Organisational Restructuring and Downsizing: Issues Related to Learning, Training and Employability of Survivors

Ronan Carbery and Dr. Thomas N. Garavan Programme for University Industry Interface (PUII)

University of Limerick Limerick, Ireland

Introduction

Corporate restructuring and downsizing represent some of the most problematic issues facing organisations and their employees (Black and Edwards, 2000). Corporate restructuring is a broad concept, however it is defined by Hoskisson and Turk (1990) as “a major change in the composition of a firm’s assets combined with a major change in its corporate strategy”. Heugens and Schenk (2004) highlight three distinct types of corporate restructuring: portfolio, financial and organisational restructuring. We are primarily concerned in this paper with organisational restructuring. This dimension is defined as significant changes in the structural properties of the organisation. Many reasons are put forward to justify an organisational restructuring. Bowman and Singh (1993) suggest that managers usually stress the importance of increasing the organisation’s efficiency or effectiveness. Prechel (1994) points out that it often occurs as a by-product of portfolio and/or financial restructuring. It is likely that significant changes in the strategic and financial capital structure of an organisation will require corresponding changes in the organisation’s authority and decision-making hierarchies. Downsizing represents a particular category of corporate restructuring. Budros (1999) defines downsizing as “an organisation’s conscious use of permanent personnel reductions in an attempt to improve its efficiency and/or effectiveness”. Downsizing is generally distinguished from other non-intentional forms of organisational size reductions. It is considered a deliberate strategy designed to reduce the size of the workforce. The most common strategy used is the laying off of workers but it may also involve hiring freezes and early retirement programmes. Downsizing is often used proactively to enhance competitiveness and the research evidence points out that it typically occurs after large investments in labour saving technologies have been made by the business. Though originally implemented for problematic organisations, downsizing is increasingly used as a strategy to ensure a leaner business (Fisher and White, 2000). De Vries and Balazs (1997) argue that downsizing has become one of the inevitable outcomes of living in a global economy where organisations are required to make continual adjustments in strategies, products, services and the cost of labour in order to remain competitive. Downsizing therefore has regenerative purposes, however the evidence to date suggests that this may not always be the case. A significant proportion of the literature has tended to focus on the detrimental effects of downsizing. A great deal of research effort has focused on ‘survivor syndrome’ (Gowing et al., 1998, Johansen and Swigart, 1994). This research reveals that survivors exhibit a plethora of problems including demotivation, insecurity and a decline in organisational commitment. These studies have primarily used survey methods to investigate the outcomes of downsizing. An area that is less frequently investigated concerns the extent to which surviving employees adjust to meet the dynamics of the organisation and develop new skills and competencies and take on new roles in the organisation. It is hoped that those who remain are the ‘cream of the crop’. They are considered crucial to organisational success.

Armstrong-Strassen (1998) acknowledged that the reactions of the remaining employees will largely determine the effectiveness and quality of service provided by the organisation, however her study found that managers reported a significant decrease in job performance and commitment to organisational goals following the downsizing. Those who remain are challenged by the breaking of the implicit psychological contract (Rousseau and Wade-Benzoni, 1995). We focus in this paper on understanding how survivors coped with an organisational transition from a traditional manufacturer to a high value manufacturer. We gathered accounts from managers, which focused on exploring the skills and competencies that survivors had to develop, and the attitudes they had to embrace in respect of learning and development. We also explored issues concerning the employability of professional employees and their motivation to learning and willingness to participate in learning that was more tacit and non-formal in nature.

The Theoretical Context A number of dimensions of the theoretical context are relevant to the focus of our study: the rational for innovative organisational structural and strategic change, the management of change processes, employee motivation to participate in training and employability. Structural Change High technology-driven companies are continually focused on the need to design complex structural configurations that will enable them to perform effectively in hyper-competitive environments (Black and Edwards, 2000). A consistent theme in the contemporary literature concerns the capacity of respond quickly to environmental pressures. It is generally recognised that this capacity to change is a major predictor of business success (Pettigrew and Massini, 2000). It is also well established that the capacity to change is not necessarily attributed to technical optimisation but more appropriately the ability of the organisation to utilise its human resources through structural transformations (Whittington and Mayer, 1999). The high performance work organisation research reveals that high technology ventures increasingly adopt a range of innovative human resource practices. These have been labelled by, amongst others, Pettigrew and Massini (2000) as process innovation, Ichniowski et al. (1996) as workplace innovations and Bacon et al. (1996) as the new management model. Pettigrew and Massini (2000) argue that the intensification of changes to economic, technological, informational and political factors are forcing organisations to consider new ways of organising and responding to the competitive dynamics of the external environment. Hanssen-Baurer and Snow (1996) suggest that increasing globalisation is a key factor explaining why organisations copy the successful practices in order to generate superior performance. The evidence concerning the success of these innovations is less comprehensive. Relatively few studies have directly linked these innovative work organisations to business success. Ichniowski et al. (1996) reported that steel mills which adopted innovative work practices combined with appropriate training, development and skill enhancement strategies achieved better results than organisations that adopted more traditional systems.

The Management of Change In terms of the nature of change processes, large organisations have traditionally been seen as dominated by highly pluralist and incremental forms of decision making, taking into account the cognitive and political constraints on perfect choice (Alford, 1975, Hickson et al., 1985, Ashburner et al., 1996). The managerial function was perceived as ‘muddling through with a purpose’ and achieving a succession of minor ‘first order’ changes (Levy, 1986). The majority of the research on organisational change viewed change as taking place incrementally, on the basis of consensus, collaboration and participation (Quinn, 1980) where the change process was essentially ‘owned’ by the employees. Critics of the incremental change model argued that it lacked a contextual element, and had difficulty in explaining the prevalence of ‘coercive reorganisations’ apparent in the 1980s, which were often at the behest of newly appointed chief executives (Dunphy and Stace, 1990). This gave rise to a transformatory perspective on organisational change (Levy, 1986). Dunphy and Stace (1990) classify strategies for change into four types along two dimensions, namely incrementalism versus transformation and collaboration versus coercion. The first dimension refers to whether the change is implemented in small, continuous steps or in a large, discontinuous manner. The second dimension refers to whether employees are invited to participate in planning and implementing the change. This involves alteration of the system’s (technology, core skills of employees, etc.) basic governing rules. It shifts the system as a whole irrevocably to a new paradigm (Levy, 1986). Hinings and Greenwood (1989) developed a typology of organisational change where they termed transformational change as a situation where prevailing ideas lose legitimacy and an alternative interpretive knowledge framework emerges, giving rise to a new structure. Other associated features of transformational change include a reformed mission and core values, an altered distribution of power, and reorganisation to support new roles and break the traditional business structure (Kleiner and Corrigan, 1989). Other researchers have attempted to combine the transformational and incremental perspective such as the ‘punctuated equilibrium model of organisational transformation’ (Miller and Friesen, 1984, Tushman and Romanelli, 1985, Gersick, 1991) in that their approach to change incorporates elements of both the incremental and transition models. This model of organisational change, which growing in prominence and pervasiveness, posits that while most organisations appear to fit the incrementalist model of change for a period of time, there comes a point when they undergo a period of rapid and fundamental change. The organisation evolves through relatively long periods of stability which are punctuated by short burst of revolutionary periods which subsequently establish the basis for new equilibrium periods (Romanelli and Tushman, 1994). Research on organisational change reveals that many change programmes are likely to face problems. The most common problems include human resistance (Kotter and Schlesinger, 1979) problems and conflicts between competing groups in a changing process (Starbuck, 1983), inertia determined by isomorphic forces from an organisation’s environment (Greenwood and Hinnings, 1996). There is also build-in inertia in individuals, structures and organisational systems that may derail a change process (Pettigrew, 1985). Fundamental organisational, and particularly structural change, is

likely to engender strong emotional responses, however employees are likely to differ in their reactions to change, some passively resisting it to others actively undermining the change (Barturck, 1984). Individual Learning and Motivation to Learn Huy (1999) argues that change processes pose three key challenges for individuals: receptivity, motivation and learning. At an individual level, receptivity is concerned with an individual’s willingness to consider change. Motivation refers to collaborative efforts and the capacity to implement the change. At an individual level it refers to the taking of concrete actions. The evidence indicates that the ability to motivate depends upon the existence of resources, support structures, systems and skills. Because individuals learn from their earlier experiences in an organisation, the individual’s learning experiences may impact his/her willingness to see the need for change and take action. Learning therefore involves both emotional and skill components. According to Dodgson (1993): “individuals are the primary learning entity in firms, and it is individuals which create organizational forms that enables learning in ways which facilitate organizational transformation”. Burgoyne and Stuart (1976) posit that learning should be broken down into three classes: basic data and information skills (facts relating to the specific working environment e.g. knowledge of production processes); situation-specific skills (skills associated with sensitivity to events e.g. analytical, problem-solving, leadership skills); and qualities for self-development (e.g. creativity, mental agility, learning habits, innovation). The degree of learner autonomy is also significant (Schon, 1983). This represents the freedom of choice that learners exercise over the content of what they want to learn and the process by which they wish to learn it, within the process implemented by the organisation (Mabley and Salaman, 1995). Learner autonomy can be depicted along a continuum where instrumental/closed learning processes (subject matter is predetermined and a specific body of knowledge is taught) are at one extreme. At the other extreme are experiential/open learning processes which are based on the view that knowledge evolves and training and development activities tend to much more informal and open-ended with tutors acting as facilitators to enable learners to achieve their own learning goals. Research has suggested that motivation to learn plays an important part in both availing of learning opportunities and transferring learning to the workplace (Noe et al., 1996, Carbery and Garavan, 2004). It is defined as the level of motivation that employees have to improve skills and enhance knowledge (Noe et al., 1996). Noe (1986) suggests that characteristics such as motivation and attitudes are malleable individual difference factors that play a central role in determining the effectiveness of learning. Low motivation may undermine learning outcomes even where the learners possess the ability to learn the concept. Colquitt et al. (2000) argued that the effects of motivational variables on learning are stronger than that of cognitive ability. Past research also indicates that environmental factors such as materials and equipment support influence employees’ training motivation. In addition to the environmental

factors, training contextual factors such as the reason for participation, the framing of the learning and organisational climate have also been shown to be relevant. The issue of whether learners voluntarily attend or are mandated to attend is an important issue. Baldwin et al. (1991) argue that the benefits of voluntary participation in training have been exaggerated. Learners are likely to complain that those who volunteer for learning are those who need it least. Baldwin et al. (1991) further revealed that learners who were mandated to attend particular training programmes were more motivated than those who volunteered. This they suggest is because when supervisors feel a particular learning activity to be central to the achievement of organisational objectives, they usually assign employees to participate in it. Mathieu and Martineau (1991) have concluded that voluntary participation is a double-edged sword. They should focus on what trainees think about the learning. The learners’ perceived importance of a learning intervention is likely to influence learners’ motivation to attend. If learners believe that the training programme is beneficial and important, then learner motivation will increase. Noe and Wilk (1993) showed that the more benefits that learners felt they could obtain from participation in training activities, the higher their rates of participation in such activities. Cohen (1990) found that learners’ training motivation would be enhanced if they felt that the learning was beneficial or necessary. Clarke et al. (1993) found that job and career utility had significant influence on learners’ training motivation. Thus learning interventions that are job or career related will influence learners’ training motivation. The influence of a learning intervention (mandatory or voluntary) on learners’ motivation will depend on the perceived message of the learning intervention. Where the learner is likely to perceive that the lack of choice is manipulative, learners will likely have significantly less motivation to learn. On the other hand, where the mandated programmes of learning is perceived as a commitment by the organisation to focus on new skills, enhance employability and/or move in a different direction, learners will likely be highly motivated to learn. Therefore it is arguable that a learning process which is part of a wider organisational change initiative can be perceived as part of a management commitment towards skills and performance improvement. The perceived importance of the learning intervention is therefore important in the context of a major change initiative. Enhancing Employability The paradigm of lifetime employment is being largely replaced by a paradigm of lifetime employability. Employability is generally considered at the individual level of analysis and refers to an employee’s capacity and willingness to remain attractive in the labour market. Thijssen (1997) distinguishes three types of employability. According to a core definition employability encompasses all individual possibilities to be successful in a wide range of jobs. Within this definition employability refers to an employee’s capabilities. A broader definition of employability considers both the capacity and the willingness to be successful in a diversity of jobs. This definition considers all characteristics of the individual that are relevant to current and future positions. The third perspective, an all-embracing notion of employability focuses the context bound factors that facilitate or hinder an employee’s employability such as the amount of

training opportunities provided by a firm. The all-embracing perspective considers individual and contextual conditions that determine employability. Research has focused on factors that influence employability. Groot and van den Brink (2000) distinguish between internal and external employability. External employability refers to the ability and willingness of an employee to switch to a similar or different job in another firm. This dimension reflects the employee’s value in the external labour market. Internal employability refers to an employee’s ability to remain employed with the current employer. This individual may be employed in the same or a different job. Sanders and de Grip (2004) make a distinction between job match employability which refers to employees who remain in a current job, firm internal employability which refers to employees who switch to another job, and external employability which involves switching to another firm. Baruch (2001) argues that employability can be beneficial in several ways. It depends on the ability of employers to acquire competencies that are valued in the labour market. The occupational group to which the employee belongs as well as the industrial sector and geographical location appear to be important. Training and development is also an important issue. Particular characteristics of the training are important in this context, specifically whether it is short or long term, general or company-specific, voluntary or mandatory. Individuals can also gain employability through participation in special projects and employment with a reputable company. A prerequisite for creating employability is the creation of mutual dialogue between the individual and the organisation to foster an environment of collaborative effort and shared learning (Bagshaw, 1997). Individuals need to have high level of self-understanding, be able to clearly articulate their vision and values and recognise joint responsibility in terms of the ‘new’ nature of the psychological contract.

Method Organisational Setting A major global computer-manufacturing organisation was chosen for this study. This organisation is an established world leader in the computer industry, providing hardware, software, and a range of computing solutions for business, home and educational customers. Its reputation for ease of use in its high quality products and services has earned it increasing market share. The study was carried out in a subsidiary of the parent multinational in Ireland. The headquarters of the multinational is based in the US. The local subsidiary was originally established manufacture primarily for the European market. Between 1978 and 1985 demand for products and services increased exponentially leading to a doubling of capacity in 1983. In the second half of the 1980s demand for these products collapsed due to the competitive marketplace, resulting in pressure to rationalise production. The subsequent ten years saw the organisation pare back its global manufacturing base, and much of the business was brought to its highly cost effective local subsidiary. In 1997 alone one quarter of the organisation’s worldwide

workforce were let go. Paradoxically the local base continued to add to its workforce during this period and extended its mandate to global manufacturing. In the latter stages of the decade, as the pared down multinational began to recover market position, it appeared that the local plant had managed to dispel the need for cutbacks in the workforce. However, the unprecedented growth of the national economy began to affect the competitiveness of the local base and management realised that their sole competitive advantage in terms of labour cost was being eroded and that it would be increasingly hard to justify their manufacturing mandate in an expensive location. Eastern European countries emerged as attractive low cost manufacturing bases and began to attract a greater share of mobile investment (Carolan and Griffin, 2004). The Change Intervention In 1996, management team in the local base of the multinational decided that their future in Ireland would not be in traditional manufacturing. According to their Senior Director of European Operations, what was termed “brawn” (traditional low value) manufacturing would become impractical, and survival would depend on restructuring the operation to incorporate more “brain” (high value) activities. The organisation already had a strong history of reviewing its infrastructure and had effective technical resources allied with a workforce dedicated to the organisational philosophy of ‘making and meeting commitments’. The company conducted a strategic assessment in 1998 in which it identified its human resources as the most significant asset. The company also recognised that: • There was a high premium placed on high value-added activities within the

organisation. • The Far East and Eastern Europe were becoming more prominent competitors in

terms of scale and cost-effectiveness. • Advances in technology enabled the geographic independence of corporate

activities which could now be managed as effectively in Ireland as anywhere else. (IDA, 2004) The management team decided to outsource 30% of its manufacturing to contractors in the Czech Republic, while maintaining control over their manufacturing remit. The realisation by management that the future of the plant did not lie in manufacturing meant that they sought new activities to justify their existence. A major restructuring took place which initially resulted in a reduction in the work force from 1,500 employees to 450 employees. The organisation underwent many changes including: in April 1999 they re-engineered manufacturing processes to 100% high value manufacturing and outsourced the existing low value manufacturing processes to the Far East and Eastern Europe; commissioned SAP across Europe in 2000; they opened a European Call/Technical Centre with customer support, on-line sales, customer relations and back office capabilities in September 2000 which now employs 420 people

With the assistance of local agencies, the organisation developed a proposal to establish a customer service and support facility in the local plant. Against competition from other locations in Europe, the local plant succeeded. This transformational event gave management the confidence to undergo further outsourcing of manufacturing and pursue more value added activities. The parent multinational had never utilized a telesales function so management of the local plant piloted a program which was so successful that it led to a European Telesales function being centralised in the organisation in January 2001, employing 70 people and worth $400m to the business. The organisations Data Centre was also relocated from Holland to the local plant in February 2002. The new ‘global environment’ had implications for the culture of the organisation. Individuals were now expected to deal with customers and suppliers, and work in a virtual environment that centres around conference calls, email and travel. The focus was no longer on the physical line in the plant; skills and knowledge used in manufacturing are now being applied globally and across the entire supply chain. For example, at the customer interface in the organisation, the engineer had the process knowledge to map a problem with a product into the manufacturing process, resulting in a quicker solution to the problem. The customer service employee may not have the process skills to do this but may be stronger in the area of service. The result is the Process Skills department working directly with the Customer Skills department to provide the best service to the end customer. The organisational culture change involved an expectation of ‘round the clock’ commitment, with a knowledge of business process skills, engineering skills, with IT and supply management expertise. Management highlighted the need to think globally rather than locally, with the customer being the ultimate focus of all members of staff. The majority of what the organisation termed ‘professional’ employees made the transition to high value added manufacturing. To cope with the change, individuals had to think globally, which took time to bring about. The new operational focus required the individual to understand the organisation as a whole and, in particular, the area of Supply Chain Management (defined as ‘getting the product from raw material at the source to a transformed product to the customer’). Most operational staff (‘non-professionals’) failed to make the transition, with approximately 95% leaving the company. Management in the Irish subsidiary had considered diversifying into R&D but realised that they could not compete effectively with the US in this regard. The multinational’s Research and Development resources are mainly centred in the US and there is a tendency to keep R&D close to the corporate headquarters. The other focus was Customer Care and this did succeed. At present, there is low value-added activity in the call centres, and management recognise that it is likely to come under threat from counties such as India and particularly South Africa who are fiercely pursuing this sector. By March 2004, the organisation was responsible for Operations and Service in Europe, employed 1400 people with 85% engaged in value-added activities and the remaining 15% engaged in manufacturing, and had $6 billion in revenue in 2003. It is no longer

execution centric but customer centric. The operation is involved with all aspects of getting the product to the customer, including manufacturing, operation management, logistics and planning. The transformation presented many challenges and the organisation is continually learning lessons on how to survive in this area. According to their Senior Director of European Operations “It’s one thing to move up the value chain and another to stay up there”.

Data Collection In order to collect the data we conducted detailed interviews with a small sample of professional employees who had remained in the organisation throughout the period of restructuring. Those who volunteered to participate in this study did so with the understanding that all information provided would be kept confidential. For the most part, this was the participants’ first experience with restructuring and downsizing. Six key individuals participated in the study. The sample is a purposeful sample selected from individuals who were still in employment with the organisation eight years after the change process was initiated. Table 1 provides a summary of characteristics of each respondent. Table 1: Demographic, Human Capital and Tenure Characteristics of Study Participants

Participant Job Title Job Scope Gender Organisational Tenure

1. European Customer Service Manager

Responsible for the contact centre Male 17 years

2. Distribution Planning Manager

Responsible for order management and logistics

Male 19 years

3. Customer Quality Analyst

Responsible for monitoring quality levels

Female 15 years

4. Business Process Re-Engineer

Responsible for supply chain process design, costing and implementation with internal partners

Female 5 years

5. Refurbishment Program Manager

Responsible for internal sub-assembly Male 10.5 years

6. Distribution Manager

Responsible for logistics Male 10 years

Participants were asked to describe, in behavioural terms, positive and negative issues that they experienced during the period of downsizing. The interviews focused on three broad areas: a) perceptions of the factors that were central to the change initiative and the key drivers and external factors shaping the change; b) perceptions of the skills and

learning processes that were beneficial in making the transition; and c) the extent to which respondents perceived that their employability was enhanced as a result of the self directed learning processes. Table 2 summarises the key questions posed during the interviews. Table 2: Interview Questions Used in Study • What did you believe to be the central strategy behind the organisation’s decision

to undergo major restructuring in 1998/99? • What did you perceive to be the main drivers for change in the move to higher

‘value-added’ manufacturing? • Were there any conditions or situations in the external environment that impacted

on or influenced the change process? • What changes have you perceived occurred in the core values and operating

principles of the organisation since 1998? • What types of skills and personal qualities did you find most beneficial in coping

with the transition? • What training, development and learning activities, either formal of informal, did

the organisation utilise in order to facilitate the change process and make it easier for you?

• Did you have any choice or involvement in the content (e.g. principles, skills covered) in these training and development activities?

• How would you describe your attitude to training programmes in general? • To what extent do you take a responsibility for your own learning and development

(e.g. goal setting, continuous learning, teamworking, networking and preparing for future work change)?

• To what extent do/did you consider the training provided by the organisation to be sufficient to ‘get the job done’ or sufficient for self-development purposes?

• To what extent did you initiate any learning activities during the transition period? To what extent were they predetermined by the organisation?

The interviews were transcribed and all key statements and issues were then extracted. The issues and incidents were placed within three themes. We did not seek to organise the responses along a transitional time line framework namely moving into (beginning), moving through (middle) and moving on (ending). We discovered that the only real differentiation we could make was between issues that related to moving into and moving on. We utilised some of the techniques specified by discourse analysis to study the data. Discourse analysis is concerned with variability in individual manager accounts. We focused on a search for patterns in the data, specifically variability in content and consistency – the identification of features shared by accounts. We do not include the fine details for intonation and hesitation in responses as these interfered with the readability of the text. The researchers were actively involved in the data generation.

In order to analyse the data we produced a list of codes which reflected initial themes found in the interviews. We produced summaries of this coded material and arranged it according to the role and position of the respondent. We included a mixture of direct quotes and summaries. Participants reported both positive and negative issues in relation to each of the themes. This reflects the mixed and sometimes conflicting reactions that survivors have to a downsizing experience. This may have arisen because we interviewed participants approximately 6 years after the implementation of the change. It may also have arisen because the themes are largely undifferentiated in the early stages of a major change process.

Results Factors Influencing the Change Respondents provided us with detailed discourse concerning the factors that drove the major structural change. We asked respondents to explain their perceptions of the central strategy behind the change, the main drivers for change and the conditions in the external environment that impacted or influenced the change process. The Change Strategy The content of the key strategy was very consistent in terms of perception of the central strategy for change:

“The organisation’s core competency does not lie in manufacturing, it lies in design. By concentrating on what it did well and letting others concentrate on what they did well (i.e. manufacturing at a lower cost than the organisation could on its own) the organisation could better endure the competitive environment.”

Economic factors drove the organisation to outsource the majority of its manufacturing. The need to orient itself in a more strategically position was highlighted along with the realisation that their core competency lied in design (high value-added) rather than manufacturing. Respondents discoursed that the dominant strategy driving the structural change was the need to change focus, to move to high-end development rather than focus on manufacturing. The discourse focused on the notion that the organisation had a particular core competency which was high value added manufacturing. Managers were of the view that a shift in strategic focus was necessary for the organisation to sustain its competitiveness. The Main Drivers for Change Respondents discourse suggested a number of differing responses concerning the factors that drove the organisational restructuring. These factors were generally economic in nature. Respondents perceived the driver for change in the move to high value-added activities to be the strength of the management team in the local base in that they were able to react to the need for change in a timely, efficient manner. There was recognition

that, in order for the plant to remain a viable entity at corporate level, they needed to prove that the organisation could offer more than just manufacturing and be able to excel in the areas of Finance, Customer Service, etc. It was noted that because of the geographical nature of manufacturing in Ireland, it is no longer logical to bring components to Ireland to be assembled, given that the supply base for the worldwide electronics industry in concentrated in Asia. A move up the value chain into European Operations has allowed the plant to survive. The European Customer Services Manager discoursed the drivers this way:

“Firstly, the organisation was changing its strategy in relation to how it managed its European business. They began moving from the decentralised model to a more centralised. And in the case of the local subsidiary, there were already a lot of functions here that would compliment and enhance the business. Secondly, the availability of a facility at a relatively low cost in comparison to our already central location in Paris. Thirdly, management in the local subsidiary had the foresight to see that we could not survive alone on manufacturing.”

The non-competitive nature of manufacturing is also emphasised in the discourse of the Business Process Re-Engineer. She pointed out that:

“The cost of manufacturing in house was becoming prohibitive and competitive advantage was lessening. The organisation’s strength lay in the design of products but not manufacturing those products. Customer satisfaction became a bigger factor thereby leading the organisation to focus a lot more on customer care and customer service as the need to retain and build a loyal customer base in an increasing competitive market was and is continuing to grow.”

The discourse reveals considerable realism concerning the challenges that faced the organisation. The Role of the External Environment The discourse here focused on technological, political, competitive and market share issues. This discourse revealed the complexity of impact of the external environment on the organisation. For example:

“In relation to our Contact centre, the organisation had just recently decided to move to an insource model rather than outsource which it had done unsuccessfully for a number of years prior. Secondly, the contact Centre business in Ireland was growing rapidly and there had been a lot of investment by the Irish government in our IT infrastructure which made the decision a lot easier.”

The discourse reveals a high level of realism. They emphasised that competitive and market share issues were not favourable to the organisation. Investment by Irish government in IT infrastructure was highlighted as a crucial factor. Of more significance were the combined effects of the internet era and the competitive nature of the computer industry. The organisation was forced to look at their cost base which led to low value added manufacturing being outsourced. Many of their competitors had already done this. There was a perception in the marketplace that their products were perceived as an

expensive alternative to their competitors’ products which highlighted the need for the organisation to provide as much assistance to customers as possible in the areas of minimum product order time, internet support and after sales service. Managing the Transition Process Changes in Culture and Structural Control We asked participants to recall particular dimensions of the change process. Respondents’ discourse focused on changes in culture, structure, business functions and operating principles. Responses reveal very significant shifts during the transition in the culture. The Distribution Manager discoursed the change this way:

“The organisation has become a tighter managed ship. More influence on our day-to-day roles, goals and commitments. Commitments are sacrosanct. Strategy and direction filters through the organisation at a faster pace than before.”

The European Customer Services Manager focused more on the business model changes rather than on the cultural changes in his discourse:

“I think that it is now recognised that even though manufacturing is still part of the organisation, it’s not the bread and butter that keeps the facility alive. There are now a lot more organisations and business functions inside the facility, and this is constantly changing and growing. Also, the services business is now acknowledged as a business for the future and this has allowed us to transition old schools of thought from manufacturing to these new areas, with great success.”

Managers accounts emphasised that the company had moved away from traditional a traditional ‘IR’ mindset allowing individuals the scope to adjust their working hours by working from home, flexitime, etc. Significantly, the organisation appears to have been successful in gaining employees commitment to the move to a more customer focused operation. The organisation culture has become more customer focused as a result of their globalised approach and are increasingly metric driven, with the onus on departments to take responsibility for any shortages in the aforementioned metrics. In the move to a more virtual manufacturing company, strategy and direction filters through the operation at a faster pace than before. Skills and Personal Qualities Required During the Transition Participants emphasised the value of prior experience and specific skills when discoursing the transition process. The European Customer Services Manager focused in particular on prior learning and experience:

“I brought a lot of the production process knowledge with me to the Technical Support centre and this had major benefits. Also having been with the company for a number of years, my knowledge of who does what in the organisation helped to get thinks done. Prior to my transition I had felt very limited in what options were available to me but when the Contact Centre arrived it brought with it many

opportunities for my technical skill, analytical skills, processes knowledge and customer consciousness.”

The discourse reveals that management considered particular skills to be of value in making the transition. They included previously acquired technical skills (productions process knowledge, supply chain management); prior experience and endemic knowledge (of organisational processes and procedures; flexible mindset); and self-development skills. The ability to adapt and learn, show initiative, creativity and problem solving were considered most important. The ability to work effectively in a process-controlled environment (production) facilitated the shift to other areas within the organisation that were also similarly process driven. The necessity to get out of a ‘union orientated’ mindset of fixed working hours was highlighted as being significant in a 24 hour a day working environment. Learning, Training and Development Activities During the Transition Participants’ discourse is consistent in emphasising the lack of specific training initiatives provided by the organisation and the need for the self-management of learning. There was a reliance on individuals’ accumulated skills and experience to survive and develop. On the job training (‘look and learn’) and ‘sitting by Nellie’ approaches were most widespread. Individuals worked closely with people with years of experience and those who were identified as having the ability to transfer knowledge effectively. Respondents were of the opinion that this was an area of potential development for the organisation, especially for those moving from a production environment to an administrative one. The responses reveal the experiences of respondents:

“No specific trainings were given. Everything was based on my ability to learn, absorb and apply.”

The Refurbishment Program Manager’s account reveals that there was an element of the survival of the fittest. He said that:

“The organisation has always been very good at supporting those who wish to develop themselves, job specific training is rarely provided for indirects, those with the required skills adapted well, those who didn’t adapted less well.”

Participation in Decisions Concerning Learning and Development Participants’ accounts point to very little choice or involvement in respect of training and development activities. Typical accounts were, for example:

“Most was very informal and based on the current job at the time. Very little formal development and training was given.” “In terms of training and development, in general one picks ones own courses from those offered internally on internal training programmes and from external development opportunities. If one wishes to go into a particular area or develop a higher skillset for conducting ones present role then it is up to the individual.”

Managers’ accounts reveal that there was very little emphasis on formal training activities. The content of such activities was generally predetermined with individuals choosing from a range of courses offered internally or externally. Respondents indicated

that it was up to the individual to pursue training and development opportunities in the organisation. Learning and Employability Attitudes to Learning We explored, in the accounts of managers, the attitudes of respondents to learning and the value of learning during the transition to self-development and employability. The discourse of respondents on these issues is interesting because they reveal a particular view on training and development. The perception of training programmes offered by the organisation was that they were too theoretical and abstract in nature, focusing on the bare mechanics of a role. Hands on training and/or practical exposure were considered by all respondents to be best forms of training with a follow up classroom session afterwards for review if necessary. The European Customer Services Manager puts it this way:

“Some are very necessary to the management function and some are nice to have. But in general I found the greatest learning came from my colleagues who were already in the business for some years.”

Overall the discourse of managers clearly articulates the need for individuals to take responsibility for learning. The Refurbishment Program Manager perhaps expresses it best:

“Training is positive. Training needs to provide the bare mechanics of a role is provided however if one wishes to move to a better role or become more competent in their current one it is up to the individual to decide what they need and to then review what training/courses would be of benefit.”

Responsibility for Learning Managers provided some interesting accounts in respect of responsibility for learning. The pursuit of training and development opportunities was perceived to be the individual’s own responsibility. The need for individuals to take the initiative themselves was emphasised in all of the managers’ accounts. While performance management goals are predefined by the organisation, the onus for self-development is perceived to rest solely on the individual. The European Customer Services Manager accounted for this issue in the following way:

“Each year I have goals set for me in relation to performance management. My development is realistically my own responsibility even though we have recently attended a management training course over 6 days, but this was the first one run by the company in a very long time.”

“On a personal level I take 100% ownership for learning & development. I have spent six years at night school to learn & develop what I need to do my current job better and to help develop a knowledge & skill base which would be of benefit in obtaining the next job I consider interesting.”

Specific or General Learning The accounts provided by managers reveal that they were not always able to identify the value of learning to their future role and employability. The Distribution Planning Manager emphasised this:

“At higher levels in the organisation there tends to be support for development training beyond just getting the job done. It is more difficult (almost impossible) to get development training (beyond the job) for the lower levels in the organisation.”

The Customer Quality Analyst doubted the value of the learning from an employability point of view:

“From my experience to date, the training that the organisation provides is sufficient to ‘get the job’ done and any additional knowledge gained in my job has been sourced by myself.”

Managers’ accounts tended to question whether the organisation has a responsibility to provide training and learning activities that contribute to individual employability outside of the company. Self-development was perceived to be a by-product rather than a targeted goal. Overall these responses highlight that learning activities were specific to the job and the organisation. Self-development and employability issues had to be driven by the individual and, in the main, sourced externally to the organisation. Initiation of Learning Activities We solicited the accounts of managers concerning whether they had initiated learning activities to help cope with the transition process. The managers’ accounts reveal in some cases that they tended to rely on experience and were less likely to take part in specific formal learning events. The accounts are consistent in emphasising that any learning activities were predetermined by the organisation and dictated by the role being occupied. If further knowledge was required, it was up to the individual to initiate the learning need. Managers revealed that they pursued external training and development opportunities following the transition period including night courses and part-time college courses. Typical responses included the following:

“During the transition period there was very little formal training given. Most of the learning was informal as described above. However, while working in the organisation I had undertaken a certificate in Supervisory management a number of years before the transition. I find an ongoing benefit from this course especially in people management and team working.” “If I was unclear or required further knowledge on any aspect of my job, then I initiated the requirement for further training.”

The discourse of managers indicates that they did respond to situations where skill gaps were perceived to exist. They tended to focus on the short-term and the discourse was very much concerned with the job rather than the career.

Discussion The rationale for this study (in part) stemmed from the inattention in existing research to the skill and competency issues that arise from strategic and structural transformation and change, specifically from the perspective of managerial and professional employees. The exploration of these issues within the context of a multinational subsidiary reveals that managers were in many cases left to their own devices in terms of developing skills and competencies to be successful as survivors in the new organisational structure. The findings, while tentative highlight the virtue of exploring the experiences of managers using a more discursive approach. The study highlights a number of important findings in respect of learning processes and responsibilities for learning. The new realities that confront downsized employees in respect of learning and training and development opportunities need to be understood. The need for individuals to take responsibility for their own learning needs and initiate training and development needs is strongly emphasised. The perception of respondents was that firm-specific skills were provided to facilitate the transition and advanced generic transferable skills had to be sourced by the individual. This suggests that those who pursued these training and development opportunities recognised their skills gaps, accepted that change is future oriented and also wanted to ensure that they broaden their knowledge so that they will be employable elsewhere if needs be. The organisation could not be relied upon to provide opportunities for self-development unless actively pursued by the individual. Some of the most important skills that individuals utilised in making the transition were self-development skills. There was a requirement for individuals to engage in more macro-level, strategic thinking, display high levels of creativity, problem solving and innovation skills. Opportunities to develop self-development skills tend to be limited by organisational processes (Mabey and Salaman, 1995) due to the time engaging in basic data and information skills and situation-specific skills. There is a risk, however, in this approach to learning in that by making individuals responsible for their own learning, it may polarise the workforce into learners and non-learners. Keep (2000) suggests that, as most employer provided training is, in the main, job specific and aimed towards those in certain occupations, an inequitable distribution of wider training opportunities defeats the concept of both lifelong learning and employability, which in turns leaves those most in need of training and development with the least opportunities for broader, transferable learning activities. For the majority of workers, the workplace represents the sole location to develop and/or learn their vocational practice (Billet, 2004). Keep (1997) highlights that even though there are good reasons for policy makers to place greater emphasis on individuals’ responsibility for learning, structural and societal barriers are in existence for many learners. In a system where there are neither individual rights of access to training nor an obligation on employers to invest in training, the aforementioned emphasis on the learner could be expected to reinforce patterns of inequality in access.

The Matthias principle (“to those that hath shall be given”) has had a significant effect on lifelong learning (McCracken and Winterton, 2003). There is evidence that those who have previously been engaged in learning are significantly more likely to be current participants than those who have not previously been (McGiveney, 1999). Managers and related professionals tend to enjoy a higher level of participation in learning activities at work than their subordinates. Bradley et al. (2000) have argued that a skill polarisation is developing with those already skilled gaining more opportunities for training and development with fewer opportunities open to semi-skilled and unskilled workers. Learners tend to be younger individuals; in non-manual occupations; have stayed in full-time education longer; and have higher educational qualifications (Beinart and Smith, 1998). This suggests a widening gap between “haves” and “have-nots”. The accounts provided by managers reveal a transition process that was essentially disordered and flawed. However it is clear that positive outcomes emerged from the process as well as negatives. The downsizing transition process creates major personal challenges for professional employees. The evidence from the accounts generally portrays a situation where managers had a very clear view of what change was required. Manager accounts revealed few competing interpretations of the rationale, approach and outcomes of the change. We focussed in the study on role changes and demands for new learning. It is clear that there were some value shifts, in particular the need to think differently about learning. In a downsizing environment, employees often find that they need to evaluate current job and career options and take a more proactive approach to their career development and employability. Our study offers some interesting insights on the skill development and employability dimensions of the survivor in a downsized organisation. It reveals a situation where the individual was considered very much the driver of his/her development with little assistance from the organisation. The organisation tended to focus on the here and now and provide learning opportunities that were specific and job-related. This type of learning has limited value in enhancing the employability of the employee. In implementing the study findings one must be aware of its limitations. The study is limited in scope because there were relatively few participants. A more extensive study would involve a larger number of participants. The study provided a retrospective view of the downsizing experience. It would have been much more interesting to complete multiple interviews at different time periods. Of particular interest would be to examine how perspectives change during the period of downsizing. Our study has a number of significant limitations. In particular, the sample size is limited. This makes generalisabilty of the findings difficult. In addition the study was carried out in a particular context. Wee would have benefited from access to more archival organisational material. Discourse analytic designs allow for an in-depth examination of managers’ personal experiences of change, however, it would be useful to have data from a wider range of organisational contexts. Assessing the long-term impact of downsizing for skill and employability issues requires further research with a focus on the new dynamics of the changed organisation and the

extent to which employees are required to invest in skills and develop generic competencies. Another issue that merits further study is the experiences of those who directed the downsizing process.

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