The way a company approaches downsizing can make or break its performance. Using 355 undergraduates as their sample, the authors randomly assigned five-person teams to work on military-based command-and-control simulations. The teams’ performance was gauged first at full strength in control groups and then after one of three separate downsizing approaches was applied to the same groups.
The first approach was to maintain the hierarchy, eliminating one or more members but keeping the leader in place. The researchers found that performance suffered. They concluded that this was an undesirable option, because the structure of the unit and the behavior of its members didn’t change, and adapting behavior to the new working conditions is essential to maintaining performance during downsizing.
The second approach was to eliminate the hierarchy by removing only the leader and leaving the remaining team members as equals. The loss of the team leader prompted considerable behavioral and structural adjustments as the team worked to maintain performance levels. The authors wrote that this was the most successful of the downsizing methods.
The third downsizing strategy was to integrate the hierarchy. One team member was removed and the leader was demoted into the vacant job. Blending the leader into the rest of the team eliminated inefficient status differentiation. But the unit’s performance still declined more than that of the team that eliminated hierarchy, because the very presence of the former leader ensured that the other members didn’t depart from old behavioral and work patterns. [s+b annotation]
Source: “How Different Team Downsizing Approaches Influence Team-Level Adaptation and Performance”
Original Publication: strategy+business
Subjects: Management, Organizational Behavior
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