Responsible Restructuring: Creative and Profitable Alternatives to Layoffs

by Wayne F. Cascio

Book Overview

Using real - life illustrations of successful, responsible restructurings at companies such as Charles Schwab, Cisco, Motorola, and Intel, this book provides alternatives to downsizing.... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1576751295
• ISBN13: 9781576751299
• Release Date: August 2002
• Publisher: Berrett-Koehler Publishers
• Length: 144 Pages
• Weight: 0.85 lbs.
• Dimensions: 0.7" x 6.3" x 9.4"

Customer Reviews

Great Alternatives

By focusing on alternatives rather than the chopping block, this book should be the first read for anyone considering layoffs or downsizing. This is a necessary read for today's economic climate and anyone that is interested in keeping the company sustainable for the long haul should consider this book.

Many good ideas as alternatives to layoffs

Not all companies follow the slash and burn tactics of laying off staff in an economic downturn - some look upon employees as an asset to be developed and follow an approach called 'responsible restructuring' because they know that cutting people can be disastrous, especially in a knowledge-based organization. Cascio investigated the way that companies restructure and identified two main groups, - the larger saw employees as a cost to be cut while a smaller group of responsible restructurers saw employees as assets to be developed by asking how they could change their way of business to use staff more effectively. By analyzing S & P 500 companies over eight years Cascio showed that downsizers were not more profitable nor were stockholders better off.A medium sized securities trading firm, relying heavily on its employee's knowledge and creativity, experienced a major downturn in revenues and stock price after a decade during which employees generated excellent results and built customer loyalty. However, faced with the fact that employees accounted for more than half of expenses, top management sought the best solution. There were many different approaches to learn from: Merrill Lynch cut one in six employees world wide; Charles Schwab used layoffs only as a last resort; Lehman Brothers insisted on keeping staff in tact and even hiring new talent; Edward Jones kept all staff but cut bonuses. After 9/11 Boeing laid off 30,000 employees while Airbus reduced head count through attrition. As the economy weakened some firms seized the opportunity to strengthen their competitive position through a variety of strategies such as cost cutting, expansion, marketing, and acquisitions. Kodak restructured to compete in the digital era; computer based typesetting revolutionized the newspaper industry. But what would be the best strategy for the medium sized securities firm? This book provides a wealth of case studies and examples of proven alternatives to layoffs. Layoffs are not only traumatic to those who leave but can affect the quality of work done by those that stay. For three years union workers at the Decatur Plant at Bridgestone/Firestone were on strike or working without a contract during which their tires prompted more complaints, compensation claims rose and the loss of 40 lives was attributed to the labor dispute. Each year Fortune magazine publishes a list of the best companies to work for - companies which satisfy all stakeholders. "High-performing companies do walk the talk when it comes to performance measure. It is clear that they are seriously committed to the human elements that contribute to their success."Responsible restructuring relies on workers to provide substantial competitive advantage by adapting a wide range of practices such as training, information sharing, participatory management, flattened organizational structures, labor management partnerships, compensation linked to skills, and customer satisfaction. Chapter 5 "Responsible

Do you want the No-layoff Payoff?

Downsizing remains very populair. It's easy to understand why. Whenever a company gets into serious financial trouble you have to rapidly increase revenues or to bring down costs. An easy choice: everyone knows that future costs are far more controllable and predictable that future revenues. So costs are cut. And what better cost to cut than labor costs? In many companies these costs represent a large proportion of the total fixed costs. So what to do according to this logic? Fire employees!BUT DO DOWNSIZINGS HELP? OFTEN THEY DON'TIn many cases downsizing does not lead to fast and lasting improvement of the financial situation of companies, nor to improvment of their share price. Research has demonstrated that extremely successful companies often offer a high level of employment security (see Pfeffer, 1998; Collins, 2001). But to my knowledge this book by Wayne Cascio is one of the first to present systematic longitudinal research on the effects of downsizing. The most important conclusion: companies that downsize are not more profitable than companies that don't and often end up hurting themselves. This book gives several reasons for this: 1. DOWNSIZING WITHOUT IMPROVING. Many downsizing companies have no vision on structurally improving the organization. The only thing they do is make the organization smaller. Many problems that previously existed remain. Several new problems are added. How could profit improve?2. UNFORSEEN COSTS OF DOWNSIZINGS CAN BE SKYHIGH. Cascio sums up a large number of direct and indirect costs of downsizings. 3. DOWNSIZING TOO OFTEN AND TOO SOON. Cascio's research shows that many managers see personnel as a cost that should be minimalized. They ask: what is the minimum number of people we need to run this company? This mindset made these managers downsize often and easily. This hurts loyalty, commitment and and a negative morale that hurts productivity. The opposite is also true: offering employment security lead to loyalty. This loyalty leads to so-called Organizational Citizenship Behaviors (OCB's): doing more than is asked, behaving honestly, working together, helping eachother. WHAT TO DO?The following combination of practices proves to be far more fruitful: 1. PREVENTIVE PLANNING: do everything you can to identify early warning signals and respond quickly to prevent problems from growing. 2. FIRST, APPLY CREATIVE ALTERNATIVES TO DOWNSIZING: in times of trouble, do everything you can to avoid the need to downsize (alternative ways of bringing down costs and improving revenues). 3. IF NOTHING ELSE WORKS: DOWNSIZE: make it clear to everything that downsizing is a last resort. 4. IF YOU DO IT, DO IT GOODCascio descirbes a number of companies that were confronted with very hard circumstances and that successfully applied alternative stragies to downsizing. Charles Schwab & Company used downsizing as a last resort after first having done the following: 1) stopping projects en saving al kinds of costs, accompanied w

CHARTING A BETTER WAY TO SUCCESS IN HARD TIMES!

This book challenges the traditional knee-jerk response of the cost-cutting mentality and charts a better way to organizational success in hard times. Based on extensive research on the approaches companies take to restructuring, Cascio has found a huge distinction between those that see people as a cost (the downsizers) versus assets to be developed (the responsible restructurers). The book presents an analysis of the financial consequences of alternative restructuring strategies in terms of profitability and attractiveness as an investment. Cascio exposes the myths about downsizing and presents the hard facts. He examines the approaches of the responsible restructurers, i.e., high-performance work practices...and explores the practices and experiences of many companies. The final chapter illustrates what to do, and not do, when restructuring. Stern's Management Review finds this book rich in insights and sound advice-very highly recommended!

responsible restructuring

Every once in a while I read something that confirms an intuition I've had for some time.Responsible Restructuring is one of those books.Wayne Cascio does us all a favor by staying away from the moral argument around using massive layoffs to cure organizational ills,and bascially demonstrates that, from a pure business perspective, it is a flawed tactic.From a pragmatic perspective he doesn't rule out the possibility of layoffs,just suggests that CEO's put that card on the bottom of the deck.I actually think many of us knew this but he provides the facts.In just over 100 pages and seven concise chapters he puts some telling facts in front of us,making a case for restructuring that has more to do with long term success than "making the numbers." What a concept,he is endorsing "being good" over "looking good.'This is a book to be read by anyone in a management position then shared.If you are a CEO,Board member or Senior Manager who has ever been through a big layoff this is a must read.If you are any of these and can imagine that someday you might face this possibility,this is also a must read.And its quick! I read the entire book on a plane ride from Rochester to Detroit.