A Study Of Theories And Practices Of Corporate Downsizing

The domestic enterprises are facing a totally new international environment and development opportunities as our country has become a formal member of WTO. The international economical diffusion effects become even clearer; the degree of uncertainty for enterprises is keeping increasing in a more opened market system. Moreover, the economic system reform in our country has expended thoroughly in recent years. As such, how to rationally and effectively reduce the redundant employees becomes a notable topic that is worth for the enterprises to probe and study.This paper, based on the study of theories and practices of corporate downsizing, proposes a train of thought and solutions for corporate downsizing. It starts from a theoretic analysis of downsizing and then indicated the significance of downsizing for the enterprises. In light of a comparative analysis on background, methods, employee structures, models, out of employment mechanism, and result between both American enterprises and Chinese enterprises, the paper points out several key issues that should be taken care of by the enterprises in our country's economic transition process. Finally, based on the analysis of the problems occurred in the process of downsizing, the paper indicates the methods for rationally and effectively reducing redundant employees by the enterprises and the legal issues during the process while downsizing staff. In the case analysis part, the paper first discusses the humanization model by "Agilent" in its downsizing processes, and then re-thinks about the problem of downsizing in our country. It presents the first hand materials about downsizing staff by the BY Company as well as the discussion on the effectiveness of downsizing staff by the state owned large and middle sized enterprises.It is the author's hope that the research presented in this paper could be helpful to the practice of downsizing staff by the enterprises in our country.