Thesis title: Digital Advantage: Assessing the Impact of Downsizing on Firm Performance
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2024-06-10
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en
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This master thesis studies the impact of the magnitude of employee downsizing and digitalisation on firm performance, all while utilising the Resource-Based View as a theoretical framework. This study employs a quantitative approach, with Return on Assets as a key financial performance metric, and explores how varying levels of digitalisation within firms influence the financial outcomes of downsizing. By conducting a textual analysis of annual reports to measure the level of digitalisation, this research contributes to a more nuanced understanding of how digital investments can moderate the effects of workforce reductions. The findings suggest that firms with higher levels of digitalisation experience better financial performances post-downsizing compared to those with lower levels of digitalisation. Evidence that the magnitude of employee downsizing or the level of digitalisation significantly impacted the Return on Assets was not found. This study showed managers, or policymakers, that firms with a higher level of digitalisation are better equipped to handle the challenges that come with organisational downsizing, such as the loss of valuable knowledge. Therefore, managers should explore how digital tools can help streamline operations, automate tasks, and enhance decision-making processes during downsizing initiatives. Lastly, further research is needed to improve this unique perspective of measuring the level of digitalisation.
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Faculteit der Managementwetenschappen