Is Downsizing a Good Strategy for Revamping an Organization's Competitiveness

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Examlex · Accepted Answer

The Answer is Retrenchment is a corporate-level strategy that tries to reduce the size or diversity of an organization's operations. Downsizing the organization's employment is a possible retrenchment strategy, but it should be the last one. The objective of downsizing is to reduce staff expenditure and revamp the organization by making it more financially competitive. However, downsizing also involves the withdrawal from offering certain products or serving certain markets because it leads to a possibility of staff shortage. It also means that the organization will not be able to take up any new opportunities in the market. Significantly, downsizing also lowers staff morale, which reduces operational efficiency. Therefore, downsizing should be handled with great care.

Is Downsizing a Good Strategy for Revamping an Organization's Competitiveness

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