Organisational downsizing and new venture creation in transitional economies: a study of managerial effectiveness in transition

This paper explores ways of helping managers of large state-owned companies in transitional economies to acquire skills that may help them to downsize and to create small businesses. Following a review of literature on the needs of transitional economies, on experiences of downsizing in Western countries, on downsizing approaches and strategies, on the creation and development of small business, and on the development of management skills for organisational change, it has been possible to propose some guidelines to enable managers in countries such as those of Eastern and Central Europe deal with the problems of large, overstaffed and loss-making state-owned companies, to downsize them and turn them into smaller and more effective. It is concluded that management training and development is essential for the successful implementation of downsizing of large organisations and the creation of small and effective businesses.