The effect of downsizing strategy and reorientation strategy on a learning orientation

This paper integrates literature from downsizing and organisational learning. A conceptual framework is developed which argues that downsizing (adaptive or single loop learning) and reorientation (double loop or generative learning) will have a negative and positive effect respectively, on the three elements of a learning orientation: commitment to learning; shared vision); open‐mindedness. Data were collected from the top 2,000 manufacturers in Australia, and analysed using a structural equation modelling approach. Results confirm the study hypotheses. Implications for management are discussed, along with suggestions for further research.