Company Restructuring and Loss of Human Capital in Ttansition Processes - Example of Serbia

The restructuring of the company is usually taken into consideration in terms of reducing costs and the need to increase effectiveness. Most often this process results in downsizing. In this paper, we assume that downsizing does not necessarily mean lower costs and increase of effectiveness. In this context, we emphasize the complexity of the process and the unacceptability of a simplified calculation of making savings by reducing the cost of wages as a result of downsizing. The processes of downsizing and firing must be designed and conducted with a strategic vision, so as not to have impact on the efficiency of the company due to loss of key competencies and overall competitiveness. At the same time, it is pointed out that companies which follow this simplistic logic of fewer employees - lower costs negatively affect the social stability of society and increase the costs of other activities, contributing to reducing economic and social stability of society. The restructuring is a necessary companion to the transition process, and consequences can be critical for destabilization of societies in transition. Moreover, a great threat is represented by the way of conducting the privatization process, as well as the lack of good intentions of entrepreneurial and managerial skills. The aim of this paper is to examine to what extent the process of transition in Serbia contributed to strengthening the competitiveness of Serbian economy in terms of human capital as the key assumptions of competitiveness in accessing the European economic area.