Does Downsizing Really Matter? Evidence from Japanese Multinationals in the European Manufacturing Industry

Kawai, Norifumi (2011) Does Downsizing Really Matter? Evidence from Japanese Multinationals in the European Manufacturing Industry. International Journal of Human Resource Management. pp. 1-19. ISSN 0958-5192

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Abstract

This article empirically examines the antecedents and consequences of organizational downsizing using a sample of 67 Japanese multinational corporation (MNC) subsidiaries operating in the European manufacturing industry. To date, existing ?ndings on the occurrence of downsizing at the subsidiary level are based on anecdotal accounts or simple descriptive surveys without any clear-cut conceptual framework that addresses factors and consequences of downsizing events. This study provides evidence that the macro-environmental (e.g. demand declines, international competition) and organizational factors (e.g. stagnant sales growth and poor pro?tability improvement of international competitiveness, development of stable management) were the central motivations for ?rms to engage in workforce reductions. Using the ordered probit and multiple regression techniques, a negative relationship was found between the adoption of downsizing by ?rms and perceived market and organizational performance, namely sales growth and employee motivation. This article also presents managerial implications and methodological limitations.

Item Type: Article
Keywords: employee motivation; Europe; firm performance; Japanese multinationals; organizational downsizing
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HF Commerce > HF5001 Business
Depositing User: Catrina Hey
Date Deposited: 01 May 2012 14:09
Last Modified: 28 Jun 2012 15:49
URI: http://sro.sussex.ac.uk/id/eprint/38912
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