsizing (restructuring the organisation, redesigning tasks) has a positive effect on business performance.