Date of Award

5-2012

Document Type

Thesis

Degree Name

Master of Arts (MA)

College/School

College of Humanities and Social Sciences

Department/Program

Psychology

Thesis Sponsor/Dissertation Chair/Project Chair

Jennifer Bragger

Committee Member

Kenneth Sumner

Committee Member

Gene Kutcher

Abstract

Downsizing has become a prominent part of the business landscape and is reshaping the way people work and deal with their organizations. The present study investigated how the context and process behind a downsizing decision can influence people’s perceptions of the organization. Using a policy capturing methodology, subjects read 67 scenarios about downsizing organizations and were asked to rate the fairness of the organization and indicate if an ethical violation had occurred. The cues manipulated included the size of the organization, whether the company is currently losing money, whether the company tried other options before considering downsizing, whether the layoffs were performance based or if they were laying off the highest earners, whether the victims were given notice and an explanation by management, and whether the company provided career outsourcing. Analysis of results found that a majority of subjects utilized the cues of whether the downsizing decision was performance-based, whether ample notice was given by management, and whether the organization provided career assistance, in determining whether the scenario was fair and whether an ethical violation had occurred. A minority of subjects used the cues of organizational size, whether the organization was losing money when they made the decision to downsize, and whether the organization tried other options before making the decision to downsize, in determining perceptions of fairness and whether an ethical violation occurred. Between group analyses of demographic variables were not significant indicating that gender, ethnicity, and work experience did not influence which cues individuals used to make decisions about whether the scenario was fair or whether an ethical violation occurred. The study found that variables influencing how an organization conducts downsizing contributes to whether downsizing is perceived as fair and ethical. Limitations and future directions are discussed.

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