An evaluation of the impact of downsizing on organisational performance at MBCA Bank Private Limited from July 2009 to December 2011

Abstract

The purpose of this study was to evaluate the impact of downsizing on organisational performance focusing on MBCA bank covering the period July 2009 to December 2011. The banking industry witnessed operational challenges during the period 2007 to 2009, resulting in banks experiencing huge losses. Majority of banks adopted downsizing strategies in an attempt to remain operational and profitable. The study examined the rationale of downsizing, the process of downsizing and the impact it had on the organisational performance.

A study using a qualitative approach was applied, on a sample of sixty MBCA employees. The sample size was determined using Verneulem (1998)’s guide and the sample frame was a list of all MBCA bank employees. The sample was made up of employees from the bank’s eight departments. The findings of the study were that downsizing had a positive impact on the financial aspects of the organisational performance and a negative impact on the human resources aspects, such as staff morale, trust on the organisation and job security. The researcher recommended that the bank should conclude the downsizing exercise and implement employee motivation programmes as well as spell out the organisation’s future direction. The researcher suggested that further studies be carried out on how downsizing impact on those who implement the downsizing process.