STRATEGIC CAUSES AND OBJECTIVES OF DOWNSIZING There are various strategic reasons for organizations to downsize. They include: acquisitions and mergers, to avoid bankruptcy, to prepare for privatization and to reduce costs to remain competitive in an increasingly competitive and global economy (Labib & Appelbaum 1994, p.61). Acquisitions and Mergers Downsizing usually results following an acquisition or merger. Duplicate and redundant functions are eliminated in an attempt to consolidate all operations in order to achieve synergies. The resulting …showed first 75 words of 486 total…

…showed last 75 words of 486 total…organizational structure as a goal for their firm’s downsizing. In addition, 36 percent had a goal of changing the firm’s culture. Other firms stated specific reductions in the workforce (24 percent). From these results, the authors concluded that the firms under study desired to become more efficient and improve their value creation. They tried to do so by eliminating units, positions, and staff that did not contribute adequately to the firm’s value creation efforts.