Organizational Downsizing for Tourism Businesses

Introduction

In the mid-1970s the only and global solution produced by management theorists to problems related to competition and organization was to expand business. The ever-increasing demand has increased the efforts of companies to gain more market share, which has led to structural growth and expansion of its activities. In this period, especially large-scale companies have assumed a multi-level hierarchical and bureaucratic structure. With the rapid globalization that started in the 1980s, companies that have this kind of structure in international competition could not meet the changing and developing market expectations and needs in a timely manner. This situation has led to a decrease in competitiveness and restructuring of organizational structures (Tuz, 2001).

Organizational downsizing was one of the most remarkable developments of the 1980s. Between 1979 and 1989, 1 million managers and other professional staff left the organization within the scope of organizational downsizing. In terms of the total number of employees, 3.2 million people quit their jobs within the scope of organizational downsizing (Karake, 1999). Until the 1980s, the common view of the size of organizations was that large organizations were more advantageous. For this reason, companies have tried to expand their working areas, number of employees, production capacities and working universe by looking for ways to grow at every opportunity. Since this situation is perceived as an indicator for the success of managers, managers have focused on enlargement-oriented strategies. Cameron (1994) summarizes the dominant view of this period as follows:

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  Big organization is better.

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  Organization needs to enlarge constantly.

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  The characteristics of effective organizations are commitment and compliance.

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  Organizational flexibility is measured by the ability to use resources.

In the post-1980 period, the general perception about the size of organizations began to change gradually. Now, small-scale organizations, like large organizations, are valued, slow growth or the decision of the organization to shrink in accordance with its own situation is considered normal and the organization's flexibility and compliance began to be dealt with the concept of downsizing (Cameron, 1994).

Day by day, the business world has to adapt to the changing world and act fast. Sometimes businesses merge with other businesses, acquire other businesses, privatize the public institutions, and restructure using various methods to reduce costs. One of these restructuring methods is downsizing. Many businesses that try to survive, especially in times of crisis, need organizational downsizing strategies. Organizational downsizing may lead to another downsizing and may turn into a repetitive process. For example, between 1982 and 1992, Kodak went to organizational downsizing four times, with Honeywell opting for downsizing twice in four years (Applebaum, Everard & Hung, 1998).

Tourism is a sensitive sector due to the nature of the sector and sometimes there may be problematic periods. Businesses can achieve positive results in these periods with downsizing strategies. For example, in 2016 in the tourism sector in Turkey there was a problematic period, there were layoffs from hotels, merging departments implemented their strategy. As a result, easing the control and elimination of the ineffective personnel emerged as positive outputs (Adıguzel & Tuna, 2018).