The influences of the downsizing strategy on business structures

Carmen Soria Bravo, Alfonso Herrero de Egaña Espinosa de los Monteros

Abstract


Purpose – This paper investigates the effectiveness of the downsizing
strategy when applied to the Telefónica case.


Design/methodology/approach – By using the Event Study method,
we present the relationship between downsizing strategies and results.
Statistical significance of results was analyzed using t-statistics analysis.


Findings – Results are significant, proving that the downsizing strategy
brought about greater profitability and better funding, leveraging
company market values.


Originality/value – Results indicate that downsizing is a strategy
alternative that allows for better adaptation, if carried out proactively
and associated to changes that are necessary within organizational
structure and processes.


Keywords


Downsizing. event study. strategy. Telefónica.



DOI: https://doi.org/10.7819/rbgn.v19i63.1905

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