Firm, industry, and strategy influences on choice of downsizing approach

Abstract

This study represents a step toward a more sophisticated and grounded understanding of downsizing. The author sharpens the concept of downsizing by identifying and distinguishing among different resource-reduction approaches. Then, drawing upon exit and mobility barrier theory, firm, industry, and strategy influences on choice of downsizing approach are examined. Findings suggest that characteristics of a firm's resources and the resale market for those resources differentially influence broad and focus firms' choice of downsizing approach. © 1998 John Wiley & Sons, Ltd.