Business Research: Impact of Organizational Restructuring - Report

This report delves into the multifaceted concept of organizational restructuring, examining its significance in today's competitive business environment. The paper begins with an introduction that highlights the increasing pressures on businesses to adapt and evolve, emphasizing the importance of restructuring for survival and financial success. It explores the definition of organizational restructuring, its various drivers, and its impact on organizational development. The report also analyzes the process of organizational restructuring, including the implementation of innovative technologies and talent acquisition strategies. Furthermore, it delves into the positive and negative impacts of restructuring, such as changes in management, employee turnover, and financial strategies. The study then discusses issues related to the restructuring process, including employee adaptation, stakeholder sensitivity, and implementation challenges. The report also reviews different theories regarding organizational restructuring, including lifecycle, evolutionary, dialectical, and teleological theories. The findings section summarizes the key changes and the effective functioning of the restructuring methods. Finally, the report identifies gaps in the existing literature, focusing on the need for a clear understanding of the practical implications of restructuring theories across different sectors. The report concludes by summarizing the key points and the importance of understanding organizational restructuring for business success.

Running head: BUSINESS RESEARCH
BUSINESS RESEARCH
Name of the student
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Author note

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Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1. Organizational restructuring............................................................................................2
2.2. Impact of organizational restructuring............................................................................3
2.3. Issues regarding organizational restructuring process....................................................4
2.4. Theory regarding organizational restructuring............................................................5
2.4.1. Lifecycle theory...................................................................................................5
2.4.2 Evolutionary theory...................................................................................................5
2.4.3. Dialectical theory.....................................................................................................6
2.4.4. Teleological theory...................................................................................................6
3. Findings..................................................................................................................................6
4. Literature gap.........................................................................................................................8
5. Conclusion..............................................................................................................................8
Reference:..................................................................................................................................9

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Literature Review
1. Introduction
The workplaces and businesses today are fast paced and global and they all are under
high pressure for staying competitive to exist and achieve their financial results. The
emergence of internationalization and globalization have made change, an important and
inevitable part of every companies so as to thrive and survive in such a competitive
organization. This paper sheds light on significance organizational restructuring. By
highlighting the significance, the literature review has introduced different theories regarding
organizational changes. By continuing this, highlighting different issues related to the
organizational restructuring process and its psychological and physical impact on the
employees, the chapter has focused on providing measurable recommendations. The main
aim of this paper is to investigate the process of organizational restructuring and its impact on
the overall organizational development and success.
2. Discussion
2.1. What is Organizational restructuring?
The term organizational restructuring can be considered as the delicate phrase that
brings considerable changes in organizational life as well as the people who are associated
with the company (Holten & Brenner, 2015). Depending on the situational as well as growth
needs in an organisation, the organizational restructuring process is being developed. In order
to drive the financial adjustments in the workplace, the significance of organizational
restricting process cannot be denied. The corporate restructuring process in an organization
can be developed based on various reasons. In the words of Abildgaard, Nielsen and Sverke
(2018), corporate restructuring can be done based on different reasons. In order to incorporate
technological innovation, organizational restructuring brings a positive impact on its growth.

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2.2 The process of organizational restructuring
Micucci and Rossi (2017) opined that in most of the cases, it had been identified that
management decides to bring the restructuring process for installing the innovative software
or any other improvement tools, which can bring benefits for both the employees and
employers. On the other hand, it is true that in the case of talent acquisition, corporate
restructuring process brings a significant impact on organizational practices. In case of
reducing expenses or gaining the competitive advantage, the organizational restructuring
process is highly popular among the organizations (Korski, Tobór–Osadnik & Wyganowska,
2016). Some of the cases, based on the changes made by the organizations, influences the
productivity but can also play an essential role in bringing improvement in organizational
culture. Therefore, there is no total denial that the corporate restructuring process has a
substantial impact on business expansion.
Based on the determination of the area, in which improvement is required, the
restructuring process is being developed. By continuing this, it has been identified that in
order to introduce effective restructuring practices, it is very important to analyses the
situational importance. Introducing the restructuring process in an organization is not only a
lengthy process but also the complexity of this process cannot be denied. In the case of
implementing the restructuring plan risks factors cannot be avoided (Koukoulaki et al., 2017).
Depending on the strength as well as weaknesses of the company the restructure program is
being developed in which both the short term and long term plans are being included. In the
scenario of developing the restructuring planning process, funding is being considered as one
of the important elements. After the completion of the restructuring process, result
evaluations are being done so that both the positive and negative site of the plan can be
properly analysed.

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2.3. Impact of organizational restructuring
The corporate restructuring process is introduced for bringing organizational
efficiency (Girod & Whittington, 2017). Thus, restructuring, reduces the struggle of the
organisation. By bringing the management changes, the restructuring process brings the
major impact on organizational development. Analyzing the impact of organizational
restructuring process, depicts that the influences in organizational shift has both a positive
and negative impact. Some of the cases, in order to enter in a new market or introducing new
product in the market, the organizational restructuring process is being implemented. In the
organizational restructuring process new management is being introduced for bringing the
positive changes in the workplace. Some of the cases, due to changes in administrative
working procedure, employees face challenges for adapting the practices. On the other hand,
due to lack of adaption abilities, during the restructuring process, employee turnover rate also
gets influenced. Not only the organizational shift but also it brings a strong impact on the
financial strategies adopted by the organizations. It cannot be denied that in most of the cases,
the organizational restructuring process is being developed based on reducing the costs of the
company operations (Benos et al., 2016).
It has been identified that the financial strategically changes some of the cases helps
to introduce merge and acquisition strategy that helps to manage the long term expansion
benefits in the organization. By continuing this, it has also been identified that in case of
entering in the new market place, restructuring the business helps the organization to set
different skills, which can help the company to provide better services to the customers.
Distribution strategy of the company is highly influenced based on the business restructuring
process (Singh, Mahmood & Natarajan, 2017). It is true that based on the analysis, it has been
identified that in case of the one-way restructuring process, different sales channels bring
impact on the product fulfilment, customer service, information technology and accounting

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services. Restructuring helps to implement the rebranding process. Some of the cases,
marketing messages are being added by bringing the changes in distribution strategy and the
developing product mix.
2.4. Issues regarding organizational restructuring process
Organizations are being considered as the organic communities which are being
forced towards the innovation process for ensuring that sustainability. In the case of an ever-
changing and forced dynamic process, operational changes are being occurred. Some of the
cases, the adaption of organizational changes create a major barrier for the employees.
Therefore, confusion and disruptions can be considered as common elements in every change
process. Some of the cases, restructuring does not bring any typical improvements in
organizational productivity. Due to the lack of implementation processes, some of the cases,
the improvement effort fails, which dissatisfied the physical and psychological expectations
of individuals (Eisenhardt & Bhatia, 2015). It is true that some of the cases based on changes
stakeholders are being sensitized, which increases the risks in the organization.
2.5. Theory regarding organizational restructuring
Analysing theoretical aspects of the organizational restructuring process, it has been
identified that by bringing the changes in process, procedure, strategies, culture and
technologies, the organizational restructuring plan is being implemented. Based on the
organizational change development process, various theories have been introduced.
2.5.1. Lifecycle theory
In the year 1999, thee lifecycle theory has been introduced by Aldrich. The lifecycle
theory on change development can be divided into three fundamental groups.

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• Development model: As per the development model, the organizational changes are being
composed based on different stages such as growth stage, emergency stage, maturity stage
and decline stage (Lowell, 2016).
• Metamorphosis model: This model is being considered as thee halfway of theories and
evaluation process. In this case, the changes are being introduced for those organizations
which do not fit in the environment. As per the metamorphosis model, changes occur based
on the abrupt way rather than the gradual way. In this model, the internal restricting is being
highlighted for gaining a better result.
• Scenario model: Depending on the assumptions and decisions made by the managers, the
scenario model is being developed.
2.5.2 Evolutionary theory
As per the evolutionary theory, the change is being introduced in case of gaining a
competitive advantage. By develop change framework, community engagement and
structural changes in the organisation is being introduced. In the evolutionary theory, change
is being introduced based on the VSR processes (variation-selection-retention). In the cycle
of variation-selection-retention, the simple process of change is being introduced (Chiu &
Yen, 2015). By developing the stress between two parties, the evolutionary theory supports
Darwinism. By continuing this, it can be said that in the case of understanding the population
ecology, evolutionary theory plays an effective role.
2.5.3. Dialectical theory
In this theory, change is being developed due to a conflicting situation. In the case of
Dialectical theory, based on the assumption characteristics, domination, as well as the
controlling process in the organization, can get influenced. Not only based on the internal
perspectives, but also highlighting the external perspectives of the organization, the change

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process is being introduced. It is mentioned in this theory that the power of change is being
developed based on the situational need the organization.
2.5.4. Teleological theory
By highlighting the organizational contribution towards achieving the specific
objectives, Teleological theory is being characterized. Depending on the continuous growth
opportunities, the reformulation of objectives is being done. By continuing this, it can be said
that based on the constant feedback cycle, the Teleological theory helps to analyses the
organizational problem and provide better solutions (Chiu & Yen, 2015).
3. Findings
The different organizational operations that are considered by the ventures support the
same in enhancing the operation. The assessment of different theoretical constructs supported
in identifying the organizational operations while commencing with the organizational
restructuring process. The organizational restructuring process supports an organization in
enhancing the operations of the same while operating in the different markets. The restricting
of the organizations are reliant on the assessment of internal and external environments. The
delineation of different theoretical models supported in identifying issues that might be
encountered by the ventures while supporting the organizational restructuring procedure. The
key changes in the organizational operations supported the smooth functioning of the systems
in adherence to the demand of the customers.
The key changes in the organizational operations are reliant on the effective
functioning of the systems in adherence to the demand of the customers. On the other hand,
the delineation of different modifications in the organization are identified through the
assessment of specific set of skills and knowledge of the organizational processes. The major
points of operations in an organizational operation are reliant on the restructuring of the

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processes in alignment with the strategic needs of the venture. Again the effective functioning
of the processes contributed to the effectiveness of the organizational restructuring methods.
The assessment of the different operations and the manner in which the same might be
encouraged enhanced the rate of operations of the venture while operating in the different
markets.
In the literature it has also been identified that bringing the management changes, the
restructuring process brings the major impact on organizational development. In case of
bringing ever changing and forced dynamic process, operational changes are being
introduced. By continuing this it has also been identified that in case of entering in the new
market place, restructuring the business helps the organization to set different skills, which
can help the company to provide better services to the customers in better manner. The
literature has shed light on different theoretical aspects of organizational process. In this
chapter different restructuring issues such as lack of adaption abilities among the
stakeholders, risk factors and implementation challenges have been mentioned.
4. Literature gap
Analyzing the entire literature review, it can be said that in the literature review, different
theoretical aspects organizational restructuring process have been mentioned. However, the
implications of these theories have not been mentioned clearly. For this purpose, the
knowledge gap present on the organizational restructuring in different sectors should have
been provided so that clear view of practical implications can be gathered. On the other hand,
highlighting the issue of organizational restructuring process, the literature has not disused
about measurable solutions for dealing with the situational challenges. With the same, the
changes that have occurred in different fields regarding organizational restructuring over the
recent years have not been considered in the researches. It is also to mention that the findings
and results of this literature review open new avenues for the future research and this might

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also serve as a source of hypothesis for the future research. It is suggested that the future
researches need to take into consideration both the positive and negative influence of
organizational restructuring in different sectors and how it can contribute towards
organizational development.
5. Conclusion
Hence, from the above analysis it can be said that organizational restructuring is very
vital in this fast paced developing business world. Today, organizations are changing
continuously because of different reasons like increase in productivity, cutting of cost,
changes in the economic demands etc. However, it is to note that organizational restricting is
not that easy process as of the different challenges it brings in. One of the greatest obstacle
for the change management process is the staff and employee resistance. In this entire
research, different theoretical aspects of organizational restructuring process has been
highlighted. Understanding both the benefits and issues of organizational restructuring
process its impact on individuals has been understood. Hence, for an organization to become
successful, it must have the right staff and people in place because employees are always a
vital component that helps in successful implementation of the change.

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Reference:
Abildgaard, J. S., Nielsen, K., & Sverke, M. (2018). Can job insecurity be managed?
Evaluating an organizational-level intervention addressing the negative effects of
restructuring. Work & Stress, 32(2), 105-123.
Benos, T., Kalogeras, N., Verhees, F. J., Sergaki, P., & Pennings, J. M. (2016). Cooperatives’
organizational restructuring, strategic attributes, and performance: The case of
agribusiness cooperatives in Greece. Agribusiness, 32(1), 127-150.
Chiu, R. H., & Yen, D. C. (2015). Application of organizational life cycle theory for port
reform initiatives in Taiwan. Research in Transportation Business &
Management, 14, 14-24.

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Eisenhardt, K. M., & Bhatia, M. M. (2017). Organizational complexity and computation. The
Blackwell companion to organizations, 442-466.
Girod, S. J., & Whittington, R. (2017). Reconfiguration, restructuring and firm performance:
Dynamic capabilities and environmental dynamism. Strategic Management
Journal, 38(5), 1121-1133.
Hirst, A. (2011). Settlers, vagrants and mutual indifference: unintended consequences of hot-
desking. Journal of Organizational Change Management, 24(6), 767-788.
Holten, A. L., & Brenner, S. O. (2015). Leadership style and the process of organizational
change. Leadership & Organization Development Journal, 36(1), 2-16.
Hornstein, H. A. (2015). The integration of project management and organizational change
management is now a necessity. International Journal of Project Management, 33(2),
291-298.
Korski, J., Tobór–Osadnik, K., & Wyganowska, M. (2016). Reasons of problems of the
polish hard coal mining in connection with restructuring changes in the period 1988–
2014. Resources Policy, 48, 25-31.
Koukoulaki, T., Pinotsi, D., Georgiadou, P., Daikou, A., Zorba, K., Targoutzidis, A., ... &
Drivas, S. (2017). Restructuring seriously damages well-being of workers: The case
of the restructuring programme in local administration in Greece. Safety science, 100,
30-36.
Lowell, K. R. (2016). An application of complexity theory for guiding organizational
change. The Psychologist-Manager Journal, 19(3-4), 148.