The article critically examines the
strategies of "Rightsizing Vs Downsizing" in organizational
management. It dissects the fundamental differences and implications of these
approaches. Rightsizing emphasizes aligning organizational structure with
long-term objectives, fostering flexibility and growth. In contrast, downsizing
prioritizes immediate cost reduction, often involving workforce reduction to
mitigate financial challenges. The article highlights how rightsizing nurtures
talent and culture retention, whereas downsizing can adversely impact morale
and company culture.
It emphasizes the importance of a
comprehensive perspective, considering the potential consequences on employee
welfare and strategic goals. Ultimately, the article aids decision-makers in
making informed choices by providing insights into the multifaceted
considerations surrounding these organizational strategies.
SIGNIFICANCE
The article holds significant
value as it dissects the "Rightsizing Vs Downsizing" stpntegies,
offering insights crucial for modern organizational management. As businesses
continually adapt to evolving markets, understanding the implications of these
strategies is pivotal. The article highlights how rightsizing aligns organizational
structure with long-term goals, fostering adaptability and sustainable growth.
Conversely, downsizing, focusing on immediate cost reduction, can detrimentally
impact employee morale and company culture. By delving into these strategies,
the article equips decision-makers with a comprehensive understanding of their
consequences. This knowledge aids in informed choices, balancing short-term
financial goals with long-term organizational health. Ultimately, the article
empowers leaders to navigate changes effectively, optimizing resource
allocation.
In order to familiarization with the
employees of National & Multi-National Companies, a journey towards
business excellence exponentially through proactive employees, professional
tips are being introduced from my side to retain in the Organization and to get
success everly to using deontological & consequential approaches under
utilitarianism to execute it and to accomplish related tasks / targets &
goals.
First of all joint yourself with those
experts & professionals on the same mission as you, to justify your journey
towards right direction. To be a Champion in your relevant
field, always determine and set your tasks & goals after finding gaps, loop
holes, SWOT & PEST analysis and then make sure “Inspirational
Plan & Strategy” for its execution to using your entire mental
& physical efforts and remember that don’t stop struggle until you get
desired results. So, accept the challenges to removing all hurdles, obstacles
& hindrances in a strategic way which may cause to compete you. If you
aspire to achieve desirable consequences then add value towards its direction
and as well as diversify your revolutionary dynamics to attain determination.
Always focus your factual fundamentals to sustain related systems having
analytical skills because quantitative analysis makes you active while
qualitative analysis makes you proactive to attain authentic consequences for
further decision and to take action. Your strategic and normative actions
against decisions determine your net worth. As you are aware, that wonderful
worth requires well performance beyond and above consistent struggle to attain
predictable tasks / targets & goals. Hence, treat your talent, potential,
physical & mental strength and energy towards its rationalization and
transformation through training, extensive performance and value addition for
the betterment of Organizations.
Both rightsizing & downsizing and
are done for the monitory maximization in the Companies.
RIGHTSIZING
Crux of Rightsizing in the Company.
Rightsizing refers to the process of
restructuring & rationalizing an Organisation by cutting costs, reducing
employees strength, to maintain efficiency and properly equip the Company to
meet its objectives after proper evaluation / assessment of the Employees /
Positions, SOPs, GMPs, Services, Systems and Processes.
Most of the Companies believe that
restructuring is the tool to save the cost and cost voidance.
Companies consider that maximum quantum
or 50% of respondents indicate cost‐reduction in context of restructuring.
Due to Organizational, Worldwide slow
economic conditions and intense global competition, extreme pressure of
downsizing may cause in Liberalization, Privatization & Globalization (LPG).
OBJECTIVES OF RESTRUCTURING
The objectives of restructuring the
organization make sure it to improve profitability, cost savings, refocuses
mental & physical efforts on transforming demographic markets and strategic
directions, incorporate new markets, products, services, and production
facilities, accommodate new growth areas and opportunities, enhance
communication for the betterment of Organization.
It is strategic act of changing the
business model of an organization to transform it for the betterment.
Organizational restructuring can help
Organizations become more efficient by streamlining processes and eliminating
unnecessary roles and tasks.
With the right key roles and tasks into
the concerned processes and as well as with the utilization of following
superlative factors a Company can restructure it accordingly.
1).
Knowledge
2).
Skills
3).
Ability
4).
Expertise
5).
Experience
6). Mental Effort
7). Physical
Effort
8). Effective
Communication
9). Essential Duties
10).Responsibilities
11).Major Authorities
12).Miner Authorities
13). Working condition
BENEFITS OF RIGHTSIZING
Increased Efficiency
By the streamlining processes and
eliminating unnecessary roles and tasks, a Company can restructuring to make it
more efficient.
Decreased Cost
Cost saving is one of the most
important benefit of organizational restructuring, as it allows the Company to
reduce its overhead expenses and increase efficiency without reducing employees
strength.
Improved Employees’ Morale
Organizational restructuring not only
helps to reduce costs and increase efficiency but it can positive influences on
employees’ morale. According to their exact roles and tasks assigned by the concerned
HODs / Organization they can feel more empowered.
Effective Communication
Restructuring can help to make
effective communication in the Organization through direct access with seniors.
Hierarchies
According to business nature, most of
the Companies set the Hierarchies horizontally and vertically in context of
restructuring for the effective communication.
New Business Opportunities
In context of entrepreneurial skills,
Organizational restructuring allows businesses to identify new areas of growth
and opportunities that they may not have previously explored. Restructuring can
free up resources and release blocked potential.
Adoption of Technology
Organizational restructuring is also a
great opportunity for businesses to adopt new technologies. By restructuring
companies can free up resources to invest in cutting-edge technology that will
improve the efficiency of their operations.
DOWNSIZING
Crux of Downsizing in the Company.
a) Due to Organizational, Worldwide slow economic conditions and intense global
competition, extreme pressure of downsizing may cause in Liberalization,
Privatization & Globalization (LPG).
b) Most of the Companies believe that downsizing is the tool to save
the cost and cost voidance.
c) Companies consider that maximum quantum or 50% of respondents
indicate cost‐reduction in context of downsizing.
d) Usually downsizing refers to intended reduction in order to attain
expected levels of Organizational, Occupational and Individuals’ inputs &
productivities with a view to attaining expected levels of net present value.
Objective of Downsizing
To eliminate all unnecessary Employees / Positions or SOPs, GMPs,
Systems and Processes from the Company. For the sack of cost saving.
Conceptual Framework
Poor economic Conditions:
Poor economic conditions in the Organizations may cause of downsizing.
Merger:
Downsizing may also occur during a merger between mutual consent of two
companies.
Restructuring:
In order to increase profit and maximize efficiency, restructuring in
the Conpanies may cause of downsizing.
Cultural Change:
Cultural change in the Companies may cause of downsizing.
Change of Business Nature:
Shifting from manufacturing industry to service industry may cause of
downsizing.
Reduction in Overhead Costs:
Reduction in Overhead Costs may cause of downsizing.
Protection of Long-term Interests:
Protect long-term interests in the organizations may cause of
downsizing.
Automation & Technologies:
To gain competitive advantage from automation & technologies without
manpower it may cause of downsizing.
Industry Decline:
Lack of technologies, new inventive tools and resources, specific industries
face many crisis and may cause of downsizing.
Rise in Labour Costs:
Rise in Labour costs may cause of downsizing.
Deregulation:
Deregulation in the Company may cause of downsizing.
Poor Financial Results:
Poor financial results of the Companies may cause of downsizing.
Change in Company’s Strategies:
Change in strategies of the Companies may cause of downsizing.
Change in Management:
Change in management of the Companies may cause of downsizing.
Change in Ownership:
Change in ownership of the Companies may cause of downsizing.
Innovation:
Improvement of innovation in the Companies may cause of downsizing.
Entrepreneurship:
Improvement of entrepreneurship may cause of downsizing.
BENEFITS OF DOWNSIZING:
Following are the benefits for downsized employees / ex-employees.
A) Reduce cost.
B) Increase productivity.
C) Ex-employees get relief from uncertainty of job.
D) Ex-employees get amount of their Final Settlements including
ex-gratia amount which becomes additional by the employer in context of good
association with the Company.
E) Ex-employees search new jobs for their career and betterment.
F) They Increase family attachment.
G) They gain benefit of Tax.
H) They avail the opportunities to enhance their interpersonal
& human skills.
DEMERITS OF DOWNSIZING.
B) Best employees try to get job on contract basis rather than permanent employment.
C) Severance may increase the costs rather than ex-employees’ productivities.
D) Workers protests may disrupt operations of the Company and downsizing become starts.
E) Company earns and bears a bad reputation in surrounding of the society.
F) Demoralization increases among those employees who stay in the Company.
G) Exiting employees feel uncertainty about their jobs.
H) High fidelities of exiting employees don’t remain for the Company.
I) Exiting employees remain unpleasant in the Company and they don’t feel pleasure to do job.
J) Company bears the Loss of brand and positioning in the society.
K) Some ex-employees may be driven to suicide.
L) Downsizing eliminates the employee‘s sense of security.
M) Downsizing decreases the productivity and quality of work.
E) Remove all those outsources services i.e Employment, Call Center, Security etc. are not directly related to the core activities of the business.
To make sure the analysis for the Company behind bad, poor, low and
inappropriate outcomes as compared to expectation of need. Might be causes
linked to inadequate customer support, inferior quality of products and
services in the face of competition or such results are the based on economic
crises. After this completion of analysis, a Company would be able to apply the
method of downsizing as per its condition.
On-duty Employees Motivation
There should be moral duties of the Top Management of the Company to
encourage and motivate (in context of intrinsic & extrinsic rewards) to
those employees / professionals who retained through the downsizing process but
were not directly affected by it.
Support to all the team members so they understand the strategic
decisions of downsizing in the Company made and stay aligned with the
management during the change period.
Investment in Expansion & Modernization
CONCLUSION
25% salaries amount of downsized
employees ought to be distribute equally as extrinsic reward for the
encouragement and motivation among those employees / experts &
professionals who retained through the downsizing process but were not directly
affected by it. Downsized employees must handover complete charge of their
Assignments, Company’s related Stock, Software Access, Logins, Accessories,
Documents & Files etc. (if any ) in their possession before the completion
of downsized notice period to the satisfaction of the concerned HODs. Amount of
Final Settlement should be paid to downsized employees at the time of
separation. Keeping in view of existing employees Knowledge, Skills, Ability,
Expertise, Experience, Effective Communication, Essential Duties,
Responsibilities, Major Authorities, Miner Authorities, Working condition and
Value Added Work, restructuring & rationalizing of the Organization ought
to be make sure to improve profitability, cost savings, refocuses all sort of
arras for its betterment.
Rightsizing Vs Downsizing
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