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Organizational downsizing is becoming pervasive as a characteristic of modern organizations, yet little scholarly literature has addressed the processes and outcomes associated with this phenomenon at the organizational level. Downsizing has often mistakenly been confused operationally with concepts such as decline, layoffs, or nonadaptability, indicating that the definition of the concept remains imprecise. This paper offers a straightforward, operational definition of downsizing. Then the literature on organizational downsizing is used to build a theoretical framework of the process of effective downsizing and the organizational changes that may accompany it. Important organizational processes, characteristics, and outcomes associated with downsizing are identified.
Freeman et al. (Mon,) studied this question.