A Sociocognitive Interpretation of Organizational Downsizing

Abstract

To better understand the phenomenon of organizational downsizing, we compare three theoretical perspectives on downsizing: the economic, the institutional, and the sociocognitive. We use the three perspectives to organize the growing empirical literature on downsizing, and we link streams of empirical work to the theoretical perspective that underlies each. With our sociocognitive model, we argue that downsizing has become institutionalized through the collectivization and reification of a “downsizing is effective” schema. We also discuss implications for future theory and research.