Strange days indeed

understanding the productivity paradox when firms close

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Publication year: 2006

Both the public and private sectors have since the 1980s relentlessly cut the size of their workforces. The downsizing has regularly been reported to lead to closure of a whole or a part of a corporation or organization. Some studies which have analysed the closure process have reported remarkable, counterintuitive improvements in labor productivity during the period between the closure announcement and the final working day. Testing an elaborated cybernetic model on a Swedish case study, and on an exploratory basis, this paper proposes a holistic approach to generate a better understanding of this phenomenon. The main holistic pattern is a new order where management control is replaced by more “Self-management” on the plant level, and very strong psychological reactions based on feelings of unfairness.


Rune Wigblad

Högskolan Dalarna; Företagsekonomi
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John Lewer

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Magnus Hansson

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