The Influence of Organizational Downsizing on Organizational Performance

Global headwinds of change have created a volatile, uncertain, competitive and ambiguous (VUCA) environment, which has perplexed business organizations now a days.With the backdrop of twisters like Global economic recession, Euro zone turmoil, Chinese recession and Brexit problem, organizations are nonplussed and are forced to reassess their business structures and strategies. Along with this the issues of fluctuating foreign exchange, fickle financial markets & soaring inflation are posing serious challenge to financial and operational issues in modern organizations. In an obscure scenario of weakening external demand, firms in IT sector especially, are striving hard to retain the foothold by arresting their soaring costs and plummeting profits. The fundamental assumption of 'consistency & congruence' for organizational performance are being blown to air and organizational downsizing has become the 'strategy of choice' for many of the big companies these days. The present study is about conflict & inconsistency arising from downsizing strategy adopted by Infosys which it considered as desirable process for organizational performance. The impact of 'convergence downsizing' on organizational performance, as well as employees' organizational citizenship behavior (OCB-O) and performance has been studied in this correlational research. Exploratory Factor Analysis Technique has been used to identify the factors like Civic Virtue and Sportsmanship indicating Organizational citizenship behavior (OCB-O) which affects the employees' and organizational performance. Cronbach Alpha, AVE, Square Root AVE have been used to measure Reliability and Validity of constructs, whereas the relationship between these has been studied by Correlation and Regression techniques. Certain financial ratios like Operating Profit ratio, ROA, ROS and Value Added per Employee have also been assessed to adjudge the organization's financial performance