The concept of Downsizing

The concept of downsizing has to do with the re-sizing, structural level of an organization and should lead, by implication, to improved systems of work, organizational redesign and establishment of adequate staffing to maintain competitiveness. Strictly speaking, this means a reduction in staffing, but in general, expresses a number of strategies to Rightsizing (optimal size of the organization) and Rethinking (rethink the organization) with the effect the latter re organizational focus on activities that do generate added value. As might be expected, there are functions / processes / departments involved in the process of downsizing who in one way or another, generate value for this organization and alienate it to the core business or represent a budgetary and direct the administrative cost taxpayers.

It is important to note adequately the process of downsizing the organization, understood as proactive, and as anticipation and preparation for possible changes in the environment and not reactive, in response to an event and without a prior plan. In the first case, you can expect quick results, adequate and predictable under a controlled environment, allowing a smooth transition. The second case involves the risk of potential transition problems by reducing staffing in response only and without a proper diagnosis, under inadequate work climate and negative impact on business efficiency. A well-executed process of downsizing the organization will result in a significant costs reduction outsourcing certain functions / processes / departments that are not part of the core business and leading in a more lightweight and flexible organization ; more prepared to adapt quickly to changing environmental conditions.

What are the optimal conditions to carry out a process of downsizing? First, it should be clear what functions, processes or departments are either outsourcing or, alternatively, removing. It is likewise desirable to establish in advance a change management plan and the set of tools to carry out. Finally, it is convenient the timing for implementation and stabilization as well as a plan to maintain and improve performance while consolidating the process.

Some concepts related to the process of downsizing:

Resizing: One could say that it arises as a result of a downsizing policy which has resulted in reduced productivity or increased negative results. It appears as a breakthrough but only partially improves performance, productivity and efficiency of organizations.

Rightsizing: "Measuring right" is an approach that favors the overall strategic quality, efficiency and the achievement of benefits from a flexible organization. It involves the creation and innovation in new products, new services and new market from the customer's needs (delighting and seducing). We propose a process trough strong communication to and from the costumer.

Basic principles of Rightsizing:

• Analyze and eliminate any activity, process or area that does not add value
• Reduce processes, making them short, simple and productive
• It promotes the decentralization of decisions, changing the attitude of the staff from a mere executor of a participatory decision-maker. Obviously this requires a commitment from the individual and strategic management in this regard. The results will reflect a strategic management of change, opportunity and new forms and tools of administration.