Downsizing to Improve Strategic Position

Planned large scale reductions in head‐count, or down‐sizing, have become commonplace in many industries worldwide. In practice many downsizings fail to achieve desired long‐term results. Presents results of a survey among large Canadian firms which suggests some reasons. Examination of strategic management of downsizing reveals weaknesses of both planning and implementation. Effective management of human resources is a prerequisite but failures often arise from inattention to other important aspects of organizational change. Suggests that a well‐thought‐out strategy should be accompanied by process innovation, business re‐engineering and organizational learning.