The Impact of Downsizing on Survivors: From Organizational Commitment and Job Insecurity Point of View (The Case of Ethio Telecom, Addis Ababa)

Abstract

Given the face of globalization, most organizations involved in the implementation of downsizing as one of the management strategies. However, the way being exercised has a profound impact on survivors from layoff and on objective of downsizing. The objective of this study is to determine how the perceptions of downsizing in relation to procedural and distributive justice affect the level of organizational commitment and job insecurity of survivors. To achieve the objective of the study data were collected from employees of Ethio Telecom, who survive from downsizing, using questionnaire and unstructured interview. A total of 252 survivors from two zones were included using simple random sampling technique. Both descriptive and binary logistic regression methods were employed as a tool for the empirical analysis using statistical package for social sciences (SPSS 16.0). The study reveals that perception of organizational injustice in both procedural and distributive justices have an impact on survivor’s commitment and feeling job insecurity. Procedural justice has found a strong predictor for the outcome variables. While distributive justice has become the second predictor that has an influence on components of organizational commitment. However, this study did not found any relationship between distributive justice and feeling of job insecurity with p-value of 0.532. In general, this study concludes that perception of survivors towards downsizing implementation affects level of commitment and job security. Based on these, it is recommended that Ethio Telecom better to practice an organizational justice while making decisions and also advisable to adopt the involvement of employees in the process to get a positive work related behavioral outcomes.