This was a novel and innovative use of layoffs, especially as the practice penetrated managerial ranks. The shift in perception of layoffs as a last resort, used only in times of economic desperation, to a first resort, utilized in good times and bad, planted the seed of the social movement. Over time, companies tend to use the same procedures, tactics, policies, and strategies. The common tendency to imitate is heightened in an environment of uncertainty. Imitation is reinforced in many ways.
Executives socialize and learn from each other, supporting and encouraging the practice.
Indeed, those who do not leave themselves open to criticism by shareholders, security analysts, boards of directors, and even fellow executives. Wall Street analysts, for instance, will downgrade a company that is not downsizing, even if layoffs are unjustified, and most such actions produce a jump in stock prices, albeit a temporary one. Finally, this movement is aided by the types of people who rise to positions of prominence and power. In the last 20 years, more corporate leaders have come from finance. They are more likely to view the corporation as a basket of assets than a social institution and to prefer tactics such as downsizing as a way to solve competitive problems.