n Management Dynamics : Journal of the Southern African Institute for Management Scientists - A comparison of reasons and objectives for organisational downsizing in South Africa and Australia

Volume 11, Issue 2
  • ISSN : 1019-567X



The purpose of this study was to identify the factors that contribute to downsizing decisions. "Downsizing" refers to the laying-off of workers to reduce costs and increase efficiency. The research was conducted by means of a cross-cultural survey in South Africa (n=228) and Australia (n=362). According to the survey, the reasons cited for downsizing in these two countries were very similar. The main reasons for downsizing were the introduction of new business strategies and new management systems. Increases in labour costs, changes in technology and government policy were also ranked as causes for downsizing in both countries. The primary objectives of workforce reduction in both countries were financial (reduction of labour costs, improvement of labour productivity, and labour flexibility). The study found conclusive evidence that, according to organisations that had downsized, these objectives had not been accomplished, and that the achievements were below expectation.

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