Academic journal article Journal for East European Management Studies

Employment Restructuring in Polish Companies during Economic Transition: Some Comparisons with Western Experience*

Academic journal article Journal for East European Management Studies

Employment Restructuring in Polish Companies during Economic Transition: Some Comparisons with Western Experience*

Article excerpt

This paper summarizes the results of a survey of downsizing practices in 90 Polish manufacturing companies. Unlike Russia, where very few employment reductions have been carried out, downsizing in Polish companies is pervasive and appears to be accelerating. The factors that drive downsizing in a transition economy like Poland are not the same as those in the west. Nonetheless, the results of this study indicate that downsizing in Poland has had mostly beneficial effects on company functioning.

Dieser Aufsatz fasst die Ergebnisse einer Umfrage über Einsparungsmassnahmen in 90 polnischen Industriebetrieben zusammen. Im Gegensatz zu Russland, wo nur sehr wenige Personalkurzungen durchgefúhrt warden, sind Personaleinsparungen in Polen allgegenwärtig und sie werden scheinbar beschleunigt. Die Faktoren, die zu Personalentlassungen in einem Übergangsland wie Polen führen, sind nicht identisch mit denen im Westen. Nichtsdestotrotz zeigen die Ergebnisse der Studie, dass Entlassungen in Polen meist einen positiven Effekt auf die Betriebsperformance haben.

Key Words: Downsizing / Poland / employment / international human resources management

The Economic Transition and Employment Rationalization in Central Europe

As economies transition from the industrial to the information age, manufacturing workforces have been shrinking. Even after the huge wave of company downsizing in the early 1990s in the United States, the manufacturing sector in America is expected to decline at an average rate of 0.2% through 2005 (Castells 1996).

In Japan and Europe, the challenge of employment restructuring is even more salient. The economies of Central and Eastern Europe for example, are a special case in that their employment structures are far more antiquated than in the West, and they face special problems resulting from the past policies of the socialist period. Whereas Western Europe has considerable experience with restructuring, for the managers in the post-socialist countries of Central Europe, downsizing is a relatively new experience. As a result of the economic transformation occurring in the region, however, massive shifts in employment have taken place since the early 1990s as companies privatised and new entrepreneurial ventures emerged.

Given the tremendous significance of these changes to the region, there have been surprisingly few studies dedicated to assessing how the process of job reduction is actually carried out inside Central European companies. This study attempts to help fill this gap in the literature by examining the rationalization of employment in Polish companies during the period of post-communist economic transition.

Despite the relevance of downsizing to practicing managers, some authors have pointed out our inadequate understanding of the problem. For example, Cameron (1994) claims that downsizing remains one of the most understudied aspects of business life. Studies of American downsizing have been critical of the way it has been managed by U.S. companies (Cascio 1993). Downsizing programs of many U.S. companies have been criticized for poor planning and management and for not bringing about expected improvements in company performance as measured by costs, productivity, and especially employee morale (Cascio 1993; Mroczkowski/Hanaoka, 1997). Surveys of American job elimination provide evidence of persistent problems with the collapsed morale of the remaining employees (AMA 1995; AMA 1999). Some writers point out that sudden disruption of key relationships within a downsized organization leads to a loss of "corporate memory" that can be damaging to creativity and growth (The Economist 1996). Organizations may thus be threatened by a breakdown of tacit knowledge resulting from excessive turnover or poorly managed downsizing (Baumard 1999; The Economist 2000). Some of the literature, however, outlines strategies of well planned and managed organizational downsizing that avoids the pitfalls and maximizes the benefits (Cameron 1994). …

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