Changing the Established Measures of Organizational Performance

Establishing a direct link between downsizing and organizational performance is not an easy matter, however, as the following example will demonstrate. The Chief Executive Officer of Apple Computer recently bought himself more time with disgruntled shareholders by promising to take forceful action on a number of fronts, including downsizing. The executive cited "five crises: lack of cash; declining quality; a failed operating system development project; Apple’s chaotic culture; and a fragmented strategy". How do you connect downsizing, which is one of a number of actions being taken, with corporate performance, which is only one of a number of "crises" being solved in a manner and to a level that establishes a positive relationship?

Another reason that it is difficult to draw a specific link between downsizing and organizational performance is that there are many different variations and approaches to downsizing. A distinction has been made between proactive downsizing, which is planned in advance and usually integrated with a larger set of objectives, and reactive downsizing, which would be typified by cost-cutting as a last resort after a prolonged period of inattention to looming problems by management (Kozlowski et. al., 1991). Work force reductions