Tuesday, February 25, 2014

Why Do Firms Downsize? - A study by Artur Victoria

Some of the downsizing craze may be pure herd behavior; if everyone else seems to be doing it, you should also. Some of this herd behavior may be induced by the financial markets In other cases, downsizing is a managerial response to inane incentives - for example, a division chief is told that her performance will be assessed based on per capita sales or earnings, where the denominator in the per capita calculation is full-time equivalent regular employees. Thus, the manager is given an incentive to cut regular employees and replace them with outsourced labor, even if the outsourced labor is (not too much) more expensive. leia todo o artigo