Advantages and drawbacks of using downsizing, technology, and acquisitions and mergers as a change strategy to tackle organizational challenges
The primary advantage of downsizing is cost saving. It helps businesses to cut costs since it is a reaction to a decline in sales and profits. Improved efficiency is another benefit of downsizing. This benefit attributes to the fact that downsizing helps organizations to reduce the unproductive workforce and restructure departments. Also, downsizing helps to improve labor mobility since it directs workforce to embrace new technologies and skills. De Meuse and Dai (2013), note that although downsizing results in positive financial outcomes, the gains do not happen in the short-term. Further, downsizing result in loss of skilled and experienced workforce. Additional, this strategy disrupts organizational systems which might impact productivity.
Technology has the potential of increasing productivity in an organization through various ways. First, it improves access to information which can be used to solve organizations challenges. Second, technology improves communication within the workplace and even social networking among the employees. The management can also use technology to educate subordinates in the workplace. Nevertheless, technology presents various disadvantages to a business including reduced competence and reluctance among the employees. Technology can also affect performance adversely when employees use it to conduct personal issues.
The benefits and shortcomings of mergers and acquisitions depend on the organizations' strategies and goals. Gaining power to control a certain market is the main advantage of mergers and acquisitions. Evidently, when companies combine their operations, they can control the demand and supply of particular commodities in a given market. Firms also enjoy economies of scale since merging and acquisition allow them to share resources. In the long run, the businesses realize cost reduction which offers them a competitive advantage. The disadvantages of mergers and acquisitions include loss of experienced employees, internal competition and conflicts and reduced flexibility. According to Marks (1997), the organizations might fail to achieve the perceived financial or strategic targets due to the selection of wrong partner or entering into an agreement at the wrong time.
References
De Meuse, K. P., & Dai, G. (2013). Organizational Downsizing: Its Effect on Financial Performance Over Time. Journal of Managerial Issues, 25(4), 324.
Marks, M. L. (1997). Consulting in mergers and acquisitions interventions spawned by recent trends. Journal of Organizational Change Management, 10(3), 267-279.
