Personnel

Review Downsizing: is it always lean

27,4 and mean?
Nicholas Kinnie, Sue Hutchinson and John Purcell
296 University of Bath, Bath, UK
Caesar: ``Let me have men about me that are fat;
Received February 1997 Sleek headed men, and such who sleep o'nights.
Revised July 1997 Yon Cassius has a lean and hungry look;
Accepted October 1997 He thinks too much. Such men are dangerous."
(Julius Caesar, Act 1 Scene 2)

Personnel Review,
Vol. 27 No. 4, 1998, pp. 296-311.
# MCB University Press, 0048-3486
Introduction
Downsizing, and its associated euphemism, ``rightsizing'', became part of the
managerial lexicon in the late 1980s and early 1990s. Large scale redundancy
programmes were seen to be the solution to the problems facing organisations
such as AT&T, IBM, General Motors and British Telecom during this time.
By the mid-1990s, however, doubts were emerging about whether downsizing
was the route to success that it was first thought. Evidence emerged that
many downsizing initiatives had failed to achieve their objectives and the
anticipated gains had not been realised. In 1996, Stephen Roach, the US
economist, expressed severe doubts about the downsizing programmes which
he had previously advocated. One of the reasons put forward for this failure
was the way downsizing was handled (Roach, 1996). As early as 1994,
Business Week reported, ``The sight of so many bodies on the corporate scrap
heap is sparking a corporate debate about profits and legality, and about the
benefits and unforeseen consequences of layoffs'' (Business Week, 1994, p. 61).
In short, downsizing came to be associated with ``meanness".
Over the same period, there was considerable interest in the ``lean
organisation'', which was derived from the concept of lean production first
popularised by Womack and his colleagues (1990) and more recently by
Womack and Jones (1996). These writers claimed that by adopting techniques
such as total quality management (TQM), just-in-time (JIT) and team working
it was possible to produce more goods and services with fewer resources of all
kinds. Subsequent research has sought to extend the concept of lean
production away from its Japanese auto industry base and consider the
transferability of the concept to other sectors and countries (Oliver and
Hunter, 1994; Oliver and Wilkinson, 1994; Shadur and Bamber, 1994; Shadur
et al., 1995). However, other writers have developed a critique of the
assumptions in the original work, especially its approach to change and
treatment of human resources issues (Bergerren, 1993).
Some authors have pointed out that these two trends have been linked and
that downsizing was perceived as one way of achieving leanness. ```Lean' came
to be associated with using less personnel, and hence downsizing came to be
seen as a way to become `lean' regardless of the question whether or not
originally Japanese ways of working were used in the new `lean' organisation'' Downsizing: is it
(Benders and van Bijsterveld, 1995, p. 9). Similarly, Millman argued (1996, p. always lean and
9) ``Downsizing is invariably promoted under the guise of improving mean?
productivity and reducing organisational complexity, both being desirable
attributes of the lean organisation."
Despite these claims, the relationship between downsizing and the lean
organisation is problematic. In the first part of the paper, therefore, we pose 297
the questions: what is the relationship between downsizing and the concept of
the lean organisation? Is downsizing always lean? In the second part, two
related questions are pursued: what are the consequences for employees of
downsizing? Is downsizing always mean?
The research reported here is the first stage of a larger project currently
underway in conjunction with the University of Warwick, and supported by
the Institute of Personnel and Development, into the people management
implications of leaner ways of working. This first stage was based principally
on a study of the literature in the field together with some preliminary case
studies, which are not reported in this paper. A fuller description of the work,
together with brief details of the cases, can be found in Hutchinson et al.
(1996).

Is downsizing always lean?

As ever with words such as downsizing it lacks a clear definition, being
capable of conflating a number of very different circumstances when
organisations reduce the number of employees. For example, the definition
put forward by Cascio (1993, p. 96) as a ``planned elimination of positions or
jobs'' tells us very little and provides an inadequate basis for answering the
question posed. Furthermore, the literature in the field tends to concentrate on
the various ways in which these reductions in the workforce can be achieved:
redundancies (or ``lay-offs"), voluntary turnover and early retirement.
Our concern is not so much how workforce reductions are achieved as the
context and motives for such reductions: what are the forms of downsizing
and why does downsizing take place? Four different forms can be identified
together with their associated motives.

Forms of downsizing
Reductions in demand for products and services
The first form involves making employees redundant and not replacing them
with new jobs so that the numbers of employees decline. These workforce
reductions are often motivated by a desire to reduce costs because of a decline
in demand or increased competition in the marketplace. Cameron (1994) has
compared this form of downsizing to throwing a grenade into a room, closing
the door, and expecting the explosion to eliminate the desired percentage of
employees. This form is often the result of a top down directive implemented
over a short time period and is, according to Cameron (1994), typically
associated with a failure to achieve the set objectives.
Personnel Within the UK movements in the trade cycle and changes in the
Review competitive position of a firm have always led to fluctuations in both
27,4 workforce numbers and hours worked. In this sense downsizing is really a
new word for a long established employer practice. The word ``downsizing''
used in this context does, however, imply two important conditions for this
activity. First, the choice of redundancy, or collective dismissal as it is termed
298 by the EC Directive, is taken in preference to other forms of cost reduction
such as pay cuts (as in Hewlett Packard in the 1980s), hours reduction
(Volkswagen in the early 1990s), labour hoarding as commonly practised in
the 1960s when unemployment was low, or short-term lay-offs as often
occurred in the motor industry 30 years ago. Second, downsizing presupposed
that the workers in question were employees of the organisation with open or
permanent contracts. Spot contract employees, agency staff and fixed-term
contract workers are not made redundant; their contracts just expire. Thus the
question is why in the 1980s and 1990s has such a fundamental breach of the
employment relationship been used in preference to other forms of labour
input reduction? Turnbull and Wass (1997) have argued that employers use
this option because of the lack of restraint provided by the State. Deregulation
of the labour market has made it much easier (and cheaper) to use redundancy,
while other forms of reduction, such as short-term lay-offs or shorter working
weeks, have been more difficult to implement since they require pay
reductions for all. There is also a strong ``me too'' element here because
employers see other organisations in the same industry making employees
redundant and perceive a need to be seen to be doing something in the eyes of
the City. Indeed, in the US context Business Week (1994, p. 61) commented that
``Critics believe massive downsizing has become ... a bone to throw to Wall
Street when investors begin baying for cost cuts".

Structural changes resulting from changes in ownership or devolution

Structural changes to the organisation resulting in reductions in the numbers
employed take a number of forms. Senior managers may decide to simplify the
structure of the organisation by removing layers from the hierarchy or
``delayering'' as it has come to be known. Peters (1989) recommended that an
organisation should have no more than five layers and examples of these
kinds of changes which have attracted publicity include BT, BP, Boots,
Storehouse, the Stock Exchange and Rolls-Royce. Research suggests that the
main reason for delayering is to reduce costs (Ezzamel et al., 1993) although
other reasons include reducing bureaucracy, speeding up communications and
improving responsiveness to customer demands.
A related change is where there is a move to decentralise the organisation
often with a related reduction in the numbers employed in head office
functions. It is still surprisingly common to find head offices being reduced to
below the 100 employee threshold to symbolise corporate leanness (Goold and
Campbell, 1987). This may be linked to the establishment of strategic business
units where, in theory, each of the businesses takes responsibility for its own Downsizing: is it
affairs. The extent to which such decentralisation of discretion in the human always lean and
resources field is genuine, however, has been the subject of extensive research mean?
(Kinnie 1990; Marginson et al., 1993; Purcell and Ahlstrand, 1994).
Reductions in head office staff may also take place because of an
acquisition of one organisation by another or a change of ownership, for
example the Lloyds/TSB merger in 1995/1996 which resulted in the closure of 299
TSB Head Office at Birmingham. Indeed, large scale redundancies of head
office staff may be used as one of the arguments to support such mergers in
the first place, especially when functions are to be integrated, for example, in
the utilities where substantial savings are made by combining customer
service and billing units. Similarly, the privatisation of public sector
organisations may involve substantial redundancies as new owners
appraise the levels of employment required.

Core-periphery model ± greater flexibility

Reductions in the numbers of permanently employed staff also take place
when an organisation adopts the core-periphery model which was popularised
by Atkinson (1984). The associated practices involve distinguishing between
activities which are central or core to the business and those which are
peripheral. Core staff will generally enjoy permanent or long-term contracts
and good terms and conditions. Peripheral staff will comprise various other
groups including short-term contracts or casual employees and staff employed
by labour agencies insourced to the firm (Purcell, 1996). More qualitative
changes are involved in some circumstances when the working practices of
core staff are modified, especially when new technology is introduced. In these
cases these staff will be obliged or encouraged to acquire competence in a
wider range of tasks and to become functionally flexible.
This model may be applied where market demand is difficult to predict or
highly seasonal and cannot be handled by normal methods such as increased
overtime working. Often a temporary expedient develops into a new labour
force strategy. Adopting this model can mean that employees in areas such as
catering, security, payroll, IT and even personnel are made redundant and
their jobs are put out to tender by outside contractors. Permanently employed
staff are reduced, causing a reduction in the often all important ``head count''
and their jobs are taken on by sub-contractors who do not appear on the
payroll figures.
In this situation core employees are often required to develop multiple skills
following a more general redesign of jobs (Cameron, 1994). These staff may be
rewarded for their flexibility by the use of relatively sophisticated human
resource management techniques: they may be guaranteed job security, given
financial rewards for skill acquisition and access to training and development
opportunities. In this instance, the uncertainty resulting from fluctuations in
the market is transferred from the core employees to the peripheral employees
and the sub-contracting organisations.
Personnel For example, in one organisation in the financial services sector we visited
Review in 1997, of the 650 people working in the divisional office, 400 were permanent,
27,4 120 on fixed-term contracts and 130 employed by one of the labour supply
agencies. The firm, a household name, like other organisations renowned for
the sophistication of their human resources policies, used downsizing to shift
to a distinctive core-periphery employment pattern. Prior to the adoption of
300
the model in the 1990s, all employees had been treated as permanent or were
on open contracts.
Although these forms of employment are often presented as if they are
novel in some way, they have a long history as discussed by Gospel (1993).

Constant or higher output with fewer employees

Downsizing also takes place where employers seek to maintain or improve
their level of output by improving their efficiency. Typically these changes
involve the adoption of new processes of managing including techniques such
as TQM, JIT or team working. TQM has been described as a ``hazy ambiguous
concept'' (Dean and Bowden, 1994, p. 394) but is seen to include three
fundamental principles: customer orientation, process orientation and
continuous improvement (Hill and Wilkinson, 1995). The main aim of JIT is
to match output of manufacturing systems to the needs of the market (Oliver,
1991). Both TQM and JIT can lead to reductions in the numbers employed
because of the re-organisation of the tasks involved. TQM can lead to
reductions in those employed in quality departments and to delayering with
the use of teamworking and empowerment policies, while JIT can, in theory,
increase employees' task flexibility and autonomy. Often the move to JIT and
TQM is accompanied by the introduction of new technology which itself may
involve job losses and new working practices (Wilkinson et al., 1996).
Changes of this kind are often part of much broader developments in the
organisation which Cameron (1994, p. 198) defines as ``systemic". Here the aim
is to ``focus on changing the organisation's culture and the attitudes and
values of employees, not just changing the size of the workforce or the work".
In these circumstances downsizing is seen as ``a way of life, as an ongoing
process, as a basis for continuous improvement rather than as a program or a
target. A continuous improvement ethic is applied to the task of downsizing,
and cost savings throughout the entire system of interorganisational
relationships are pursued'' (Cameron, 1994, p. 199). Although only one-third
of organisations in Cameron's study adopted this approach to downsizing they
were the organisations which were most likely to achieve their objectives.
We argue that of the four different types of downsizing only the last two of
these can actually be associated with lean production. In order to explain why,
despite this, downsizing has become associated with lean production we need
to go back to the original work by Womack and his colleagues (1990).
Downsizing and lean production Downsizing: is it
Retracing the development of the concept of lean production reveals that always lean and
Womack et al. (1990) pulled together ideas which had been popular for at least mean?
ten years (e.g. Schonberger, 1982) including JIT, TQM and team working. The
main characteristics of lean production can be summarised as follows:
. the elimination of waste in terms of material and human resources; 301
. low inventories with minimum buffer stocks;
. a ``zero defect'' approach to production;
. integrated production chain through a close relationship or partnership
with component suppliers;
. team working approach to assembly;
. involvement of all employees and suppliers in a continuous process to
improve product and job design.
Although these techniques in themselves were not new what was different
was that the concept of lean production put these together in a package in a
way that had not been done before. They also placed emphasis on
benchmarking and made strong quantitative claims for lean production.
Indeed, it was this emphasis on benchmarking using quantitative measures as
justification for the new techniques which began to attract most attention. The
authors were forthright in their claims for lean production (Womack et al.,
1990, p. 13):
half the human effort in the factory, half the manufacturing space, half the investment in
tools, half the engineering hours to develop new products in half the time. Also it requires
keeping far less than half the needed inventory on site, results in fewer defects, and produces
greater than ever variety of products.
Lean production was hailed as the manufacturing concept of the future:
in the end, we believe, lean production will supplant both mass production, and the
remaining outposts of craft production in all areas of industrial endeavour to become the
standard global production system of the twenty-first century. That world will be a very
different, and much better place (Womack et al., 1990, p. 278).

Despite this there were many aspects of the concept which were not fully
articulated and there was little attention given to how these changes would be
introduced or for employee concerns.
Lean production, however, became associated with success, although many
researchers and writers have disputed this claim, most notably Williams et al.
(1992). Nonetheless, lean production attracted a great deal of attention and
much of it noted that lean production seemed to involve employing fewer
people and hence the original message became simplified to resemble a
mantra: ``lean production is linked to success is linked to employing fewer
people'' or a syllogism: ``lean organisations are more efficient with fewer
Personnel people; therefore if I have fewer people my firm will be more efficient". In fact,
Review the concept soon began to take on the form of a managerial fad (Benders and
27,4 van Bijsterveld, 1995) where a favoured management concept or technique is
talked about as:
. promising considerable improvements;
302 . being an absolute necessity for the modern organisation;
. is universally applicable;
. and, therefore, becomes abstract, vague and ambiguous.
This interest in leanness coincided with broader changes in the business and
economic cycle. Many national economies experienced a downturn in activity,
increased competition and excess capacity in the early 1990s. Major
organisations made very large financial losses and were looking for ways to
save money. Downsizing seemed to be right for the time and have an
irresistible logic of its own, even though there was considerable evidence that
these changes were often not the ``right thing to do'', as we discuss in greater
detail below.
The spread of the message was also helped by the appeal of the
metaphorical rather than the adjectival use of the term lean. We associate lean
with an absence of fat, and with being healthy and fit. This is often compared
to being overweight, unfit and with damaging excess or spare capacity. Lean
became equated with good and successful, and fat, the opposite of lean using
this metaphor, became associated with bad and unsuccessful and, therefore,
something which needed to be removed by a ``diet'' of some kind.
It was because of this association between lean and downsizing that lean
became associated with mean, and this simple association has persisted for
many people. Indeed, this may explain why some organisations in the mid-
1990s are reluctant to be described as lean: the term has taken on a rather
different interpretation for the manager with one eye on the public perception
of the organisation. We are finding that what was once a macho term is now
sending out the wrong signals, especially to employees.
However, if we examine the contemporary use of the lean concept (Womack
and Jones, 1996) we can see that emphasis remains on the elimination of waste.
This may mean employing fewer people, but this is not inevitably the case.
Lean thinking is associated with five key principles as the authors explain:
(1) specify value as defined by the ultimate consumer;
(2) identify the value stream;
(3) make the value creating steps flow;
(4) let customers pull value from the organisation;
(5) seek perfection.
Lean thinking may be associated with employing fewer people if the
organisation is in a poor financial state, when some employees will have to
``man the lifeboats'' (Womack and Jones, 1996, p. 258). However, if the Downsizing: is it
organisation is profitable, Womack and Jones assert, then the changes will always lean and
typically involve redeploying people into a lean promotion function (1996, p. mean?
256) rather than making them redundant. The exceptions to this are ``anchor
dragging managers'' who will not accept the new way of thinking when there
will be a need to ``take action quickly'' (Womack and Jones, 1996, p. 260). They
do not, however, provide evidence to substantiate these assertions. 303
To sum up the argument so far we can see that downsizing takes at least
four different forms, two of which involve changes only in the numbers
employed. This does not, of course, prevent managers from seeking to
legitimate such changes by reference to the need for greater leanness even if
the outcome of the changes is quite different from the original lean concept
(Benders and van Bijsterveld, 1995, p. 9).
Only two forms of downsizing could be said to involve the adoption of lean
techniques, which include qualitative changes in the process of managing.
Consequently, organisations which have downsized are not necessarily lean,
indeed, the take-up of lean techniques as a result of downsizing may be very
limited. Leanness, as it was originally defined, rather than how it has been
used, is about changes in managerial processes rather than simply a reduction
in employment.
Having concluded the first part of this paper by arguing that downsizing is
not always lean we can now proceed to the second question concerning how
moves to leanness are actually handled.

Is downsizing always mean?

Although it is commonly believed that downsizing should result in more
efficient, competitive companies there is increasing evidence in the literature,
however, to suggest that the majority of downsizings are unsuccessful. The
expected economic and organisational benefits failed to materialise. In the
USA between two-thirds to three-quarters of all downsizings are unsuccessful
from the start (Howard, 1996). Another American study by the Wyatt
Company (1994) found that few downsizings meet their desired goals in terms
of increased competitiveness and profitability. The majority of organisations
meet their immediate cost reducing objectives but this improvement is not
sustained in other areas such as long-term goals of improved service and
increased competitive advantage. In the study of the financial performance of
Fortune 100 companies over a five-year period (two years prior to the
announced downsizing, the year of the announcement and two years following
it) De Meuse et al. (1994) found that the financial performance worsened,
rather than improved following the reductions in the workforce.
Downsizing does not appear to offer the ``quick fix'' to a company's
financial problems. Advocates of downsizing will argue that if it were not for
these downsizings the company might be bankrupt. De Meuse et al. (1994)
admitted this point might have some merit but their findings show that
companies who downsize continue to suffer financial problems and announce
Personnel lay-offs, or as Cascio (1993, p. 102) noted ``downsizing begets more
Review downsizing". De Meuse et al. (1994, p. 521) concluded that ``if massive
27,4 layoffs are being used as the medicine for survival, their efficacy is
questionable". We can now consider some of the possible reasons for this
poor performance: in particular is it because of the way in which these
changes have been handled? Is it because downsizing is always mean?
304
Reasons for the failure of downsizing
There are a variety of reasons put forward for why downsizings fail to return
the expected benefits. Evans et al. (1996) suggested two major reasons for
failure, the main one being that downsizing is usually not undertaken as part
of a broader strategic repositioning of the firm. The second reason is that,
despite their best intentions, some companies risk cutting ``muscle instead of
fat'', and can loose key competencies. A number of commentators have
suggested that downsizing is often undertaken for the wrong reasons.
Vollman and Brazas (1993, p. 21) suggested that downsizing may not be an
appropriate response, at least in isolation, to competitive problems resulting
from ``poor quality, lack of flexibility, misguided or obsolescent strategies,
technological backwardness, slowness in rolling out new products, over-
diversification and/or a failure to capture synergies, inability to grasp and or
counter competitors strategies, ineffective marketing etc."
Some commentators have argued that in times of uncertainty firms copy
the actions of others in order to feel secure. Research by Cameron and his
colleagues (1991) showed that the failure to share the pain is one of the major
reasons that downsizings fail. Top management do not take a cut in their
benefits together with those lower down the organisation. Cascio (1993)
mentioned the effect that changes in staffing can have on the human resources
activity in particular. Redundant employees may be replaced by consultants,
there may be a duplication of functions in strategic business units and line
managers will require training if they are to carry out human resources tasks,
which companies may find expensive. The end result is that some redundant
employees may be taken back as consultants. Moreover, there is growing
evidence to show that ignoring the impact on survivor employees is one of the
main reasons for long term problems (Greenhalgh, 1982; Roskies and Guering,
1990). In a recent article on the decline and rise of IBM, Quinn Mills (1996)
claimed that its failure in the 1980s and early 1990s was partly the result of
breaking an implied promise to provide job security in order to bail out its
shareholders. As a result employees became disillusioned and less effective.
Very often organisations that downsize prepare well for those employees
who are leaving, by, for example, providing outplacement facilities, career
counselling, networking opportunities and early release schemes, but ignore
those left behind. For example, a survey by Doherty and Horsted (1995) of
financial service organisations showed that the majority (62 per cent)
indicated that no evaluation of the impact of redundancies on retained
employees had been carried out.
 In fact numerous studies show that following downsizing surviving Downsizing: is it
employees become narrow-minded, self absorbed and risk averse (Cascio, always lean and
1993). Employees become less flexible and over dependent on traditional, well mean?
known ways of doing things, and creativity is inhibited. Symptoms, which
have come to be known as the ``survivor syndrome'', include a fall in morale,
drop in productivity and distrust of management (Brockner, 1988; Brockner et
al., 1987, 1994). Stress increases, absenteeism rises, quality slips, employees 305
work shorter hours and initiate job searches. Survivors may feel guilty that it
was not them who went, fear a loss of job, be unclear about responsibilities
and what managers expect of them, perceive their workload to be higher, and
feel the ``psychological contract'' is threatened. There may also be feelings of
``survivor envy'' (Vollman and Brazal, 1993) ("he's got a special retirement
package and new job that pays better etc.") which may reduce employee
commitment.
Most of the literature is based on US evidence but the problems are
universal. In a UK survey of 170 personnel specialists in 131 financial services
companies, Doherty and Horsted (1995) concluded that organisations forced to
cut jobs are neglecting the needs of the employers who remain. Although 79
per cent of firms provided outplacement services for employees leaving, the
survey found that less than half gave support to those who remained. Instead
of feeling relieved that their jobs were secure, those who survived were
demoralised about their own future. There were also feelings of increased
stress, scepticism, anger and bitterness. Although most respondents (93 per
cent) said there were formal strategies for retaining and motivating remaining
staff, the majority tended to focus on rewards and training (mainly in job
skills for new work roles). Fewer than half (42 per cent) reported the use of
succession planning or career management (44 per cent). Further evidence of
symptoms of the ``survivor syndrome'' were evident in a survey of BT
managers (Newell and Dopson, 1996) which found that following the lengthy
redundancy and rationalisation programmes managers were demotivated, felt
they were working longer hours, lacked information about their role and had
reduced control.
There is some evidence, however, to suggest that feelings of guilt or fear of
further job cuts can increase performance and productivity (Brockner, 1988;
Brockner et al., 1987; Doherty and Horsted, 1995). Others, for example, Cooper
(1994), claim that fear about future redundancies can lead to inappropriate
behaviour in survivors who work long hours simply to be seen at work ± such
people being called ``presentees".

Implementing downsizing
The research discussed above points clearly to a failure by employers to deal
adequately with employee issues (both those who leave and especially those
who remain) when downsizing takes place. Often there is a very limited or
non-existent human resources role in these changes. This evidence provides
Personnel support for those who argue that downsizing is often handled in a manner
Review which can only be described as mean. These methods of implementation are
27,4 seen as major contributors to the failure of downsizing.
Certainly, there is no shortage of advice to practitioners in the literature as
to how downsizing ought to be handled. These advice lists usually take the
form of ``motherhood statements'' which appear to provide practical help, but
306 have little meaning in practice. For example, Cameron et al. (1991) tell us that
successful downsizing strategies require implementation from the top, but also
with recommendations from lower-level employees and urge the employer to
pay special attention to those employees who loose their jobs as well as those
who don't. If downsizing is this straightforward, we are entitled to ask, why
do more firms not introduce changes in this way and make a success of the
whole process.
Evans et al. (1996, p. 5) suggested that it is not enough to manage the
downsizing event effectively and humanely and make sure the changes are
integrated with the business strategy. It is also vital to consider the career
consequences of downsizing. They ask:
why would anyone want to stay to work for you in the longer term? You can be sure of one
thing. By the time you discover that, the executives on whom you depend are asking the
same question about themselves (and) it will be too late.
The need to take a new look at the development of careers is well covered in
the literature on delayering. Some research (Brockner, 1988; Guest and Peccei,
1992) suggested that symptoms of survivor syndrome are alleviated when
survivors perceive the situation to be handled fairly for both those leaving and
those remaining. Doherty and Horsted (1995) suggested that employee
survivors need professional advice, training and counselling and support if
they are to manage change successfully and counteract the effect of the
survivor syndrome. Part of the answer lies in employability, that is the
opportunity to take on board personal career ownership. This allows
individuals to be better equipped to cope in terms of emotions and skills.
For the organisation it offers the chance to achieve more flexible and painless
change and the opportunity to generate more appropriate behaviours. If
organisations, however, are to move to employability rather than employment
they must find alternative ways to develop skills and retain and motivate
employees.
Thornhill et al. (1997) have developed a diagnostic tool for analysing
survivors' responses to downsizing. They identified five areas of intervention
to address issues of survivors' commitment to the organisation: perceptions of
fairness and justice; line managers' skills to support changes; open and
realistic communications; senior management commitment and attempts to
clarify uncertainties.
Doherty and Horsted (1995), however, suggested that most organisations
are quite narrow in the HR interventions they use to manage survivor
syndrome. Beyond reward and skill-related training few other approaches are Downsizing: is it
generally applied. Doherty and Horsted (1995, p. 31) suggested that managing always lean and
change successfully means addressing issues from the organisational and mean?
individual perspective:
This requires the development of HR strategies which dovetail the use of internal and
external interventions, to give equal support and assistance to individual's personal
transition by offering them opportunities to develop themselves for the benefit of the 307
organisation, whatever that may be in the future.

Behind this is the wider question of managing employees' expectations and

creating realistic expectations of job security, career and job content. The
failure to address these issues, either though silence, a failure to recognise the
importance of expectations, or optimistic blandishments that despite all the
changes there will be no changes to job security and careers leads to frustrated
expectations and most important a breach of trust. Expectations are at the
heart of job satisfaction, the psychological contract and the illusive concept of
commitment. Downsizing organisations by definition are changing the
parameters of the psychological contract but many fail to recognise it. The
requirement to manage expectations is especially pertinent when downsizing
is associated with stepped change that is likely to be persistent. This is clearly
the case in the adoption of the core-periphery model, it is also true post-
acquisition, integration or privatisation (Hubbard, 1996). Where downsizing is
linked to the adoption of the lean organisation the process changes required of
customer orientation, continuous improvement and learning better ways of
working are so marked that the failure to address expectations is likely to
trigger the negative effects of downsizing analysed earlier rather than lead to
the required state of high commitment, high trust and empowerment.
More generally, the evidence on what constitutes good HR practice for a
successful downsizing is not particularly strong. Kettley (1995) suggested that
there are discernible trends in the way employers can adjust HR policy and
practice during and after a downsizing. These include:
. Winning commitment to the change via considerable effort in employee
communications. For example, the workforce should be well informed
about the need for cuts, the redundancy criteria, any changes in their
responsibility plus long-term plans for the company.
. Ensuring adequate provision of support for the well being of retained
as well as outplaced staff including career counselling and stress
management interventions such as employee assistance programmes.
. Enhancing opportunities for training and development of new skills, to
achieve new ways of working for individuals and groups.
. Realigning the performance management system.
Cameron (1994), drawing on a four-year study of downsizing, found that
certain forms of downsizing were more likely to succeed than others. He
subsequently identified to managers the best practice of successful
Personnel downsizings and argued that the most critical factor for success was the
Review effective management of the human resource system. ``Employee involvement,
27,4 teamwork, communication and information sharing, rewarding, appraising,
training, articulating with vision and administering downsizing in a
trustworthy and fair manner are all critical aspects of successful
downsizing'' (Cameron, 1994, p. 210). He concluded that ``Human resource
308 professionals have a central role, therefore, in ensuring the successful
implementation of downsizing strategies'' (Cameron, 1994, p. 211).

Forms of downsizing and the human resources role

The proposals discussed above provide a possible means of avoiding some of
the adverse effects on employees and thereby improving the success rate of
downsizing. However, they fail to acknowledge that downsizing takes a
number of different forms, with varied associated motives, and that the human
resources implications of each of these forms are likely to be different.
Although downsizing involves a change in the absolute or relative number of
employees, these reductions take place, as we have seen, in very different
circumstances and for different reasons.
Reducing output involves a reduction in employment of some kind with
associated human resources considerations such as outplacement activities
and procedures for managing those employees who have survived the
downsizing and remain within the organisation. Merging two organisations or
a change of ownership will involve decisions about the shape of the new
organisation and which employees from the original organisations will be
retained and which are made redundant. The core-periphery model involves a
fundamental re-appraisal of the activities of the business, renegotiation of
contracts of employment and of service and careful handling of the tendering
process. Finally, seeking to produce the same output with fewer people is
likely to involve reductions in employment, the introduction of new forms of
working such as JIT, TQM and the formation of teams and the associated
changes in training programmes, appraisal and pay systems.

Conclusion
In conclusion, we summarise our findings and address two outstanding
questions. We have argued that downsizing takes at least four forms, each of
which is associated with a particular context and set of motives: reductions in
employment because of reduced demand; restructuring and reorganisation;
adoption of the core-periphery model and higher output with fewer employees.
Only the last two of these can be characterised as adopting the lean principles.
Indeed, rather than becoming lean, downsized organisations will often become
anorexic or skinny, when what they really want to do is become fit for their
purpose and responsive to their markets.
Downsizing often fails to achieve the objectives which are set for it for a
variety of reasons. One of the most important of these is the inadequate
attention paid to employees and the associated human resource management
practices. Although there is some evidence of attention to employees who Downsizing: is it
leave the organisation it is rare for employers to consider the interests of those always lean and
who remain in employment, which led us to see downsizing as mean. mean?
Organisations seldom gain the benefits of increased efficiency associated with
lean production, but reap all the drawbacks of meanness.
Given these findings, it is interesting to consider why downsizing has
become associated with leanness and meanness. There are various possible 309
explanations for the association between downsizing and leanness:
practitioners seek a rationale for changes which are made for quite different
reasons, consultants package together a whole series of techniques into a
``change programme'' and writers rely on management accounts of changes
made and fail to take sufficient account of the forms of and motives for
downsizing. The link between downsizing and meanness is less problematic
since both the research and the practical experience of either redundancy or
surviving a redundancy shows that employers often pay little attention to
employee concerns. Summing up, the review suggests that downsizing is
rarely lean, but often mean and hence frequently associated with failure.
Despite this evidence, the link between lean and mean and downsizing seems
to be firmly established in the eyes of employers, with the corresponding
public relations connotations.
But is it inevitable that downsizing is rarely lean but often mean? We have
seen in our empirical research some examples of companies that have adopted
lean working practices and also managed to deal with the employee issues. It
is in this area that we believe the potential for further research lies where
changes in business processes are made with full consideration for the human
resource implications. Indeed, we suspect that only by using these methods
can leaner ways of working be sustained.
References
Atkinson, J. (1984), ``Manpower strategies for flexible organisations'', Personnel Management,
Vol. 16 No. 8, pp. 28-31.
Benders, J. and van Bijsterveld, M. (1995), Leaning on Lean: The Processing of a Management
Fad (mimeo), University of Nijmegen, The Netherlands.
Berggren, C. (1993), ``Lean production ± the end of history?'', Work, Employment and Society,
Vol. 7 No. 2, pp. 163-88.
Brockner J. (1988), ``The effects of layoffs on survivors: research, theory and practice'', in Staw,
B.M. and Cummings, L. (Eds), Research in Organisational Behavior, Vol. 10, JAI Press, pp.
213-55.
Brockner, J., Grover, S., Reed T. and Dewitt, R. (1994), ``Layoffs, job insecurity, and survivors'
work effort: evidence of an inverted-U relationship'', Academy of Management Journal, Vol.
35 No. 2, pp. 413-25.
Brockner, J., Grover, S., Reed, T., Dewitt, R. and O'Malley, M. (1987), ``Survivors' reactions to
layoffs: we get by with a little help for our friends'', Administrative Science Quarterly, Vol.
32, December, pp. 526-41.
Business Week (1994), ``The pain of downsizing'', Business Week, May.
Personnel Cameron, K. (1994), ``Strategies for successful organizational downsizing'', Human Resource
Management, Summer, Vol. 33 No. 2, pp. 189-211.
Review Cameron, K., Freeman, S. and Mishra, A. (1991), ``Best practices in white collar downsizing:
27,4 managing contradictions'', Academy of Management Executive, Vol. 5 No. 3, pp. 57-73.
Cascio, W. (1993), ``Downsizing, what do we know? What have we learned?'', Academy of
Management Executive, Vol. 11 No. 1, February, pp. 95-104.
310 Cooper, C. (1994), ``Presentees: new slaves of the office who run on fear'', Sunday Times, 16
October.
DeMeuse, K., Vanderhieden, P. and Bergmann, T. (1994), ``Announced layoffs: their effects on
corporate financial performance'', Human Resource Management, Vol. 33 No. 4, Winter, pp.
509-30.
Dean, J. and Bowden, D. (1994), ``Management theory and total quality: improving research and
practice through theory development'', Academy of Management Review, Vol. 19 No. 3, July,
pp. 392-418.Doherty, N. and Horsted, J. (1995), ``Helping survivors to stay on board'', People
Management, Vol. 1 No. 1, 12 January, pp. 26-31.
Evans, M., Gunz, H. and Jalland, M. (1996), ``The aftermath of downsizing: a cautionary tale
above re-structuring and careers'', Business Horizons, May-June, pp. 1-5.
Ezzamel, M., Lilley, S. and Willmott, H. (1993), ``Problematising the solutions of the new
management thinking: evidence from the UK on delayering and multi-skilling'', 11th
International SCOS Conference on Organisational Symbolism, Organisations and Symbols of
Transformation, EADA-Collbato, Barcelona.
Goold, M. and Campbell, A. (1987), Strategies and Styles: The Role of the Centre in Managing
Diversified Corporations, Blackwell, Oxford.
Gospel, H. (1993), Markets and Labour, Cambridge University Press, Cambridge.
Greenhalgh, L. (1982), ``Managing the job insecurity crisis'', Human Resource Management, No.
22, pp. 431-44.
Guest, D. and Pecci, R. (1992), ``Employee involvement: redundancy as a critical case'', Human
Resource Management Journal, Vol. 2 No 3, Spring, pp. 34-59.
Hill, S. and Wilkinson, A. (1995), ``In search of TQM'', Employee Relations, Vol. 17 No. 3, pp. 8-
22.
Howard, C. (1996), ``The stress on managers caused by downsizing'', The Globe and Mail, 30
January.
Hubbard, N. (1996), ``Implementing acquisitions: the role of managing expectations'', DPhil
thesis, Oxford University.
Hutchinson, S., Kinnie, N.J. and Purcell, J. (1996), ``The people management implications of
leaner ways of working'', Issues in People Management, No. 15 (with Rees, C., Scarbrough, H.
and Terry, M.), Institute of Personnel and Development, London.
Kettley, P. (1995), ``Employee morale during downsizing'', Institute of Employment Studies,
Report 291.
Kinnie, N.J. (1990), ``The decentralisation of industrial relations? Recent research considered'',
Personnel Review, Vol. 19 No. 3, pp. 28-34.
Marginson, P., Armstrong, P., Edwards, P.K. and Purcell, J. (1993), ``The control of industrial
relations in a large company: initial analysis of the second company level industrial relations
survey'', Warwick Papers in Industrial Relations, No. 45, Industrial Relations Research Unit,
School of Industrial and Business Studies, University of Warwick.
Millman, T. (1996), ``Lean organisations. observations on the implications for human resource
management'', (mimeo), University of Buckingham, Buckingham.
Newell, H. and Dopson, S. (1996), ``Muddle in the middle: organizational restructuring and Downsizing: is it
middle management careers'', Personnel Review, Vol. 25 No. 4 pp. 4-20.
Oliver, N. (1991), ``The dynamics of just-in-time'', New Technology, Work and Employment, Vol.
always lean and
6, Spring, pp. 19-27. mean?
Oliver, N. and Hunter, G. (1994), ``The financial impact of Japanese production methods in UK
companies'', University of Cambridge Institute of Management Studies, No. 24.
Oliver, N. and Wilkinson, B. (1994), The Japanisation of British Industry: New Developments in 311
the 1990s, 2nd ed., Blackwell, Oxford, 1994.
Peters, T.J. (1989), Thriving on Chaos, Pan Books, London.
Purcell, J. (1996), ``Contingent workers and human resource strategy: rediscovering the core-
periphery dimension'', Journal of Professional HRM, No. 5, October. pp. 16-23.
Purcell, J. and Ahlstrand, B. (1994), Human Resource Management in the Multi-Divisional
Company, Oxford University Press, Oxford.
Quinn Mills, D. (1996), ``The decline and rise of IBM'', Sloan Management Review, Summer, pp.
78-82.
Roach, S. (1996), ``Downsizing has gone too far, and it is time to invest in factories and skilled
workers'', Financial Times, 14 May.
Roskies, E. and Guering, C. (1990), ``Job insecurity in managers: antecedents and consequences'',
Journal of Organisational Behaviour, Vol. 11, pp. 345-59.
Schonberger, R.J. (1982), Japanese Manufacturing Techniques, Free Press, New York, NY.
Shadur, M.A. and Bamber, G.J. (1994), ``Towards lean management? The international
transferability of Japanese management strategies to Australia'', International Executive,
Vol. 36 No. 3, pp. 343-63.
Shadur, M., Rodwell, J. and Bamber, G. (1995), ``Factors predicting employees approval of lean
production'', Human Relations, Vol. 48 No. 12, pp. 1403-25.
Thornhill, A., Saunders, M.N.K. and Stead, J. (1997), ``Downsizing and delayering ± but where's
the commitment? The development of a diagnostic tool to help manage survivors'', Personnel
Review, Vol. 26 No. 1/2, pp. 81-98.
Turnbull, P. and Wass, V. (1997), ``Job insecurity and labour market lemons: the
(mis)management of redundancy in steel making, coal mining and port transport'',
Journal of Management Studies, Vol. 34 No. 1, pp. 27-51.
Vollmann, T. and Brazas, M. (1993), ``Downsizing'', European Management Journal, Vol. 11 No.
1, pp. 18-29.
Wilkinson, A., Godfrey, G. and Marchington, M. (1996), ``Bouquets, brickbats and blinkers:
TQM and EI in practice'', (mimeo), Working Paper, UMIST, Manchester.
Williams, K., Haslam, C., Williams, J., Cutler, T., Adcroft, A. and Johal, S. (1992), ``Against lean
production'', Economy and Society, Vol. 21 No. 3, August, pp. 321-54.
Womack, J. and Jones, D. (1996), Lean Thinking, Simon & Schuster, New York, NY.
Womack, J., Jones, D. and Roos, D. (1990), The Machine that Changed the World, Rawson
Associates, New York, NY.
Wyatt Company (1994), Best Practices in Corporate Re-structuring, Toronto, Ontario.