Downsizing and the organizational performance: A case study from stakeholders' perspectives

Abstract

This case study sheds light on the disputable organizational issue of downsizing in EDU-X; one of the leading educational centers in the Middle East. For some reasons, EDU-X management was forced to conduct a downsizing in 2011, after six years of successful experience in the educational field. The case focuses on the underlying reasons that forced the top management to take this action, and describes the impact of downsizing on the stakeholders of the organization before, during, and after the downsizing (one year and a half later). On one hand, the opinions, arguments, and reasons of the top management about the downsizing were presented. On the other hand, the opinions, arguments, and despair of the employees whether survivors, laid off, or resigned were communicated in the case description. Based on the comprehensive model of Kammeyer-Mueller (2001) and in retrospect, the downsizing decision of the management of EDU-X was inevitable and turned out to be the right decision for the organization. Its positive impact can be demonstrated on both the performance and inter-organizational relations and team dynamics within EDU-X. Definitely, the case study shows that the management could have used a higher assistance, higher participation, and more communication with their employees to lessen the undesirable effects of downsizing. In closing, it was enriching to demonstrate a local downsizing case and certainly it would be worthwhile to explore such experiences of other organizations and businesses in the Middle East market.