The Effects of Downsizing Stifles on Organizational Innovation Propensity

International Journal of Business and Innovation. Vol. 2, Issue 6, 2016

Title: The Effects of Downsizing Stifles on Organizational Innovation Propensity

Author: S. Kiumarsi, Gopakumar, Seyedeh Marzieh Hashemi, Rostam Ranjbar Navi

Workforce downsizing has become a popular human resource practice in organizations over the last few years. During the economic or financial crisis, most companies take an appropriate measure to implement downsizing strategies in order to optimize cost efficiencies as well as to achieve operational effectiveness. However, more surprisingly, its long term impact on a number of organizational outcomes remains ambiguous. Research on the impact of downsizing is still questionable. Organizations recognize that a stable and effective organization structure and culture must be in place to have a favorable working environment for innovation. To perform daily work, develop innovation and obtain efficiencies, workers’ knowledge must frequently be shared across organizational boundaries. Organizational downsizing is a popular approach amongst managers these days. This paper therefore, aims to review various pitfalls introduced into the organization as a result of the downsizing exercise. This paper attempts to identify both direct and indirect consequences of downsizing to the organization’s ability with the purpose of innovation in the long run.

Keywords: Downsizing Stifles, Propensity, Organizational Innovation.

Date- December 30,2015

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