Downsizing consists of a administrative restructuring concept, in order to enhance the activities of a given organization, eliminating bureaucratic processes and hierarchical currents unnecessary in the company, for example.
This is an English term and means “flattening” or “decreasing in size”, in the literal translation for the Portuguese language.
Originally, this technique would have emerged in the mid-1970s in the United States, with the objective of creating a different strategy among other business organizations of the time.
Experts advise the use of downsizing like last alternative in crisis cases, as the risk of bankruptcy, for example. Thus, this technique would serve as an attempt to rebuild the company.
In this context, the main goal of the downsizing it is to develop a plan that makes the company manage to maintain itself efficiently and effectively in the most “lean” way possible.
See also: the meaning of Reengineering It's from Design Thinking.
as the goal of downsizing is to reduce costs and restructure the company's work organization, usually the first step to be taken with this technique is the cutting of positions, which means the temporary or permanent dismissal of some employees.
In the long term, however, the restructuring project provides for the total elimination of bureaucratic practices, which delay and prevent a more efficient pace of work, in addition to to help eliminate pressures on employees (who become more independent in their roles), making the work environment more pleasant.
However, it can be said that the main justification for the use of downsizing it is the reduction of the company's costs.
Learn more about the meaning of Strategic planning.
Features of Downsizing
- Cost reduction;
- Elimination of bureaucratic routines;
- Decisions taken quickly;
- Faster and less distorted communication between company sectors;
- Raising employee morale;
- Cuts from positions classified as expendable;
- Increased efficiency and effectiveness of productivity.
See also: the meaning of rightsizing.