A Conceptual Framework for Analyzing Why Organizations Downsize

Art Budros
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Art Budros: Department of Sociology, McMaster University, 1280 Main Street, West, Hamilton, Ontario, Canada L8S 4M4

Organization Science, 1999, vol. 10, issue 1, 69-82

Abstract: Although downsizing has become an integral part of organizational life in the U.S., there is little serious theoretical or empirical work on this issue. Nearly all of the completed work addresses the effects of downsizing, which usually are negative. Therefore, an important yet unanswered question is: Why do organizations downsize in the first place? In addressing this question, I offer some systematic thoughts on the causes of downsizing. Specifically, I develop a conceptual framework for studying organizational innovation that draws on two overlooked dimensions associated with this phenomenon, the basis of social action (rational versus arational) and social context (organizational versus extraorganizational). I then characterize downsizing as an organizational innovation and develop propositions that explain why organizations downsize. Finally, I emphasize that empirical evaluation of these propositions will help us to understand a pivotal organizational development of recent decades.

Keywords: Downsizing; Organizational innovation; Organizational change (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:10:y:1999:i:1:p:69-82

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