Downsizing and Globalization In the USA and the UK Assignment

Downsizing and Globalization In the USA and the UK - Assignment Example The cost is the international rationalization process, which is currently wreaking havoc in the labor market, particularly in certain parts of Europe. The primary reason for the adoption of downsizing and globalization strategies by firms is to achieve cost-cutting and increase revenue by capturing the global market (Scholte, 2005:132). However, this results in serious implication for the economy of the country of origin, as more workers lose their jobs and plunge into poverty, which significantly reduces the standards of living. The cost is the international rationalization process, which is currently wreaking havoc in the labor market, particularly in certain parts of Europe. The primary reason for the adoption of downsizing and globalization strategies by firms is to achieve cost-cutting and increase revenue by capturing the global market (Scholte, 2005:132). However, this results in serious implication for the economy of the country of origin, as more workers lose their jobs and plunge into poverty, which significantly reduces the standards of living. Reasons for Downsizing In essence, downsizing refers to the planned elimination of jobs or positions. Many corporations and business have used, or are likely to use, the strategy to achieve different goals. In the United States, for instance, approximately 43 million jobs were slashed off between 1979 and 1995. Evidently, this is a significant portion of the workforce (Archibald, 2009:321). Companies adopt downsizing measures due to a number of factors that affect the organizational and work structure, including computerization, consolidations, globalization, and divestment. These factors create a new attitude towards employment, a new workforce, and over and above all, reduced job morale, and security. The prevalent increase in global business has led to more competition in the marketplace (Slaughter and Swagel, 1997). In addition, the increasing rate of technological advancement enables businesses to achieve higher productivity and run their global businesses smoothly.  Often, companies are unable to keep up with the enormous technological advancement introduced into the market every month. The subsequent shift from producing products to providing services often leads to reengineering and downsizing of many companies. Companies employ downsizing strategies in financial attempts to produce larger revenue margins. Holding other factors constant, the fewer the employees a company has, the more productive and efficient the workplace. Conventionally, the remaining workers feel obliged to become more efficient in quality and speed, as well as the significant reduction in the use of company resources (Archibald, 2009:325).