Effects of Downsizing Strategies on Survivors’ Organizational Commitment: The Case of Ethio Telecom

Abstract

The study sought to analyze the effects of downsizing strategies on survivors’ organizational commitment (affective, continuous, and normative) at Ethio Telecom. This study used descriptive and causal effect type of study. It focused on both qualitative and quantitative approaches for collection and analysis of data. This research made use of both primary and secondary sources of data. The researcher employed simple random sampling technique to select 362respondents from each zone and headquarter offices. In this study, Structural Equation Modeling (SEM) was employed. As the findings depict that positive and significant effect of exogenous variables (organizational justice: procedural and distributive justice) with the standardized estimate for procedural justice on affective, continuous, and normative commitment effects were all significant but they are not that much strong (ß =0.22, 0.18, 0.17) while distributive justice had high effect on affective, continuous, and normative commitment0.97, 0.99, 0.98 and respectively. Based on the above findings the researcher inferred that there was organizational procedural injustice in the time of downsizing at Ethio Telecom. Consequently, these perceptions affected adversely survivors’ organizational commitment. As a result, survivors are neither emotionally attached nor have feeling of continuous commitment to the company. Hence, the researcher recommends that the strategists should do the following in order to make it effective: plan the process properly, study the overall scenario prior to the attempt, do human resource planning industriously, set clear selection criteria, make the process transparent, communicate timely, conduct behavioral trainings, align each unit activity with company’s strategic objectives, and prepare victims for other jobs.