This study investigates the decision-making pattern of managers in the Israeli electronics industry. The purpose of the study is to examine whether decisions regarding work-force cutbacks in this industry follow Greenhalgh, Lawrence and Sutton's (1988) model of work-force reduction. Their model proposes that such decisions are made incrementally and hierarchically, ranging from lay-offs with no severance pay (the most severe strategy for employees' wellbeing), to hiring freeze (the least severe strategy for employees' well-being). The study hypothesis was that cutback decisions of Israeli managers followed this hierarchy, and that the likelihood of the hierarchical decision-making pattern was increased in groups characterized by non-Israeli national affiliation, public sector affiliation, corporate guaranteed employment policy and employment of temporary labour. It was also hypothesized that these characteristics determined the point at which cutback decisions enter the cutback strategies hierarchy. The results of the present study showed that Israeli managers, unlike their American counterparts, generally have not followed this strategic model. However, in a sub-group analysis it was found that the incremental model was used in those organizations characterized by affiliation with the public sector, by use of temporary labour and by guaranteed employment policy. The only characteristic found significantly to determine the entering point in the cutback hierarchy was sectoral affiliation. These findings are explained using four different theoretical approaches: (a) downsizing decision making (there is little evidence in literature of rational decision making under conditions of organizational stress); (b) cultural differences (Israeli managers, unlike their American counterparts are characterized by last-minute solutions and improvisations); (c) organizational context (the nature of the high-tech industry studied and its lack of downsizing experience); and (d) organizational politics (strong involvement of government and labour unions in the cutbacks process).
|Number of pages||18|
|Journal||International Journal of Human Resource Management|
|State||Published - 1996|
Bibliographical noteFunding Information:
The authors gratefully acknowledge grants given for this study by the Chief Scientist of the Ministry of Labor and Welfare in Israel, by the Golda Meir Institute for Social and Economic Research at Tel-Aviv University, and by the Fund of the Vice-President for Research at the Technion. We also wish to thank Yair Aharoni, Len Greenhalgh and Zacki Sheaffer for their helpful comments on earlier drafts of this paper.
- Cutback strategies
- Electronics industry
- Managerial decision making
- Organizational culture
- Work-force downsizing
ASJC Scopus subject areas
- Strategy and Management
- Organizational Behavior and Human Resource Management
- Management of Technology and Innovation