KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT STUDIES, PUNE

Organizational

Structure Process And Design

ARTICLE PRESENTATION

Presented To: Dr. Janaki Naik

Presented by: Apoorva Kulshreshtha Neeraj Bhandari

DECREASING ORGANIZATIONAL SIZE: TO UNTANGLE OR NOT TO UNTANGLE?

22-Feb-13

Academy Of Management Review 10-3

Background
This article contradicts an article published in the previous issue whose author were Sutton and DAunno. They outlined the result that declining financial resources and a decreasing workforce has same effect on organization structure. The author focuses on the main point of contention i.e. falsity of two main assumptions made in the previous article.
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First Model
Decrease In financial resources

Increase in the mechanistic nature of organization ( standard operating procedures, greater job standardization, centralization of authority and decreased job autonomy)
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Second Model
Decrease in workforce size

Increase in mechanistic nature of organization

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Contention
The last model is valid only in short run not in long run. Financial resources decline and personnel decline have different effects on organizational structure and thus these effects can be untangled.

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Assumptions
Structural change is symmetrical during organizational growth and decline Work force decline reduces coordination and control needs.

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Assumption1: Symmetry between growth and decline in structure

If growth increases needs for coordination and control and leads to more formalized structures than decline must have the opposite effect. Because work force decline entails size changes that are the opposite of those occurring during growth, the assumption is that structural change will also follow a reverse path, and the long-term outcome of work force reduction will be a less mechanistic structure.

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 Reversing the direction of an independent variable, such as organizational growth, may or may not produce a reversal in a dependent variable connected with it. Downs pointed out that a decline in a bureaucracy's volume of work is rarely accompanied by a proportional decrease in the control structure or the number of administrators.
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Assumption 2
According to Sutton and D'Aunno's This was the assumption that work force decline reduces needs for coordination and control. Sutton and D'Aunno view the level of work force size as critical.

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Contradiction
According to past research reasons why work force decline may not reduce coordination and control but may, infact,increase them . Author give three reasons for that on the basis of experience.

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First Reason
According to author first reason most decreases in work force size, or "downsizings, take place through layoffs. To justify their view he gave some examples from past research and case studies.
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Second Reason
Second reason why work force decline may increase, rather than lower, coordination requirements has to do with internal activities other than management of mass layoffs Author give some examples from the studies of Tsouderos and Ford.

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Third Reason
Third reason why work force reduction may explain coordination needs has to do with inter organizational linkages.

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To Untangle Or Not To Untangle ?

Many changes arising from long-term

work force reduction may be in the direction of more mechanistic, rather than less mechanistic, organizational structures. Effects of work force reduction and reduction in financial resources are different and can be untangled.
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Discussion and Conclusion

The points made in this comment have several implications for future theory and research on the process of organizational decline which are enumerated below: First decline of current model Second complexity of the organizational decline process. Third theories of decline
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