The experience of managers responsible for retrenchment : the development of a dynamic process model and analysis of role stress

Doctoral Thesis


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University of Cape Town

Retrenchment is a widespread and frequently used strategy adopted by management to deal with the economic demands faced by organisations. The lack of a theoretical framework, however, has limited the understanding of the phenomenon. The impact of retrenchment on managers and their role in implementation has been particularly neglected, despite the fact that they are central to this process. The present study addressed the development of a dynamic retrenchment process model which could address these limitations. Development of the model was based on qualitative analysis of interview data from a sample of 50 managers involved in retrenchment announcements, in combination with other concepts and findings relating to the phenomenon, and elements of role theory. The model reflected a five phase retrenchment process-moving through decision making, design and planning, the announcement, a post-announcement phase, and concluding with an aftermath phase. The nature of the model components and the relationship between them was then examined in more depth using both qualitative and quantitative techniques. To facilitate the analysis of role dynamics, a multi-dimensional role conflict measure was developed and applied. Qualitative analysis showed indications of all types of role conflict and of role ambiguity during the retrenchment, but these manifested themselves differently during the various phases of retrenchment. Quantitative analysis demonstrated moderate relationships between person-role conflict and role ambiguity, and organisational commitment. Person-role conflict, interrole conflict and role ambiguity were also all related to a measure of mental health. Role ambiguity was the only variable displaying a significant relationship with job involvement. Qualitative analysis suggested moderating effects of personality, coping, and social support during the retrenchment process. Qualitative analysis also displayed support for the existence of adverse physiological, psychological, affective and performance outcomes resulting from involvement in the retrenchment process. The present study emphasises the importance of viewing organisational phenomena in the context of a process which changes over time. Each phase of retrenchment generates its own dynamics and demands and needs to be understood within that context. While general measures at the end of such a process give an indication of what has happened, they lack the ability to diagnose and explain perceptions and behaviour that drive the phenomenon. Also, the present study demonstrates the usefulness of specific types of role conflict in analysing the reactions of managers. Further, the study highlights the role of the psychological contract in regulating relationships and behaviour within the organisation. Both the strength of the relationship between manager and employee, as well as that between manager and organisation are demonstrated in the research. Given that retrenchment is likely to continue, the need for organisations to address specific issues within the retrenchment process is emphasised, and steps that can be taken to enhance the prospects of retrenchment assisting in organisational renewal are discussed.

Bibliography: leaves 317-338.