HR implications of Organisational Restructuring: Concept and Practices

Abstract

Corporate restructuring has been the focus of much debate in the past few decades. Research indicates that there are three forms of restructuring: financial, portfolio, and organisational. Business leaders across the globe look at organisational restructuring as organisation-wide intervention to adapt, survive, innovate, grow, enhance performance and improve their competitiveness in a fast-changing environment. The paper attempts to understand the concept, model and practices of organisational restructuring widely prevalent in Indian and global context. The restructuring is a process of making a major change in the organisation structure which involves reengineering, delayering and smart sizing or downsizing to render the organisation flatter, leaner to expedite decision-making, reduce cost to be competitive and do more with less. The paper discusses how organisational restructuring is a tool to drive enterprisewide changes to achieve the strategic objectives. The paper reflects the role of top management, HR, and argues that the restructuring often turns out to be painful experience at the time of downsizing and increased outsourcing. While discussing its impact on firm performance, certain cases in the corporate, MNC and PSU sector have been analysed as to how organisational restructuring becomes a top-management-driven strategic intervention to pave way for survival, turnaround, growth.