TY - JOUR

T1 - Downsizing, Ideology and Contracts

T2 - A Chinese Perspective

AU - Zhao, Jun

AU - Rust, Kathleen G.

AU - McKinley, William

AU - Edwards, John C.

PY - 2010

Y1 - 2010

N2 - PurposeThe purpose of this paper is to explore the effects of three managerial ideologies on the degree of employment contract breach perceived in connection with a downsizing.Design/methodology/approachSurveys were used to collect data from southwest China. Multiple regression analyses were conducted to explore the impact of three managerial ideologies on the perceived employment contract breach in connection with downsizing.FindingsResults suggest that a strong belief in the ideology of market competition reduces an individual's perception that downsizing constitutes a breach of the employment contract between employer and employee. By contrast, a belief in employee worth has the opposite effect, strengthening the believer's perception that downsizing constitutes an employment contract breach. Belief in the third ideology, the ideology of shareholder interest, appears to have no influence on whether respondents perceived downsizing as an employment contract breach.Practical implicationsThe results are important for understanding the way employees interpret common business practices like downsizing. Given the accumulation of enough confirmatory results, findings from studies like this paper might be used to inform the practice of management, which might result in a more satisfied and better performing workforce.Originality/valueThis paper contributes to the literatures on organizational downsizing and business ideologies. Specifically, it investigates ideological beliefs and their effects on perceptions of downsizing in a new arena – a country that is not used to the concepts of market competition and shareholder interest, and one that has only experienced large‐scale layoffs in very recent times. The view of the western business concepts such as psychological contract within the context of traditional Chinese philosophies and value systems provides in‐depth understanding of the challenges facing today's transitional economies such as China.

AB - PurposeThe purpose of this paper is to explore the effects of three managerial ideologies on the degree of employment contract breach perceived in connection with a downsizing.Design/methodology/approachSurveys were used to collect data from southwest China. Multiple regression analyses were conducted to explore the impact of three managerial ideologies on the perceived employment contract breach in connection with downsizing.FindingsResults suggest that a strong belief in the ideology of market competition reduces an individual's perception that downsizing constitutes a breach of the employment contract between employer and employee. By contrast, a belief in employee worth has the opposite effect, strengthening the believer's perception that downsizing constitutes an employment contract breach. Belief in the third ideology, the ideology of shareholder interest, appears to have no influence on whether respondents perceived downsizing as an employment contract breach.Practical implicationsThe results are important for understanding the way employees interpret common business practices like downsizing. Given the accumulation of enough confirmatory results, findings from studies like this paper might be used to inform the practice of management, which might result in a more satisfied and better performing workforce.Originality/valueThis paper contributes to the literatures on organizational downsizing and business ideologies. Specifically, it investigates ideological beliefs and their effects on perceptions of downsizing in a new arena – a country that is not used to the concepts of market competition and shareholder interest, and one that has only experienced large‐scale layoffs in very recent times. The view of the western business concepts such as psychological contract within the context of traditional Chinese philosophies and value systems provides in‐depth understanding of the challenges facing today's transitional economies such as China.

KW - Entrepreneurship

KW - Downsizing

KW - China

KW - Newly industrialized economies

KW - Breach of contract

KW - Employment contracts

U2 - 10.1108/17506141011053050

DO - 10.1108/17506141011053050

M3 - Journal articles

VL - 4

SP - 119

EP - 140

JO - Chinese Management Studies

JF - Chinese Management Studies

SN - 1750-614X

IS - 2

ER -