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7-S Model (continued)
Identifying Areas of Alignment and Misalignment That Will Need to Be
Managed and Actions that Need to be Taken
Environment
Style
Shared
Values
Skills
Staff
Systems
Structure
Strategy
Strategy Degree of
Alignment:
Structure
Systems
Staff
Skills
Shared
Values
Style
Environment
12
c) Organizational Change Model
Initial Organization Analysis
Understanding the Forces for Change and the
Organizational Situation
Why Change?
Determining the need for change, determining the degree of
choice about whether to change
13
c) Psychological Contract
Slide to Frame Discussion of What was the Contract and Was the Contract Violated
Psychological Contract
• The psychological contract represents the sum of the implicit
and explicit agreements we believe we have with our
organization
14
d) Perception of Fairness and Justice Slide
Perceptions of Fairness and
Justice
•Perceptions of fairness and justice will influence
how recipients view and react to the change
15
e) Exit, Voice, Loyalty and Declining Job Satisfaction
Responses to Job Dissatisfaction
Active
Passive
Destructive Constructive
Exit
Neglect
Voice
Loyalty
16
f) Downsizing Slides
From: Bedeian, G., & A.A. Armenakis (1998), The cesspool syndrome. Academy of Management
Executive, 12 (1), 58-67; & Mishra, K.E., & G. M. Spreitzer & A.K. Mishra (1998), Preserving employee
morale during downsizing, Sloan Management Review, 39 (2), 83-95.
The Cesspool Syndrome
• Organizational Anorexia + Lose the Wrong People = A
Developing Death Spiral
• Most Able and Marketable May Go First
When Downsizing is not Thought Through Strategically:
Cesspool (Continued)
• Surviving and Prospering Depends Upon Identifying and
Retaining Star Performers and Core Skills
• Decisions Should be Grounded in Well Thought-out
Strategy and Criteria that are Effectively Communicated
• Vision, Direction, and Training are Very Important
• Clear Communications of Expectations are Critical
• Ambiguity & Uncertainty Nurture Rumours and Mistrust
17
What Downsizing Promises
• A leaner, more nimble and adaptive organization
• Reduced head count = lower cost & more competitive
What Downsizing Often Delivers
• Shattered morale, trust & confidence in the organization
• Guilt over having survived + anxiety about the future
• Concern re: capacity to take on added roles & duties
• No strategic plan for the downsizing
• Wrong people exit (i.e.., those with most needed skills)
• Survivors see selves as professionally trapped as mobile
survivors exit – self confidence declines
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Why Downsizing Doesn’t Deliver
• Senior mgmt may lack ability to manage a downsizing
(e.g., no vision &/or strategic thought)
• No access to support systems and advisors to help
guide them through the process
• Cultural &/or systemic barriers impede the process
• Perceived managerial arrogance
What Organizations Need After Downsizing
• High morale, trust & confidence in the organization
• Understand downsizing reasons & future strategy
• Confident in their capacity to take on added roles & work
• Feel downsizing handled fairly, equitably, & with dignity
• Right people remain (i.e., those with most needed skills)
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Effective Downsizing Process
• MAKE THE DECISION TO DOWNSIZE
– Do it as a last resort, after all serious options considered
• PLAN THE DOWNSIZING
– Use a cross-functional team of credible, respected
people
– Identify and address the concerns of all
constituents
Effective Downsizing Process
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Effective Downsizing Process (cont.)
• MAKE THE ANNOUNCEMENT
– Ensure rationale, direction & vision are clear
– Be specific about what action will be taken
– Time announcement to ensure they hear it from you
first
• IMPLEMENT THE CHANGE
– Tell the truth and err on the side of over communication
– Deal fairly, equitably & generously with departing
employees
– Announce subsequent separations as planned
– Allow voluntary separations via buyouts & early
retirements
Effective Downsizing Process