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2 - Corporate restructuring and the employment relationship

Published online by Cambridge University Press:  02 December 2009

By
John C. Dencker
Edited by
Peter Cappelli
John C. Dencker
Affiliation:
Assistant Professor, Institute of Labor and Industrial Relations, University of Illinois, Urbana-Champaign
Peter Cappelli
Affiliation:
University of Pennsylvania
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Summary

Introduction

Widespread corporate restructuring has transformed employment relationships in numerous lasting ways in recent decades, as the process of corporate reduction in force (RIF) ended the careers of many employees and corporate reorganization changed the way managers are evaluated and rewarded (see Cappelli et al., 1997). Scholarly interest in understanding this transformation process has led to the creation of a wealth of knowledge on employment change from a number of academic disciplines. Economists have analyzed changes in tenure with a firm along age, sex, occupation, and industry lines, showing that – in stark contrast to previous temporary layoffs, which tended to be limited to blue-collar employees – terminations during RIF are now permanent and disproportionately affect previously protected groups such as middle-aged managers in manufacturing firms (Baumol, Blinder, and Wolff, 2003). Psychologists have studied the negative effects of restructuring on employees who remain in restructured firms, demonstrating that survivors of RIF often responded with reduced morale and work effort (Brockner et al., 1992). Further, sociologists have examined broad patterns of career mobility, finding that restructuring spurred the movement of employees across organizations and industries (DiPrete, 1993).

Despite the clear effects of restructuring on the employment relationship, our understanding of the upward career mobility patterns of managers in restructured firms is surprisingly limited.

Type
Chapter
Information
Employment Relationships
New Models of White-Collar Work
 , pp. 31 - 64
Publisher: Cambridge University Press
Print publication year: 2008

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