SYSTEMS THINKING and LEARNING ORGANIZATIONS

In the years 1987-1991, more than eighty-five percent of the Fortune 1000 companies downsized their white collar staffs (Cameron & Freeman, 1993). During the first seven months of 1993, 350,000 workers faced terminations due to reductions in force (Richman, 1993). January, 1994 had even higher rates of terminations. These have all been intentional reductions in the size of staffs undertaken with the goals of achieving cost reduction, increased productivity, and greater profitability. The evidence suggests that those goals have not been met. Studies have suggested that although the first year may show increased profitability, this is short-lived, as the following year does not produce the same results. Performance never matches the pre-downsizing efforts. Rather, companies have been faced with such negative consequences as decresed morale, commitment and work effort of the survivors (McKinley, Sanchez, & Schick, 1995). The authors propose that the reason companies continue this practice in spite of contrary evidence is "institutional rules". These rules serve as myths which perpetrate and perpetuate common practices. They warn that managers be aware that downsizing may be partly driven by social forces rather than predictable financial results, and that the long-term health of the corporation may be sacrificed for short-term gains. Certainly there is an aspect of companies following others' examples. The practice of benchmarking for "best practices" has become a common one; however, the degree with which these "best practices" are adopted are probably quite variable. Every organization has unique qualities that require unique actions. Yet, when these "adoptions" fail to meet expectations, managers wonder why (Day, 1994).