ABSTRACT
Following a twenty-seven-year reform and opening to the outside world, China has witnessed a successful transition from a highly centralized and planned economy to a market economy. Facing such changes in this transitional economy, downsizing is reportedly a common response to this emergent, global environment (Mirabal and Young 2005: 39). Therefore downsizing cannot be overlooked by any enterprise for it has brought about fundamental changes in corporate governance structure, labour reallocation, industrial relations, unemployment and layoffs. Incorporating downsizing in the strategic management plan can increase organizational efficiency by maintaining a focus on core competencies that promote competitive advantage and increasing (or at least maintaining) current levels of market share (Mirabal and Young 2005: 39).
