Tasksheet 7: Organizational Outcomes ~ Previous Research

What is a common belief among managers regarding workforce reduction?

• It leads to increased employee morale.

• It results in reduced costs and improved financial performance.

• It enhances communication among employees.

• It guarantees higher productivity.

Answer explanation

A common belief among managers is that workforce reduction leads to reduced costs and improved financial performance, as fewer employees can lower payroll expenses and potentially increase efficiency.

According to Cascio (1993), after downsizing, surviving employees become more innovative.

• TRUE

• FALSE

Answer explanation

According to Cascio (1993), surviving employees after downsizing often become narrow-minded and self-absorbed, focusing on their own job security rather than collaboration or innovation.

What factor can mitigate negative attributes associated with organizational decline?

(you should check more than one option)

• Reduced communication.

• Systematic analysis of tasks.

• Lower employee effort.

• Increased bureaucracy.

• Systematic analysis of personnel.

Answer explanation

Systematic analysis of tasks and personnel helps identify inefficiencies and areas for improvement, enabling organizations to address decline effectively, unlike reduced communication or increased bureaucracy which can worsen issues.

What is a potential outcome of workforce reduction mentioned by Tomasko (1990)?

• Increased customer satisfaction.

• Higher employee commitment.

• Psychological trauma for both those let go and survivors.

• Improved decision-making processes.

Answer explanation

Tomasko (1990) highlights that workforce reduction can lead to psychological trauma for both those who are laid off and the remaining employees, affecting morale and productivity.

What did Worrell, Davidson, and Sharma (1991) find regarding layoff announcements?

• Investors respond negatively, especially to large-scale cuts.

• Investors generally respond positively.

• They have no effect on stock prices.

• They lead to immediate increases in stock prices.

Answer explanation

Worrell, Davidson, and Sharma (1991) found that investors respond negatively to layoff announcements, particularly when they involve large-scale cuts, indicating a lack of confidence in the company's future.

Allan and Loseby (1993) concluded that job security policies had no significant difference in financial performance.

• TRUE

• FALSE

Answer explanation

Allan and Loseby (1993) found that job security policies do not significantly impact financial performance, indicating that these policies may not be as crucial for organizational success as previously thought.

What is a common issue organizations face when downsizing?

• Comprehensive planning for change.

• Lack of policies to address downsizing problems.

• Increased employee participation.

• Enhanced communication strategies.

Answer explanation

A common issue organizations face when downsizing is the lack of policies to address downsizing problems. Without clear guidelines, organizations may struggle to manage the process effectively, leading to confusion and dissatisfaction.

What is one of the undesirable outcomes of downsizing identified by Tomasko?

• Improved customer relations.

• Loss of valuable employees.

• Increased innovation.

• Higher morale among remaining staff.

Answer explanation

One of the undesirable outcomes of downsizing, as identified by Tomasko, is the loss of valuable employees. This can negatively impact the organization's knowledge base and overall performance.

What did Ford and Perrewe (1993) assert is necessary for effective downsizing?

(more than one option is correct)

• Minimizing stakeholder involvement.

• Ignoring employee concerns.

• Comprehensive planning.

• Focusing solely on workforce reduction.

• Proper communication.

Answer explanation

Ford and Perrewe (1993) emphasized that effective downsizing requires comprehensive planning and proper communication to address the complexities involved and to mitigate negative impacts on employees and stakeholders.

What is a characteristic of organizations that have undergone workforce reduction?

• They often become more top-heavy.

• They have lower average employee ages.

• They tend to have younger employees.

• They experience increased innovation.

Answer explanation

Organizations that undergo workforce reduction often eliminate lower-level positions, leading to a concentration of management roles. This results in a top-heavy structure, where there are more managers relative to employees.