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Asia Pacific Journal of Human Resources, Vol. 43, No. 1, 98-116 (2005)
DOI: 10.1177/1038411105050309

The effect of downsizing-redesign strategies on business performance: Evidence from Australia

Mark A. Farrell

Charles Sturt University, Australia, mfarrell{at}csu.edu.au

Felix Mavondo

Monash University, Australia

This study investigates the effect of two downsizing-redesign strategies on business performance. A survey of the top 2000 manufacturing organisations in Australia, as defined by annual revenue, was conducted, and data was analysed using a structural equation modelling approach (SEM). Evidence suggests that down-sizing that drives redesign (reducing workforce size) has a negative effect on business performance. Conversely, redesign that drives downsizing (restructuring the organisation, redesigning tasks) has a positive effect on business performance.

Key Words: business performance • downsizing • redesign • restructuring


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