Organizational Restructuring Case Study: Electric Dreams
Peter Nicholson proposes to remove two management levels from the organisational structure and to encourage greater empowerment of the workforce. Do you think that this is a good idea? Justify your view.
Delayering is the action or process of reducing the number of levels in the hierarchy of employees in an organisation. One reason why I believe this will be beneficial to Electric Dreams (ED) is because Peter has declared himself that he aims to reduce costs and improve the speed of decision-making. Delayering should allow for both of these goals to be achieved. Although the business will have to pay redundancy packages to those workers who are losing their jobs, in the long term it will be cost beneficial to the business as they will no longer be required to pay those workers’ wages. This should in turn improve the financial position of the business as its overall costs are being reduced. With that, the business’ profits should see an increase. Delayering will also help improve the speed of decision making within the business. ED plans to remove two management levels from the organisational structure. This is likely to alter the business’ hierarchical structure from a tall structure to a flat one. This will mean there are fewer levels in the hierarchy and therefore a shorter line of communication. This allows for quicker decision making as it takes less time for a message to make its way from the bottom of the hierarchy to the top. This will be greatly beneficial to the business as it will improve efficiency and overall, employees will be able to get things done quicker. Peter also mentions how he believes the business has to respond quickly to market changes. A hierarchical structure that allows for quicker decision making will definitely cater for this wish.
Another reason why I agree with Peter’s decision to implement delayering into the business is that it will allow for greater empowerment to the business’ employees. This will happen as the result of there
Delayering is the action or process of reducing the number of levels in the hierarchy of employees in an organisation. One reason why I believe this will be beneficial to Electric Dreams (ED) is because Peter has declared himself that he aims to reduce costs and improve the speed of decision-making. Delayering should allow for both of these goals to be achieved. Although the business will have to pay redundancy packages to those workers who are losing their jobs, in the long term it will be cost beneficial to the business as they will no longer be required to pay those workers’ wages. This should in turn improve the financial position of the business as its overall costs are being reduced. With that, the business’ profits should see an increase. Delayering will also help improve the speed of decision making within the business. ED plans to remove two management levels from the organisational structure. This is likely to alter the business’ hierarchical structure from a tall structure to a flat one. This will mean there are fewer levels in the hierarchy and therefore a shorter line of communication. This allows for quicker decision making as it takes less time for a message to make its way from the bottom of the hierarchy to the top. This will be greatly beneficial to the business as it will improve efficiency and overall, employees will be able to get things done quicker. Peter also mentions how he believes the business has to respond quickly to market changes. A hierarchical structure that allows for quicker decision making will definitely cater for this wish.
Another reason why I agree with Peter’s decision to implement delayering into the business is that it will allow for greater empowerment to the business’ employees. This will happen as the result of there