The effectiveness of Job Redundancy as a strategic option and its right implementation

Abstract

During the last few decades, there has been a significant rise in job redundancy around the world. MNEs have been applying redundancy as a cost-cutting and rejuvenating strategy besides using it for surviving and retaining their business during tough times. However, the practice has evidently failed to result in expected outcomes in many countries including Australia, the UK and in the USA. This study has examined the link between redundancy as a cost-cutting strategy, and its effectiveness as a cost-reduction, rejuvenation and business retention strategy of MNEs. In order to do so, the researcher has critically analysed the related literature, and then critically evaluated the practice from various business contexts. Notably, contrary to the beliefs and practices of MNEs, the research reveals that redundancy is not such an effective long-term strategy for a firm’s survival and business retention, as it is thought. At the same time, the researcher has developed a model called ‘Best Fit Redundancy Model’ that can help MNEs to apply the strategy more effectively and responsibly, if redundancy is the only and ultimate strategic option for them.