Other Organizations Are Doing It, Why Shouldn't We? A Look at Downsizing and Organizational Identity through an Institutional Theory Lens

Downsizing is a current ‘hot-button’ issue confronting many organizations and enticing researchers alike. This case study explored the complex nature of these change initiatives, through both macro-environmental antecedents and non-financial organizational consequences. The adoption of downsizing was conceptualized through an institutional theory lens, and an organizational identity perspective to downsizing outcomes was applied, paying particular attention to the alignment of post-downsizing activities with the organization's mission. The case study examined the events leading up to the implementation of a downsizing initiative at a major university and then the post-implementation restructuring aftermath. It is demonstrated how organizational change can result in less-than-expected outcomes if the planning and implementation phases receive inadequate attention. Suffering from severe fiscal stress, decision makers mimicked a popular downsizing initiative without a thorough diagnosis, ultimately creating an environment for ineffectiveness. Specifically, a severe miscalculation in the number of faculty retirees resulted in academic chaos: a decrease in the classes offered; loss of administrative and student services; and loss of faculty achievements along with university name recognition. Most notably, a majority of retiree research endeavours were eliminated; a shocking outcome that conflicts with the mission of a major research university.