DISEMPOWERING AND DOWNSIZING MIDDLE MANAGEMENT?

At the turn of the decade the tendency of retrenchment in organisations appeared as a byproduct of an ongoing recession threatening with heavy consequences for the future. In the big organisations, like the Fortune 500 Companies, the number of people employed full time shrunk from 19% of the workforce two decades ago to less than 10% (Castro, 1993). Initially justified by marketing difficulties due to foreign competition, retrenchment has become fashionable and a kind of panacea, although actually only about a third of the companies which performed major lay‐offs reported increases in productivity and profits, while a plummeting morale surfaced in 80% of the cases. Therefore, more and more such organisations are getting, as it were, “lean and lame” (Henkoff, 1994).