THE ROLE OF MUTUAL TRUST IN EFFECTIVE DOWNSIZING STRATEGIES

Several factors that explain differences in the downsizing strategies utilized in organizations are examined in this study of 91 organizatio ns in the automotive industry. Specifically, mutual trust within a top management team is positively associated with a strategy based on org anization redesign. Mutual trust between members of an organization an d its key customers and suppliers is positively associated with a stra tegy based on systemic change. Moreover, these two strategies are posi tively associated with performance outcomes in the areas of cost reduc tion and quality improvement. (C) 1994 by John Wiley & Sons, Inc.