1 If a function is outsourced and consequently provided by an external supplier, the workers performing that function are no longer members of the parent organisation. This can have an impact on factors such as loyalty and ‘ownership’ of problems.

What would be the essence of an HRM argument against outsourcing? Large organisations faced with having to rationalise operations for a variety of reasons have cut back significantly on numbers of employees, generally in the hope of creating leaner but economically healthier entities.

Particular targets in this rationalisation exercise have been headquarters or corporate staff, who have become victims of what is called ‘organisational downsizing’.

Downsizing has also been associated with an across-

the-

board reduction in the headcount. Some are of the view that downsizing harms the organisation in certain key functions, whereas others point to positive outcomes in terms of faster decision-

making due to fewer management levels through which decisions have to pass for approval. Downsizing and delayering are complementary in the sense that reducing hierarchical levels is a means of achieving downsizing