|
Article Excerpt
This paper uses cognitive dissonance theory as a foundation for developing hypotheses about how past experience as a layoff agent influences respondents' perceptions of organizational downsizing. Consistent with many theoretical frameworks in organization studies, cognitive dissonance is conceptualized as an unmeasured construct that mediates between layoff agency and perceptions of organizational downsizing. Perceptions of organizational downsizing are operationalized along four different dimensions. The hypotheses about the effects of layoff agency on perceptions of organizational downsizing are tested with survey data, using controls for the respondent's past experience as a layoff victim and the respondent 's ideological beliefs about business. The results show partial support for the hypotheses, indicating that layoff agents see downsizing as more inevitable and less of a breach of the implied contract between employer and employee than respondents without layoff agency experience. The results also reveal persistent effects of respondents' layoff victim experience and their ideological beliefs on their perceptions of downsizing.
**********
In the last two decades, considerable research has been devoted to the topic of organizational downsizing, which is usually defined as intentional workforce reduction by an organization (see McKinley, Zhao, & Rust, 2000 for a recent review of this literature). Downsizing research has expanded with the increased incidence of downsizing in large corporations and the emergence of downsizing as an institutionalized management practice (McKinley, Sanchez, & Schick, 1995). Baumol, Blinder, and Wolff (2003) pointed out that 57% of the American Management Association members were considered job eliminators in 2000-2001.
The most extensive stream of organizational downsizing research to date has been concerned with the effects of downsizing on the financial performance of organizations. The basic conclusion of this stream of research is that the financial benefits often claimed by managers for downsizing and layoffs are uncertain (see, for example, Cascio & Young, 2003; Cascio, Young, & Morris, 1997; De Meuse, Bergmann, Vanderheiden, & Roraff, 2004; De Meuse, Vanderheiden, & Bergmann, 1994; Kets de Vries & Balazs, 1997; Mentzer, 1996).
Complementing this research, another stream (Leana & Feldman, 1992; Leana & Ivancevich, 1987; Pugh, Skarlicki, & Passell, 2003) has studied the influence of downsizing on its victims--those employees who lose their jobs. This work suggests a number of detrimental physical and psychological consequences associated with downsizing-related job loss. Yet a third research stream (Brockner, 1988; Brockner, Grover, Reed, DeWitt, & O'Malley, 1987; Brockner, Spreitzer, Mishra, Hochwarter, Pepper, & Weinberg, 2004; Mishra & Spreitzer, 1998; Mone, 1997) focuses not on downsizing victims but on those individuals who remain after a downsizing has taken place--the survivors. Basic findings in this stream include the conclusion that the effects of layoffs on survivors are contingent on their relationships with those who lose their jobs, their perceptions of how the victims are treated, and their perceived control (Brockner et al., 1987; Brockner et al., 2004). There is also a growing body of work (Budros, 1999; Lamertz & Baum, 1998; McKinley et al., 1995; McKinley, Mone, & Barker, 1998; Mentzer, 2005) that addresses downsizing from neo-institutional and ideological perspectives. This research suggests that downsizing is now taken for granted by managers and supported by specific ideologies that they and their employees share.
Supporting this idea of downsizing as taken for granted are articles in the popular press focused on how to implement downsizing (Colliver, 2001; Dunham, 2001; Kidwell, 1995). These articles represent a movement to try to identify the factors that translate into successful organizational downsizing. Often this approach emphasizes the need for restructuring rather than just workforce reduction to cut costs. Researchers like Cascio (1998) call for "responsible restructuring" which focuses on understanding that the value of employees is in viewing them as assets instead of costs.
With few exceptions, the studies of downsizing cited above have conceptualized downsizing as an objective phenomenon, and only a handful of studies have dealt with observers' perceptions of downsizing. Those reports (e.g., Edwards, Rust, McKinley, & Moon, 2003; Skarlicki, Ellard, & Kellin, 1998) have investigated observers' perceptions of downsizing along single dimensions, such as the perceived procedural justice of a layoff (Skarlicki et al., 1998) or the perceived psychological contract breach entailed in downsizing (Edwards et al., 2003). No empirical investigation, to our knowledge, has analyzed observers' perceptions of organizational downsizing along multiple dimensions, as we do in this study.
In this paper we conceptualize and measure perceptions of organizational downsizing along four distinct dimensions: the degree to which downsizing is perceived as financially effective; the degree to which downsizing is perceived as inevitable; the degree to which downsizing is perceived as a liberating event for its victims (Noer, 1993); and the degree to which downsizing is perceived as a breach of the implied employment contract between employer and employee (Rousseau, 1995). The selection of these dimensions was based on their widespread discussion in business research and the popular business press and their potential role in influencing observers' reactions to downsizing events. For example, the ideas that downsizing is financially effective and inevitable appear as two prominent claims in the popular press (Byrne, 1994; Dentzer, 1995; Haseltine, 1994). Likewise the discussion of downsizing as liberating has been a salient feature of books written by consultants (e.g., Noer, 1993). The fourth dimension, the degree to which downsizing is perceived as a breach of the implied employment contract, has been studied by previous researchers (Edwards et al., 2003; Rust, McKinley, & Edwards, 2005; Rust, McKinley, Moon, & Edwards, 2005) and including it in this study provides for a replication and extension of those results using a different data set than those earlier investigations. We believe that the four perceptual dimensions described above are important because they likely influence the acceptability of downsizing to the perceiver, and therefore may influence whether the perceiver is willing to embrace downsizing as a taken-for-granted management practice (McKinley et al., 1995).
To predict variations in respondents' perceptions of organizational downsizing, we focus on the respondent's past experience as a layoff agent, specifically whether or not the respondent has ever assisted in the implementation of a layoff or downsizing initiative in an organization for which (s)he has worked. Drawing on the cognitive dissonance framework (Festinger, 1957; Harmon-Jones & Mills, 1999), we develop a theory about how experience as a layoff agent affects perceptions of downsizing along our four dimensions and test hypotheses derived from that theory. In articulating our theory, we consider cognitive dissonance a mediating construct that explains the effects of layoff agency on perceptions of organizational downsizing. This mediating construct is not measured in our empirical analysis, a practice that is consistent with the use of mediating constructs in many organizational theories (e.g., Hannan& Carroll, 1992).
In conducting our hypothesis tests, we hold constant the effects of four ideological beliefs about business that were investigated in past studies (Rust & McKinley, 2002; Edwards et al., 2003; Rust, McKinley, Moon, & Edwards, 2005). These control variables measure the degree to which each respondent believes in the ideology of market competition, the ideology of shareholder wealth, the ideology of employee worth, and the ideology of employee self-reliance. The ideology of market competition is defined as the belief that market competition is beneficial for industries, customers, and organizations (Rust, McKinley, Moon, & Edwards, 2005). The ideology of shareholder wealth is defined as the belief that shareholder value should be the dominant criterion for management decision making (Rust, McKinley, Moon, & Edwards, 2005). The ideology of employee worth is defined as the belief that employees are the most valuable corporate resource because they provide critical inputs to business processes (Rust, McKinley, Moon, & Edwards, 2005). Finally, the ideology of employee self-reliance is defined as the belief that employees should be as independent of employers as possible, particularly regarding their own employability (Edwards et al. 2003; McKinley et al., 1998).
We also control for the respondent's past experience as a layoff victim--whether (s)he has ever lost a job as a result of an organized workforce reduction--and the respondent's demographic attributes, for example age, educational level, and gender. These controls allow us to test for the independent effects of layoff agency on perceptions of organizational downsizing over and above the effects of ideological beliefs, layoff victim status, age, educational level, and gender. We discuss our findings at the end of the paper, and derive implications for future theory and research.
This paper is important because it is the first to study perceptions of downsizing along multiple dimensions and contains the only data set we are aware of that measures perceptions of downsizing along multiple dimensions. Building upon past research studying a single dimension, this paper increases the sensitivity to multiple dimensions of perceptions of downsizing. An important implication of this paper is that if layoff agency does influence perceptions of downsizing, past layoff agency experience may play a role in determining the palatability of downsizing for the respondent. For example, if a respondent's past experience as a layoff agent causes that respondent to perceive downsizing as more inevitable, that respondent may also view downsizing more favorably, and may be more willing to accept it as a taken-for-granted practice.
Theoretical Background
In developing hypotheses to predict the effects of layoff agency on perceptions of organizational downsizing, we draw on cognitive dissonance theory (Festinger, 1957; Harmon-Jones & Mills, 1999). Cognitive dissonance theory argues that when an individual has two inconsistent cognitions, or a cognition that is inconsistent with a behavior the individual has engaged in, the individual will experience a state of discomfort called cognitive dissonance. Since cognitive dissonance is uncomfortable, the individual will be motivated to find ways to reduce it. According to cognitive dissonance theorists (Festinger, 1957; Harmon-Jones & Mills, 1999), there are a number of ways to reduce cognitive dissonance: the individual can change her behavior to be more consonant with her cognitions; the individual can modify her cognitions to be more consistent with her behavior; or the individual can deemphasize the importance of a dissonant cognition.
Festinger (1957) and Harmon-Jones and Mills (1999) used the example of smoking to illustrate the construct of cognitive dissonance and the various mechanisms of dissonance reduction. A smoker who is aware of research on the negative health consequences of smoking will experience cognitive dissonance because of the inconsistency between her smoking behavior and her cognitions about the effects of that behavior. The smoker can reduce cognitive dissonance by changing her behavior (quitting smoking); by modifying her perceptions of the health consequences of smoking so that she assumes away the negative consequences (I won't get cancer); or by adding a cognition that is consonant with the behavior of smoking (smoking helps me relax). Each of these behavioral or cognitive changes has the potential to move the smoker away from a state of cognitive dissonance and therefore to reduce discomfort.
Applying this reasoning to the situation of a layoff agent, we assume that if such a person has assisted in the conduct of a layoff at work, she will experience at least some degree of cognitive dissonance. This cognitive...
|
