Rightsizing the Multi-Divisional Firm: Individual Response to Change Across Divisions

Special Issue

Abstract

This study examines the changes in attitudes of 145 management employees involved in the rightsizing of a large multi-divisional Fortune 500 firm. The restructuring effort resulted in downsizing some divisions of the firm, while upsizing other divisions of the firm. Several divisions also remained unaffected by the corporate restructuring efforts. Differences in job satisfaction across individuals in these three situations were assessed both before and after the corporate restructuring effort. Individuals in divisions that were not affected by the rightsizing efforts experienced a significant decline in job satisfaction along with those in downsized units. Individuals moved to divisions that were upsized demonstrated little or no change in job satisfaction. These significant differences are explained using equity theory and literature examining the “survivor syndrome” in corporate layoffs.