American Sociological Association

Through the Contested Terrain: Implementation of Downsizing Announcements by Large U.S. Firms, 1984 to 2005

Since the 1980s, leading U.S. firms have announced massive downsizing plans in the name of maximizing shareholder value, but some observers are skeptical about how serious firms are in implementing these plans. Building on political theories of corporate governance, I examine how conflicts of interest and alignment among investors, workers, and top managers affect the implementation of announced downsizing plans. Using a sample of 656 companies between 1984 and 2005, I demonstrate the contrasting influences of these three stakeholder groups on two different implementation outcomes—total and managerial downsizing. The influence of investors who pursue profit maximization facilitates both, whereas the influence of workers who seek job security impedes the former but facilitates the latter. The power of top managers who attempt to retain managerial autonomy impedes managerial downsizing, but governance mechanisms that align their interests with investor interests facilitate total downsizing. By teasing out the influences of competing interest groups, this article contributes to a political theory of organizational policy implementation. By unpacking the implementation of downsizing and its potentially unequal effects on different groups of workers, this article also contributes to the economic sociology of downsizing and the broader stratification literature on economic inequality and job insecurity.


Jung, J.





Starting Page


Ending Page


Get Involved


ASA needs you to serve the discipline

Join a Section

Explore ASA's community of specialists in the discipline

Join ASA

Join or renew your membership