The Effects of Downsizing in the Information Technology Field

THE EFFECTS OF DOWNSIZING IN THE INFORMATION TECHNOLOGY FIELD

for more information on using this paper properly!

Companies are asking for more from their employees now than ever before. By downsizing and outsourcing, and otherwise changing the corporate world for their employees, Information Technology companies have fundamentally changed the relationship between the organization and its employees. Indeed, Information Technology companies are becoming more and more eager to implement a scaled-down version of their operations as a means by which to minimize expenditures and maximize profits. "You have workers that are often difficult to train when willing, but are often unwilling to really work and earn their way" (Torres C2-6).

What is the impact of such significant downsizing to the Information Technology field in general? For one thing, globalization has cast an entirely new light upon the way that Information Technology companies operate amidst a growing atmosphere of global competition. Every opportunity to cut costs and increase revenue brings a company that much closer to overpowering its industry rival. "There are good reasons...to be skeptical about whether easing the way money flits around the world has brought more good than harm" (Moberg 18). While the globalization of the Information Technology industry greatly depends upon a firm's competitive position in a particular country being significantly impacted by its position in other countries, it can be readily understood that global industry is not just a collection of domestic industries but rather a group of linked industries in which rivals compete against one another upon a worldwide basis.

"Businesses when entering foreign markets must 'Think Globally, Act Locally,' effectively using the concept of the international product life cycle, and improve value chain activities to sustain their competitive advantages" (Industry-Specific Competitiveness Of A Nation).

Yet another impact of downsizing in the Information Technology field is the notion of inflation. Inflation and the business cycle are two economic entities that are forever intertwined. That one cannot exist without the other's influence is particularly pertinent when assessing how government attempts to minimize inflation along with the size of variations that exist in the business cycle. Samuelson explains why there has come to be a balance of unemployment with inflation, noting several changes that have occurred in order to achieve what economists have been forecasting for some time. Given the fact that the technological revolution has played an integral role in relation to the overall balance outcome, it can readily be argued that Samuelson places a significant amount of credit upon the companies that both create and utilize computer technology as a means by which to allow for "modest increases in labor costs without raising prices" (33).

The author also credits corporate downsizing and good fortune (subsidized health spending, cheaper imports) as giving company executives the upper hand when it comes to stabilizing the job market. This, according to the author, is what has caused the domino influence when it comes to inflation, unemployment and the business cycle. "What's occurred in the United States is that companies have refashioned pay practices to cushion the conflict between rising wages and higher prices" (Samuelson

...