This study investigates the effect of two downsizing-redesign strategies on business performance. A survey of the top 2000 manufacturing organisations in Australia, as defined by annual revenue, was conducted, and data was analysed using a structural equation modelling approach (SEM). Evidence suggests that down-sizing that drives redesign (reducing workforce size) has a negative effect on business performance. Conversely, redesign that drives downsizing (restructuring the organisation, redesigning tasks) has a positive effect on business performance.
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