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DOWNSIZING CAN HAVE ITS UPSIDES, SAYS BUSINESS MAGAZINE

 CLEVELAND, May 14 /PRNewswire/ -- Downsizing in corporate America, the grail of the 1990s, is neither simple nor painless. It has hurt a lot of people -- former employees as well as those who have survived -- and, ironically, it has not been that soothing for companies either, notes Industry Week magazine in its May 17 issue.
 A recent survey of 271 U.S. manufacturers by Kepner-Tregoe, an international consulting firm, revealed a litany of disasters for companies that have taken the downsize route: plummeting morale, little or no quality improvement, and, ironically, not much improvement in most companies' bottom lines.
 Clearly, there are right and wrong ways to go about doing more with less. But, notes IW, it's easier than most companies think. Managers who've had success seem to be those who are open to new concepts and more interested in redeploying people than in shedding them. If one common theme is discernible in downsizing's success stories, it's that if a company thinks of what it's doing only in terms of downsizing (a negative aim at best), it will be unsuccessful. If, on the other hand, a company takes the economic opportunity to look at doing other things in the process, positive results can occur.
 Focusing on cost and nothing else (and some 60 percent of companies reportedly do) leads to erosion of both quality and morale. Better to stand back, look at the operation as a whole, then identify and correct possible internal snags before slashing payroll.
 It doesn't take a weatherman to detect that the long-standing employer-employee relationship is now shifting, partly as a result of downsizings, IW notes. Cost cutting almost always means job cutting. And now that the implied corporate lifetime-job promise has gone the way of the IBM mainframe, 60 percent to 70 percent of the workforce distrusts management. "If downsizing were used strategically and surgically and the company got better, you could say it was a success," one consultant told IW. "Unfortunately, cost cutting isn't always working, and there remains the possibility of more downsizing -- and more job reduction. Since there is so much employee distrust, there's also an increase in silent sabotage -- workers aren't enthused about their jobs and putting in the effort they once did. There is a big turn-off at every level of corporate life."
 But several new trends are emerging from the current corporate malaise. Some companies are taking steps to shift more people within the company. As for those left out of the inplacement process, small business is providing at least a 40 percent solution -- perhaps even one that is 60 percent.
 One byproduct of the current phase of downsizing: workers are getting away from the idea of being protected by the company. Instead, many are beginning to look at what talents they bring to the group. Workers, even nonexecutive workers, have to view themselves as a business, marketing their skills and knowledge on the basis of what they can bring to the company. It's no longer who you know, but what you know, and people have to offer added value to get employed and stay employed.
 Industry Week is the management magazine for industry published by Penton Publishing.
 -0- 5/13/93
 /CONTACT: Chuck Day of Industry Week, 216-696-7000, or 216-521-3861 after hours/


CO: Industry Week ST: Ohio IN: SU:

AR -- CLFNS1 -- 8416 05/14/93 07:34 EDT
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Date:May 14, 1993
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