Deck 10: Downsizing and Restructuring

Question 1

Outsourcing refers to the reabsorbing of excess or inappropriately placed workers into a restructured organization.

Answer 1

False

Question 2

Work redesign is a short-term strategy,whereas workforce reduction is a medium-term strategy.

Answer 2

False

Question 3

There is considerable evidence that workforce reduction programs ultimately achieve their objectives of cutting costs.

Answer 3

False

Question 4

When rationalizing decisions about downsizing,many managers will rely on economic,accounting,and revenue-based rationales.

Question 5

Interactional justice refers to the interpersonal treatment employees receive during the implementation of the downsizing decision.

Question 6

Asking employees to take voluntary sabbaticals is one medium-term solution to avoid downsizing.

Question 7

Inplacement provides a program of counselling and job search assistance for workers who have been terminated.

Question 8

Downsizing is unlikely to disappear in the future because it helps to alleviate the huge financial burdens facing many organizations.

Question 9

Some researchers have found evidence that the longer a person is unemployed,the higher the person's risk for suicide.

Question 10

One issue that has received little attention is the effect of downsizing on the organization's reputation for corporate social responsibility.

Question 11

Downsizing may be considered a breach of the unwritten employment contract between employers and their employees.

Question 12

Systematic change is a short-term strategy.

Question 13

Outplacement is providing a program of counselling and job search assistance for workers who have been terminated.

Question 14

Downsizing can be linked to less innovation and more protection of one's turf.

Question 15

"High-involvement human resource management" deals with treating people as expenditures.

Question 16

Many downsizing efforts fall short of meeting organizational objectives,and are carried out with little strategic planning or consideration of the costs to the individuals and the employer.

Question 17

There are three types of downsizing strategies: workforce reduction,work redesign,and systemic change.

Question 18

Distributive justice refers to the rules used to determine which employees will be downsized.

Question 19

Research evidence indicates that downsizing creates job insecurity and low job satisfaction,which are related to greater safety compliance because employees do not wish to be hurt on the job.

Question 20

Negative consequences of downsizing might be minimized with greater communication and employee participation.

Question 21

According to the textbook,what is the most common benefit provided to displaced workers?

A) job referral service
B) benefits continuation
C) family counselling
D) severance pay

Question 22

According to the textbook,what is the relationship between job loss and social withdrawal?

A) inverse relationship
B) no relationship
C) negative relationship
D) positive relationship

Question 23

Perceptions of fairness and equity play a key role in understanding how survivors react to a downsizing.What type of justice is associated with the procedures or rules used to determine which employees will be downsized?

A) procedural
B) interactional
C) distributive
D) manipulative

Question 24

There are three types of restructuring: portfolio,human capital,and organizational.

Question 25

Historically,what issue necessitated so much of the emphasis on downsizing today?

A) organizations focused on growth
B) organizations focused on the bottom line
C) organizations focused on competitive advantage
D) organizations focused on stock prices

Question 26

The research evidence suggests that downsizing creates job insecurity,which is strongly associated with low levels of safety motivation.

Question 27

What do you call an employee who remains with an organization after a downsizing?

A) employed
B) victim
C) survivor
D) talented

Question 28

What time horizon is generally associated with systematic change related to downsizing and restructuring?

A) immediate
B) short-term
C) medium-term
D) long-term

Question 29

Why do organizations with high-involvement work practices suffer more from downsizing than those with fewer such practices?

A) High-involvement work practices are costly to maintain.
B) High-involvement work practices are for elite employees.
C) High-involvement work practices require a cultural buy-in.
D) High-involvement work practices are linked to competitive advantage.

Question 30

What type of justice focuses on the interpersonal treatment employees receive during the implementation of the downsizing decision?

A) procedural justice
B) interactional justice
C) distributive justice
D) manipulative justice

Question 31

Which of the following is a medium-term alternative to downsizing?

A) exit incentives
B) hiring freeze
C) mandatory vacation
D) reduced overtime

Question 32

Many organizations are reactive to downsizing instead of proactive.

Question 33

In today's workplaces downsizing is a proactive strategy that gives priority to worker health over increasing organizational performance.

Question 34

In the Bowater Mersey downsizing in 2011,what was the most significant ethical departure,from the employees' perspective?

A) Employees linked their concerns to the "Occupy Wall Street" movement.
B) Only 52 percent of union members voted in favour of the downsizing initiatives.
C) More than 56 percent of the workforce was scheduled to be reduced.
D) Two senior executives received multi-million dollar severance packages.

Question 35

Offshoring occurs when an organization moves work to foreign entities outside the company.

Question 36

A psychological contract is a written commitment between employers and their employees that guarantees job security and rewards for loyal behaviour.

Question 37

Perceptions of fairness and equity play a key role in understanding how survivors react to a downsizing.What type of justice is associated with the interpersonal treatment employees receive during the implementation of the downsizing decision?

A) procedural
B) interactional
C) distributive
D) manipulative

Question 38

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
​
Which of the following is a medium-term cost adjustment that ConocoPhillips could consider to reduce costs?

A) exit incentives
B) hiring freeze
C) mandatory vacation
D) reducing overtime

Question 39

If an organization wants to achieve an effective restructuring,what is one strategy that it might implement?

A) outsourcing
B) rightsizing
C) designing
D) rationalizing

Question 40

An organization is implementing a downsizing strategy that requires the elimination of specific work processes and functions.What type of downsizing strategy is this organization executing?

A) culture redesign
B) workforce reduction
C) systematic change
D) work redesign

Question 41

According to the textbook,what is the main goal to be achieved if an organization is downsizing and restructuring with a systematic change strategy?

A) competitive advantage
B) environmental scanning
C) scenario planning
D) continuous improvement

Question 42

What should union officials and management protect when anticipating potential downsizing and restructuring?

A) human rights of employees
B) positive labour relations programs
C) wage and benefit concessions
D) labour-management climate

Question 43

Which of the following is a short-term cost adjustment that an organization could consider to reduce costs?

A) exit incentives
B) extending reductions in salaries
C) voluntary sabbaticals
D) reduced work week

Question 44

An organization is paring back services.What type of downsizing strategy is it implementing?

A) systematic change
B) service reduction
C) work redesign
D) service cost cutting

Question 45

An organization is working with senior HR planners to develop a long-term downsizing strategy that changes not only the organization's culture and attitudes but also employees' values.The organization's goals are to reduce costs and enhance quality.What type of downsizing strategy is this organization developing?

A) downsizing
B) workforce reduction
C) work redesign
D) systematic change

Question 46

What organizational initiative provides a program of counselling and job search assistance for workers who have been terminated?

A) ethics
B) succession
C) outplacement
D) reintegration

Question 47

According to the textbook,what is the least commonly used restructuring and organizational change tactic?

A) across-the-board cuts
B) eliminating tasks
C) contracting out
D) use of part-time employees

Question 48

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
​
ConocoPhillips is NOT taking a career management approach that would be aimed at absorbing displaced workers into other divisions of the organization? What is ConocoPhillips NOT doing?

A) ethical placement
B) inplacement
C) outplacement
D) replacement

Question 49

Which of the following is a medium-term cost adjustment that an organization could consider to reduce costs?

A) exit incentives
B) hiring freeze
C) mandatory vacation
D) reduced overtime

Question 50

In the research by Classen and Dunn,what is one of their major findings?

A) The risk for suicide increases with long periods of unemployment.
B) Losing a job can have positive benefits.
C) Employees are more likely to quit following a downsizing.
D) Cost-cutting is unlikely to disappear in the future.

Question 51

What is one issue that has received little attention relative to downsizing?

A) reputation for corporate social performance
B) pension contributions and defined benefits
C) effects on long-term profitability and debt
D) employee satisfaction of survivors

Question 52

What is one HR program associated with embeddedness,given that downsizing is unavoidable?

A) flextime
B) off-site child care
C) defined-contribution plans
D) severance pay

Question 53

According to Pfeffer,which of the following happens first when a layoff is announced?

A) Companies lose people they don't want to lose.
B) Morale declines and fear rises in the workplace.
C) People head for the door who have not been laid off.
D) Motivation,commitment,and job satisfaction decline.

Question 54

According to the textbook,what is the least common benefit provided to displaced workers?

A) job search support
B) benefits continuation
C) retraining assistance
D) severance pay

Question 55

An organization is NOT taking a career management approach that would be aimed at absorbing displaced workers into other divisions of the organization.What is this organization NOT doing?

A) ethical placement
B) inplacement
C) outplacement
D) replacement

Question 56

How do you define job insecurity?

A) expectations about continuity and life employment
B) overall concern about the future existence of a job
C) inability to predict future employment
D) understanding of negative implications of job analysis

Question 57

According to a poll of almost 7 000 employees discussed in the text,what personal strategy would the majority of individuals implement if they heard that their company was planning layoffs?

A) visit a lawyer and be aware of their legal rights
B) search for a new job before the layoffs occur
C) make sure that they remain invisible to the managers
D) spend more time at the office and less with family

Question 58

What is another term that experienced downsizers might use to describe a workforce reduction or realignment?

A) reinventing
B) reorganizing
C) redistributing
D) revectoring

Question 59

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
​
Which of the following is a short-term cost adjustment that ConocoPhillips could consider to reduce costs?

A) exit incentives
B) lending workers
C) extending reductions in salary
D) reducing overtime

Question 60

Perceptions of fairness and equity play a key role in understanding how survivors react to a downsizing.What type of justice is associated with the fairness of a downsizing decision?

A) procedural
B) interactional
C) distributive
D) manipulative

Question 61

What is an essential component that is necessary for senior management prior to developing a downsizing strategy?

A) knowing financial indicators
B) scanning the external environment
C) communicating with employees
D) creating a culture of trust

Question 62

What type of strategy requires an organization to focus on work process and to assess whether specific functions,products,and/or services should be eliminated?

A) downsizing
B) workforce reduction
C) work redesign
D) systematic change

Question 63

When survivors of downsizing continue to work for an organization,there are several impacts on them personally.Which of the following is NOT an impact experienced by survivors?

A) compliance with workplace safety
B) negative attitudes and behaviours
C) reduced performance capabilities
D) lower organizational productivity

Question 64

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
ConocoPhillips is implementing a downsizing strategy that requires the elimination of specific work processes and functions.What type of downsizing strategy is it adopting?

A) downsizing
B) workforce reduction
C) work redesign
D) systematic change

Question 65

What are four of the reasons that organizations downsize?

Question 66

If employees believe that they will be rewarded for loyal service and feel protected by job security,what type of contract do they have?

A) employment contract
B) psychological contract
C) union contract
D) long-term contract

Question 67

Identify an organization you are familiar with that is embarking on a downsizing strategy (such as from your work experience or from the course textbook).Describe four key issues the organization would want to consider in its HR planning.

Question 68

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
​
ConocoPhillips is providing job referral services and job search assistance for workers who have been terminated.What is this organizational initiative called?

A) ethics
B) succession
C) outplacement
D) reintegration

Question 69

What is one challenge that managers must confront when managing in times of uncertainty and potential downsizing?

A) focusing on the short term
B) paying attention to middle management
C) controlling the rumour mill
D) taking charge and minimizing involvement

Question 70

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
​
Which of the following is a short-term cost adjustment that ConocoPhillips is implementing to reduce costs?

A) exit incentives
B) exploration work shutdowns
C) extending reductions in salary
D) voluntary sabbaticals

Question 71

​ConocoPhillips
The Canadian arm of ConocoPhillips is one of Canada's largest oil and gas exploration and production companies.ConocoPhillips cut 1 000 jobs early in 2015 and will be eliminating around 1 810 more positions by the end of 2015 due to company losses in the millions,the result of the low oil prices.The CEO stated that the company is eliminating 10 percent of its workforce this year.ConocoPhillips plans to eliminate more than 400 jobs and 100 contractors in Canada.The CEO further stated that the company needs to cut jobs to ensure that the company becomes more competitive.
ConocoPhillips is preparing for a period of lower and more volatile oil prices and has cut back its spending forecasts.The company is also paring back its deep water exploration and Alberta oil sands projects.ConocoPhillips shares have fallen 41 percent over the last year,reaching their lowest price in five years.
Throughout your case incident analysis,assume the role of a human resources consultant.Your task is to advise the organization on how it should align its strategic human resource planning with its organizational strategy.Begin by clearly and succinctly stating the problem and/or opportunity,its impact,and why it is important that these problems/opportunities are addressed.Analyze the causes of the problem/opportunity,identify solutions,and recommend a plan for implementation and justification.Please be specific about the approaches and methods you would recommend to facilitate the workforce downsizing process.

Question 72

Which of the following programs is NOT typically associated with high-involvement human resource management?

A) self-managed work teams
B) continuous improvement
C) incentive compensation
D) selective training