The Organizational Impact on the Business Environment Term Paper by scribbler

The Organizational Impact on the Business Environment
A research paper that shows how organizations do not always make the correct strategic adjustments when their business environments are changing.
# 153133 | 3,524 words | 6 sources | APA | 2013 | US
Published on May 03, 2013 in Business (Management) , Business (Human Resources)

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This paper explores the literature to determine how organizations respond to changes in business environments such as shrinking sales or profits. The paper considers how downsizing improves organizational performance and finds that not only is downsizing unlikely to improve performance and result in economic benefits, it can be disruptive and will likely reduce stock price. The paper discusses the need to use downsizing "purposefully" rather than just cutting workers to reduce payroll and looks at the approach of risk managers in the midst of changes in the business environment. The paper concludes that the bottom line for organizations confronted with changing business environments is that simply gutting their talent base by laying people off is reckless and shortsighted.

Literature Review - When Business Environments Change
Literature Review - Downsizing and Organizational Trauma
Literature Review - Creative Downsizing in New Business Environments
Literature Review - Risk Managers Adjust for Changing Environments

From the Paper:

"An article in Management International Review discusses the impact on business environments when the company has been downsized due to shrinking sales or profits. The authors assert that the impact on a business environment and business performance may be "curvilinear (inverted U-relationship)" (Krishnan, et al, 1998, p. 1). Although the changes in the global business environment that took place a dozen years ago seemed dramatic and even crisis-like, they were quite tame in comparison to the brutal international financial meltdown of 2008, 2009, 2010 and even into 2011. That said, it is nonetheless worthy to look at how business organizations relate and react to in strategic ways to significant changes in the environment.
"The downsizing in the late 1980s was due to a slowed-down economy, more effective competition, "excess capacity," a great deal of diversification through acquisitions, deregulation and "hierarchical organizational structures" (Krishnam, p. 1). And so companies downsized, and in fact Krishnan asserts "more than 85% of the Fortune 1000 firms" actually downsized (laid off employees), and more than 5 million jobs were lost in those organizational changes. So, did the layoffs result in economic benefits? According to some research (Cascio 1993, Bethel / Liebeskind 1993) the downsizing did not result in the benefits that were expected."

Sample of Sources Used:

  • Amabile, Teresa M., and Conti, Regina. (1999). Changes in the Work Environment forCreativity During Downsizing. Academy of Management Journal, 42(6), 630-640.
  • Krishnan, Hema A., and Park, Daewoo. (1998). Effects of top management team change onPerformance in downsized US companies. Management International Review, 38(4), 1-12.
  • Nag, G. C., and Pathak, R. D. (2009). Corporate Restructuring: A Boon for Competitive Advantage. Advances in Competitive Research, 17(1&2), 21-35.
  • OECD Observer. (2009). Recession provides tough stress test for global transfer pricing rules:multinationals planning for economic recovery need to redraw their transfer pricing policiesin the new environment. Retrieved January 30, 2011, from General Reference Center Gold.
  • Troy, Edward G. (1997). Navigating the global market (impact on international expansion onRisk management). Risk Management, 44(8), 14-19.

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APA Format

The Organizational Impact on the Business Environment (2013, May 03) Retrieved May 26, 2022, from

MLA Format

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