Alternative to Downsizing

Downsizing interferes with the network of informal relationships which innovators use to gain support for new product development. Innovative activities no longer connect with the rest of the firm. 3M has an alternative to downsizing that is reallocation. If jobs have to go, it does not mean that employees have to go as well. 3M’s policy, for example, is to find similar jobs for excess workers in other divisions. During the 1990s it reassigned 3,500 workers in this way rather than make them redundant. It is able to do this because it is constantly creating new products and new divisions to which these people can be relocated.