Strategic Restructuring and Organizational Developments

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Strategic Restructuring and Organizational Developments

Introduction

This discussion is directed toward company restructuring and repositioning, specifically my personal experiences in a project dependant industry, and the evolution of a business structure and organizational culture of flexibility and adaptability. Many companies operating in a project specific and contract dependant industry are required to align employees with processes and strategies to ensure smooth transition in an often dynamic and changeable environment. Companies competing in dynamic market environments have evolved and adapted to stay competitive and profitable. It is important to recognize the alignment of company culture toward the employee and the strategic role HRM has in the planning and preparation when restructure process is under-taken. The topics and reflections in discussion, although often specific to experiences in the contract and project environment, are also transferable across other industries.

The Motives for Restructuring

In essence the market environment is what drives changes in organizational strategy and structure. The new economic environment of increased competition and instability has moved organizations toward more responsive business structures. The Petroleum Industry is classic case of economic and market forces which have historically created cycles of high growth and recessional lows. Companies competing in the petroleum industry have evolved and adapted, in a strategic capacity, to stay competitive and profitable (Cibin and Grant, 290).

Organizational change can be said to encompass structural change or strategic change (Lines 2005, 10). Structural change, as defined by Lines, encompasses the merger of two companies, creation of new departments, and delayering or downsizing of an organization. Also restructuring can be strategic, which tends to involve changes in market domain resulting in changes of structure systems and processes. An example would be companies seeking, efficiency, innovation, and quality improvements.

Companies also seek strategic advantage through business process development to realize efficiency, innovation, and quality improvements. “Business process improvement is fundamental to business development, quality improvement and the management of change” (Bendell 2005, 969). Strategic process improvement approaches such as ‘Six Sigma’, originating in Motorola, and ‘Lean Organization’ pioneered by Toyota, have now spread across manufacturing, design and transactional areas.

When people consider restructuring thoughts often are of significant company reshuffle or acquisition, where cost cutting and job losses are the principal and most visible impact. But restructuring is also project or area specific, related directly to strategic business objectives and the competitive market. Consider a project life cycle scenario or subcontractor subject to a fixed term contract, the contract period is often finite number of years, months or even weeks. Examples can be found in project intensive industries such as engineering and construction, IT, and research and development areas (Soderlund and Bredin 2006). These industries all suffer similar issues when addressing the finite project life cycle.

Companies are likely to experience multiple restructuring change scenarios at different stages which require different restructuring approaches. Certainly if companies want to compete in a competitive business environment, then business adaptation and change is inevitable. What the organization and management does to reduce the impact and speed the recovery will determine the overall implementation success.

Perception and Measuring Success

Whether the change is viewed as a success depends obviously on the situation and needs to be examined from perspective of the organization and the individual. From the organizational perspective, my personal experiences in project transition were...
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