downsizing
The U.S. economy was at the height of economic expansion, stocks were near all time highs, corporate profits were strong, and the unemployment rate was at its lowest in two decades. At the same time, the major corporations in the United States were firing workers by the hundreds of thousands, and job insecurity had risen to an extremely high level. What was also ironic was the fact that the corporations who were initiating the downsizings were considered to be some of the strongest and most profitable in the country. Although these events seem to be inconsistent, this is what has happened throughout the decade of the 1990's. Traditionally, downsizing was a direct result of a decline in the demand for a firm's product and a tool for company survival. The first duty of an organization is to survive. Downsizing is a legitimate tool for survival but not necessarily the best choice for every circumstance. This would mean that fewer items needed to be produced, therefore less employees were needed. Downsizing was also used as a way to cut costs during times of recession. But, the downsizings observed in the 1990's did not fit this mold. Instead of downsizing for survival, companies were using this as
In conclusion, the decade of the 1990's has proven to be one of inconsistent events regarding various company's efforts to downsize. Given a standard statistical and/or micro-economic scenario, a weak firm anticipates a slump in the demand for its products, and lays off workers, while a strong firm foresees a jump in the demand for its products, and hires more workers. However, as in this case regarding Delta and United Airlines, the need for companies to downsize has taken on somewhat of a different purpose. The aim of this study was to prove our assumption that the factor of downsizing has some effect on the stock prices of a company, which we considerd as a medium to measure the efficiency of a company in terms of the company's financial position when downsizing occurs. The authors were able to conclude that downsizing does change the stock prices to some extent in certain cases and in other cases to a large extent. Even though this test involved only two companies- Delta and United Airlines- we have sufficient evidence to affirmatively draw the conclusion that, yes, when used as a medium to determine a company's efficiency, the company's decision to downsize does have a positive effect on its stock pr
Some common words found in the essay are:
Corporate Downsizing, United Airlines, United Airlines-, stock prices, stock price, increase stock, Delta United, corporate downsizing, effect stock prices, effect stock, downsizing survival, delta united, decade 1990's, trying increase, demand products,
Approximate Word count = 816
Approximate Pages = 3 (250 words per page double spaced)
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