Proposal for Study into Paradigm Shifts within Organizations due to recession

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

As the economy continues to bleed jobs due to the current global financial crisis (Dispatch Online, 2008), employees are bearing the brunt of the economic crisis. Numbers show that more than 70,000 jobs have already been cut in the third quarter of 2008 and unions fear even more job losses (Statistics South Africa cited in, 2008). These fears proved valid as more than 770 000 employees in South Africa have lost their jobs in the past 12 months, since the start of the economic crisis in the third quarter of 2008 (Statistics South Africa cited in, 2009). As many retrenchment processes still needed to be finalised, unions now fear that job losses for 2009 will pass the one million mark by the next quarter (Solidarity cited in, 2009). While there has been a lot of debate on the ultimate long- and short term effectiveness and benefits that retrenchment holds for an organisation, there is a definite human impact (Levitt, Wilson & Gilligan, 2008, p.13). Until recently, the survivors of retrenchment were considered fortunate and the general consensus was that survivors should/would be grateful to have kept their jobs (Appelbaum, Delage, Labib & Gault, 1997, p.278; Levitt et al., 2008, p.13). But is it really so simple? What is the impact of losing co-workers on those that stay behind?

Previous research results indicate that survivors of retrenchment are less productive, operate on high stress levels, distrust the company and management and feel reduced job satisfaction (Appelbaum, Delage, Labib & Gault, 1997; Cianco, 2000; Kaye, 1998). This is in sharp contrast with the general, naive consensus considering only the positive impacts and expectation of survivors.

The growing number of articles on best practises in downsizing processes, suggest a growing realisation that mismanaged reductions can have significant negative consequences amongst the remaining employees (Brockner, Caudron, Beam & Pine, Boroson & Burgess, in Wiesner et al., 1999, p.390). These employees generally experience a new psycho-social problem - downsizing survivor syndrome (Appelbaum et al., 1997, p.278 & Wiesner, Vermeulen & Littler, 1999, p.390).

The value of this study lies in providing some understanding of the impact of downsizing on the survivors, as they are the employees the company will rely on to move forward. By understanding the attitudes, behaviours and emotions of survivors, a clear perspective of the true short and long term effects of downsizing can be derived (Levitt et al., 2008, p.13). Retrenchments have become increasingly prevalent in South Africa, affecting not only those who are retrenched, but also the survivors of the retrenchment process.

The downsizing survivor syndrome - and the experiences of downsizing survivors - is an area under extensive discussion in the international economic and social arena. However, despite the fact that retrenchment survivors are the linchpin of a company's future profitability, limited research on their experiences is available in South Africa (Morar, 2004).

problem statement

Previous research on the downsizing survivor syndrome and the related experiences of downsizing survivors is largely based on research and data from the USA and Canada. An extensive search of the EbscoHost, Emerald and SABINET databases specifically indicate that no studies have been conducted to gain an understanding of the experiences of retrenchment survivors in the automotive industry in the midst of a global economic crisis. Only one study has been conducted to investigate the experiences of retrenchment survivors within the South African context (Morar, 2004).

With a few exceptions, most of the research on the effects of retrenchments on survivors is limited by its laboratory orientation. Although valuable, it has not captured the gut-wrenching trauma or examined the true emotional depth of survivor syndrome (Noer, 1993, p.52).


Organisations are in the midst of a fundamental paradigm shift. Understanding these paradigm shifts is imperative for organisations struggling to compete in the new global economy (Noer, 1993, p.16). To this end, the purpose of this study is to explore the experiences of the survivors of retrenchment in the automotive industry.


The objectives of the study are as follows:

To explore and describe the perceptions and experiences of survivors of retrenchment in the automotive industry.

To explore the areas of concerns of the survivors of retrenchment.

To provide guidelines for organisations that are contemplating, or have already commenced, with retrenchments to reduce the anticipated negative effects of the retrenchment process.

importance and benefits of the proposed study

Corporations downsize due to a need to reduce costs, a decline in bureaucracy, to facilitate quicker decision-making and smoother communication, to encourage greater entrepreneurship and to attain an overall increase in profitability (Appelbaum et al., 1997, p.279; Wright & Barling, 1998, p.339). However, results of previous studies indicate that companies often do not anticipate, and prepare for, the lower morale and lower productivity experienced by the survivors of downsizing (Appelbaum et al., 1997, p.279). These negative effects often negate the benefits to be obtained from downsizing.

The focus of this study will be on the personal experiences of survivors in an automotive manufacturer that has implemented downsizing as a strategy in response to some form of organisational change. The value of this study lies in providing an understanding of the impact of downsizing on the survivors, as they are the employees the company will rely on to move forward. By understanding the attitudes, behaviours and emotions of survivors, a broader perspective of the true short and long term benefits of downsizing can be derived (Levitt et al., 2008, p.13). Further this, by appreciating the experiences of the retrenchment survivors, guidelines on how best to utilise, treat and assimilate retrenchment survivors within the company as a means towards improving organisational effectiveness will be developed.

In order to contextualise this study, the delimitations and assumptions of the study will be discussed in the subsequent section.

delimitations and assumptions


The proposed study has several delimitations related to the context, constructs and theoretical perspectives of the study. Firstly, the study will endeavour to obtain a 360° view of the experiences of survivors at an Automotive Manufacturer working in a single office environment. As such, the study will examine only the experiences of the retrenchment survivors in this context, regardless of any other aspects such as gender and race.

Secondly, the study's literature review will primarily be limited to literature from the discipline of human resource management, social psychology and industrial psychology, including literature on change management, organisational development, business management and strategic human resource management. Literature from related disciplines such as communication management, clinical psychology and psychoanalysis will only be consulted in passing.


An assumption is "a condition that is taken for granted, without which the research project would be pointless" (Leedy & Ormrod, 2005, p.5). Several basic assumptions underlie the proposed research study. It is assumed that:

Participants are able and willing to provide the data required for the study;

Participants are able and willing to provide honest answers to the questions asked in the study;

Survivor syndrome is a recognisable phenomenon within an organisation;

Qualitative research is an appropriate means to explore this human phenomenon;

Company X complied with the Labour Relations Act 66 of 1995 provisions regarding retrenchments (as amended) s189 and s189 (a).

Several concepts will be repeatedly referred to throughout this study. Several of these key terms are defined in the subsequent section.

definition of key terms


A distinction must be made between redundancy and retrenchment. Redundancy can be described as eliminating a particular job; or as a state of superfluity, while retrenchment can be described as the action or process of the employer terminating the employees' employment as they have become superfluous due to the need to reduce costs brought on by an economic downturn (Beumont cited in Westerman-Winter, 2007).

The term retrenchment is generically used to refer to all employee reductions for operational reasons and excludes reductions based on performance (Noer, 1993, p.13). According to section 213(53) of the Labour Relations Act (66/1995) as amended, defined operational requirements as "requirements based on the economic, technological, structural or similar needs of an employer".

While each term may have its own connotation, they do share a common meaning which is suggestive of a deliberate decision to reduce the workforce with the intention of increasing organisational performance.

Variety of stakeholders

The retrenchment process affects a variety of stakeholders. These stakeholders are the survivors, the implementers, the retrenchment victims and the retrenching organisation.

The victims refer to those who are divorced from the organisation, while the survivors refer to those employees who remain in organisational systems after employee reductions Noer, 1993, p.13). Those that are accountable for the execution of the retrenchments (usually top management) are referred to as the implementers (Noronha & d'Cruz cited in Westerman-Winter, 2007, p.6).

These stakeholders will be referred to as such throughout the study.

Survivor syndrome

Survivor syndrome is a generic term used to describe a range of feelings, attitudes and perceptions experienced by employees who remain in an organisation after it has gone through the process of retrenchment and re-organisation (Noer, 1993, p.13). Although there might be initial relief at keeping one's job, research reveals that this turns to feelings of betrayal by management, anger against management, guilt at keeping one's job and uncertainty; both about the survivors current roles and about job security (Cianco, 2000; Appelbaum et al., 1997; Wiesner et al., 1999 & Levitt et al., 2008). Employees with survivor syndrome has often been described as having a reduced desire to take risks, a lowered commitment to the job and a lack of spontaneity (Noer, 1993, p.13). The consistent decrease in morale can lead to a decrease in performance and an increase in stress.

Original equipment manufacturer

According to Corus Automotive (2009), "this refers to a manufacturer of vehicles that provides the original product design and materials for its assembly and manufacture".

Table 1.1: Abbreviations used in this document




Original Equipment Manufacturer


This study has seven core components. Chapter two provides a comprehensive discussion of the methodology used in this study, followed by a review of the current literature on the global economic crisis and the impact on South Africa and the automotive industry, with specific reference to retrenchments. Following this, the current, specific academic literature on survivor syndrome will be discussed followed by a description of the methodology utilised in the course of this study. The subsequent chapter will entail a discussion of the results with the study concluding with relevant recommendations.