Organizational structure is the arrangement of organizational subsystems, (sub-units) into a hierarchy of authority relations. This process includes the division of labour, the allocation of resources needed to perform tasks and the definition of areas of responsibility. The manager/senior manager publicly owns the system, execute rules and ideas and consequently bear the consummation of the failure and success of his implementations.
In the past work of the organization have been based on redundancy which was helpful in less competitive environments. The globalization of markets, the economic recession, new customer requirements for product- and service quality, and the rapid development of information technology (IT) require new strategies for successful enterprising, as well as new methodologies and tools for system analysis and design in dynamic environments. Organization need to develop and change in order to survive.
Although there are many competing approaches on how organization’s improvement can be achieved, but organization restructuring seems to be the most attempting model in order to change the organization in the private and public side.In their striving for competitive advantage, reduced costs and increased profitability many companies are embarquing on Organisational Re-structuring which if done well, may deliver extraordinary gains in speed, productivity, and profitability. Many companies have therefore launched large efforts to deliver greater customer value by “restructuring” their businesses, for gaining competitive advantage. Organisational Restructuring has gained a considerable attention in the world of change management.
It can be postulated that there is a common ratifying on the claim, that no organization is better than the individuals working in it. This makes the design of the human resources architecture the most analytical task within the restructuring efforts .What a manager/senior managers need to understand is not simply the technical content of the system but how people will react. Human resources management helps in identifying, developing, retaining and appropriating scarce resources.
There has been a great deal of concern over efficient management and good organization practices and structures in order to create effective relationships within the Human Resources since inefficient structure and poor communication can no longer be excluded in an increasingly competitive environment .One of the most important aspects of organizational behaviour is the need for change in response to environmental changes. This implies the deplacement of goals, organizational learning and the adoption of new organizational structures and processes.
Changing in behavior is brought about by changing systems; the way in which people work. If the organization changes need to be affective and result in a more productive working relationship it shouldn’t only be a matter of belief neither a matter of logic, organizational change is perceived as a rational logical process known to involve believes and values. Change is a random process unless the manager was in touch with those who are involved in the organizational structure. And within changes differences were created between the modern and the traditional structure of the organization.
There is general consensus on the need of organizational change as well on the fact, that there are lots of difficulties narrated to it. Change is not a simple process of establishing a new organizational structure and explaining its advantages in comparison to the old one, change can intimidate the excitement and advantage of groups within the organization, it can be desirable to one group and perceived by another. Beyond that, an uncertainty about “what is going to happen” is often found, even if the result to strive for seems to look good. The processes of restructuring organizations is far more than a science like mathematics, where a sequence of logical steps is performed and the result will always be the same, if the procedure is followed correctly, even by different people. Performing an analysis includes intuition, the consideration of the dynamic environment and of the culture that is specific for every single organization specially that Organisational structure cannot be changed in isolation.
Changes take places within the organization and are concerned with internal and external boundaries and structures. Senior managers tried to restructure their organizations in different ways such as processing, reengineering, responsiveness, empowerment, Negotiation- which beholds risk sharing, confidentiality and continual improvement- as a step to inveigle employees to have a huge commitment and loyalty to the organization consequently mobilize behavior to achieve requested desideratum.
Within senior manager’s attempts to restructure their organization, employee’s attitudes are revealed as a result of such a change. Resistance to change, for instance, is a function which rates how people had accepted or is willing to change. Proportionately, methods such as nepotism, accountability, and seniority have could be used to move people up.
Despite the response made by employees, senior mangers didn’t stop their attempts trying to restructure or redesign the organization structure by; developing HRM strategies based around internal labor market with job ladders, regulations, redefining work descriptions , encouraging organizational learning ,training and developing systems, creating multidivisional structures, modifications in size and having second thoughts about classical form carrying implications for career and development possibilities and chances improving job design , multiple managerial roles replacing the supervisory management and presenting a challenge facing classical (traditional )principles , satisfying client’s demands while minimizing workforce disruption .
Restructuring may be accomplished by making changes to different structures that as a whole create the organisational structure and reflect the reality that restructuring is a process that involves innovation, (IT) development within HRM transactions .Such changes may include:
* reducing the number of employees (cost structure)
* reorganizing activities (organizational structure)
* Focusing on the core business (asset structure).
* changing the incentives of management (governance structure)
* debt restructuring (capital structure)
Restructurings appear in many different gradations, it can be limited to a change in one or the structures or to all the organisation’s structures what should be kept in mind is that wherever the change was, restructuring can affect all elements and structures in the organisation. This is one of the reasons behind using the term restructuring as a general expression instead of its having a specified definition specially that it includes different procedures. As a process restructuring is affected by the organizational goals and objectives which are influenced by external forces including environmental externalities (competition, regulations, markets, and financial reasons, stakeholder inputs and demands). The restructuring results are translated through social, environmental, and economic outcomes reflected as a serious change within the organisation’s structure.
Restructuring has created alternative forms like SBUs, Smaller organizations, Slimmer Organizations, Downsizing, Outsourcing, Reengineering, and Subverted Bureaucracies. Organizations have enhanced business and customer behaviors through creating Strategic Businesses Units (SBUs) as an attempt to induce flexibility through cross functional teams. Other Forms of Restructuring may cover Expansion such as Joint ventures, divestitures such as Spin-offs, corporate control such as Dual-class recapitalizations, changes in ownership structure such as chare repurchases and privatization.
Because of the fact that Bureaucracies were not flexible enough to respond quickly to the increasingly changeable market, many thoughts and attempts has been conducted against bureaucracy .Restructuring thoughts has perverted bureaucratic forms through the modern structure of the organisations through which it enabled companies to meet customers demands and respond quickly to changes unlike the Bureaucratic form . And as the modern structure replaced the Bureaucratic structure, flexible job designs has replaced the narrow jobs specifications.
Downsizing is the exclusion of specific jobs reducing personnel and labour costs by eliminating functions, business units, and hierarchical management levels and altered work processes. Reengineering is the organizational restructuring activity to associate with a clear set of management practices to improve performance by aligning organizational structures with business processes. Outsourcing is a particular form of downsizing whereby firms contract outside vendors to provide goods, services, and labour. Outsourcing activities include information technology, human resources, customer service, finance, marketing, sales, and transportation.
Outsourcing is seen as a mean to reduce costs by contracting highly skilled, productive workers in order to perform specialized functions, to achieve scale and specialization economies, to reduce costs and increase flexibility through an enhanced ability, to improve focus, share risks, and accelerate efforts and to alter labour while achieving quick response to problems. Outsourcing has organizational effects that are both similar to and distinct from downsizing and reengineering, but they all are followed to improve organizational effectiveness , with attempts to solve problems such as Functional Specialisation Rightsizing of work , Redeployment of redundancy and Induction of technology while promoting efficiency and flexibility .
Joint ventures and alliances provide the firm with the much needed to compete effectively in the global marketplace. Being a powerful tools to rapidly build capability, and often turn out to be more flexible, less risky and more cost-effective strategies Joint Ventures are believed to venture into new markets, gain access to new distribution channels, acquire new technologies, enhance new product development capabilities and improve performance as a result they are used to help the firm adjust and adapt to the rapidly changing conditions within restructuring.
Various companies have experienced (are experiencing) restructuring within its various structures to pursue a redesign in one or in all of these structures to develop through different forms and aspects to overcome environmental competing externalities meeting customers demands. Consequently senior managers have chosen restructuring as a path to reduce generic process and costs with keeping the development of products and quality accordingly reduce customer’s problems and reduce failure.