The threat of organizational downsizing on the innovative propensity of R&D professionals

Downsizings, re‐engineering, and restructuring continue to be strategic initiatives employed by the management of US companies. Although the lay‐offs that result from these activities have yielded some short‐term benefits for companies, over the long term, the ability of the firm to innovate new products and processes may be compromised. In this article four antecedent variables of individual innovation are identified: a willingness to take risks, a willingness to make suggestions, the degree to which one is motivated by the job, and the degree to which one is motivated by fear. A model is developed and hypotheses proposed to test the effect of the threat of downsizings on these four factors. The results of our study revealed that these threats have a significant effect on all four factors in a direction which is detrimental to the propensity of R&D professionals to be innovative. The article concludes with suggestions for R&D managers in a downsizing environment to foster the innovation process at the individual level.