Responsible Restructuring

Firms that restructure through downsizing are not more profitable than those that don't, and often end up hurting themselves in the long run. Responsible Restructuring draws on the results of an eighteen-year study of S&P 500 firms to prove that it makes good business sense to restructure responsibly-to avoid downsizing and instead regard employees as assets to be developed rather than costs to be cut. Wayne Cascio explodes thirteen common myths about downsizing, detailing its negative impact on profitability, productivity, quality, and on the morale, commitment, and even health of survivors. He uses real-life examples to illustrate successful approaches to responsible restructuring used by companies such as Charles Schwab, Compaq, Cisco, Motorola, Reflexite, and Southwest Airlines. And he offers specific, step-by-step advice on what to do-and what not to do-when developing and implementing a restructuring strategy that, unlike layoffs, leaves the organization stronger and better able to face the challenges ahead.

Table of Contents:
List of Exhibits Preface Acknowledgments 1 Restructuring In Perspective The Economic Logic That Drives Employment Downsizing Direct and Indirect Costs of Layoffs Is Restructuring a Bad Thing to Do? Responsible Restructuring—What Is It? Employment Downsizing—The Juggernaut Continues The Human and Financial Toll The Effect of Poor Labor Relations on Product Quality The Payoff from Treating Employees as Assets 2 The Financial Consequences of Alternative Restructuring Strategies Results of the 1982–1994 Study Extension and Update from 1995 to 2000 Stock Return Employment Downsizing and Flexibility 3 A Baker’s Dozen Myths versus Facts about Downsizing MYTH #1 Jobs are secure at firms that are doing well financially. MYTH #2 Companies that are laying off workers are not hiring new ones. MYTH #3 Downsizing employees boosts profits. MYTH #4 Downsizing employees boosts productivity. MYTH #5 Downsizing employees has no effect on the quality of products or services. MYTH #6 Downsizing employees is a one-time event for most companies. MYTH #7 Since companies are just “cutting fat” by downsizing employees, there are no adverse effects on those who remain. MYTH #8 Most employees are surprised to learn they’ve been laid off. They ask, “Why me?” MYTH #9 At outplacement centers, laid-off employees tend to keep to themselves as they pursue jobs. MYTH #10 The number of employees let go, including their associated costs, is the total cost of downsizing. MYTH #11 Violence, sabotage, or other vengeful acts from laid-off employees are remote possibilities. MYTH #12 Training survivors during and following layoffs is not necessary. MYTH #13 Stress-related medical disorders are more likely for those laid off than for those who remain. 4 The Case for Responsible Restructuring Alternative Approaches to the Employment Relationship Which Approaches Produce Better Outcomes? The Causal Effect of Management Practices on Performance The Financial Impact of Employee Attitudes on Firm Performance Policies and Practices That Lead to High Performance Business Concept Innovation What Business Concept Innovation Is Not 5 Responsible Restructuring—Alternative Strategies Charles Schwab & Company Compaq Computer Cisco Systems, Accenture, and Motorola State of Connecticut, Department of Labor, and Reflexite Corporation Intel, ChevronTexaco, and Minnesota Mining and Manufacturing Company (3M) Acxiom, Inc. Sage Software, Inc. Louisiana-Pacific Corporation Philips Electronics Singapore Procter & Gamble Company 6 The Virtues of Stability Snap Back Lincoln Electric Holdings, Inc. SAS Institute Southwest Airlines Best Employers in Asia The Costs of Downsizing versus the No-Layoff Payoff 7 Responsible Restructuring: What to Do and What Not to Do Why Address Organizational Justice? Components of Procedural Justice The Importance of Communication Developing a Systematic Communications Strategy Implementing a Corporate Communication Effort 10 Mistakes to Avoid When Restructuring Restructuring Responsibly: What to Do Endnotes Index About the Author

About the Author :
Wayne F. Cascio has written extensively about employment downsizing and restructuring, and has consulted with a wide variety of firms on six continents. He is past chair of the Human Resources Division of the Academy of Management, past president of the Society for Industrial and Organizational Psychology, and is currently a professor of management at the University of Colorado-Denver.

Review :
"Responsible Restructuring is a thoughtful, responsible and necessary outline for management of all levels of Corporate America. Professor Cascio has with a short, but powerful, book issued a common-sense blueprint for restructuring in today's rapidly changing business world. A mustread for all levels of management. - Eugene K. Anthony, U.S. Administrative Law Judge, Ret.