Question
What do you understand by 'Organisational Restructuring'? Discuss the primary reasons why established organisations choose to restructure their designs and outline the key steps involved in the restructuring process.
Answer :
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Skip in 10
Organisational restructuring refers to the deliberate process of changing the structure, systems, processes, roles, responsibilities, and relationships within an organisation to improve its effectiveness, efficiency, and adaptability. It involves redesigning the organisational framework so that the organisation can better respond to internal challenges and external environmental changes. Restructuring may include changes in hierarchy, departmental arrangements, reporting relationships, workflows, decision-making authority, communication channels, staffing patterns, and business processes. In the field of Organisational Theory and Design, restructuring is viewed as a strategic intervention that aligns organisational design with changing goals, technologies, market conditions, and stakeholder expectations. Organisations operate in dynamic environments characterized by technological innovations, changing customer preferences, increasing competition, globalization, regulatory changes, and economic uncertainties. Structures that were effective in the past may become inefficient or obsolete over time. Consequently, established organisations often undertake restructuring initiatives to maintain competitiveness and achieve long-term sustainability. One of the primary reasons for organisational restructuring is environmental change. Modern organisations face rapidly evolving external conditions. Technological advancements, digital transformation, globalization, and changing market demands often require organisations to modify their structures. A rigid hierarchical structure may not support the speed and flexibility needed in contemporary business environments. Restructuring helps organisations become more responsive and adaptive to environmental changes. Another significant reason is the need to improve organisational performance. Over time, organisations may experience declining productivity, reduced profitability, operational inefficiencies, or poor service delivery. Ineffective
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