THE ANALYSIS OF ILL EFFECT OF PERSONAL REDUCTION ON THE SYSTEM OF CHINESE ENTERPRISES BY THE CAUSE OF REDUNDANT PERSONNEL

摘要

The traditional theory defines the cause of Redundant Personnel as that the Center Planned Economy "Budget Restriction Degradation" determines that the enterprises will have excessive requirements on production factors and consequently brings about inner Redundant Personnel. According to the investigations and analysis, however, the essay points out that the essential reason of Redundant Personnel lies on that the Marginal Output of enterprise is lower than labor's wages. And another point of view is that the labor should be taken as capital, not simply as cost or assets. Additionally, the essay will analyze the ill effect of Personnel Reduction upon enterprises, and the enterprise thereby will take fully consideration of the environment of knowledge economy and the proper reason of state owned enterprises - stale equipment, outdated techniques and low management standards and avoid the embarrassment of very little effects or no effect at all during implement of the Personnel Reduction Strategy.