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The First Phase
The Second Phase
By the mid-1990s, factors such as increased investor awareness, stronger economies, fall in inflation, increasing national incomes, decrease in level of unemployment, and high profits, reduced the need for downsizing across the globe. However, just as the downsizing trend seemed to be on a decline, it picked up momentum again in the late-1990s, this time spreading to developing countries as well...
Lessons from the 'Downsizing Best Practices Companies
In the late 1990s, the US government conducted a study on the downsizing practices of firms (including major companies in the country). The study provided many interesting insights into the practice and the associated problems. It was found that the formulation and communication of a proper planning and downsizing strategy, the support of senior leaders, incentive and compensation planning and effective monitoring systems were the key factors for successful downsizing (Refer Exhibit II for highlights of this study)...
Exhibit I: Guidelines to Tide Over the Downsizing Phase
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