Delayering and downsizing
Delayering
Delayering involves removing a layer of management
Within hierarchical structures a method that can be used to reduce costs is to remove a layer of management, while expecting staff to produce the same level of output. This can:
- save the company money on managerial wages
- make the business more responsive to change due to the reduction of layers of management
Downsizing
Downsizing is when a firm closes down or merges aspects of their operations in order to:
- reduce costs
- remain competitive in the marketplace