organizational restructuring case study

Organizational restructuring case example - five key success factors

A practical case example based on our coaching work with SV Group highlights five key factors to watch out for when doing an organizational restructuring in-house

When the business division head and group executive board member at the swiss international catering and hotel business SV Group set out to redesign her organization, she knew she wanted to approach things differently.

Her goals were to reduce costs, increase market penetration, and improve strategic account management. Early on in the process, the manager decided to plan and run the restructuring work in-house, with support from the group’s HR team, but without external help from a consultant other than some focused coaching support from Management Kits .

One reason for this was the cost pressure from the heavy impact of the corona virus on the business. More importantly, however, she believed that she had the business knowledge and capacity within her team (and with her HR business partner) to pull off an optimal solution internally - one that would simultaneously be owned by her people from the start.

The manager chose a participatory, workshop-based approach, working with her current leadership team to discuss and decide on the strategy, design the new organization, and run the implementation.

Five ways to make in-house organizational restructuring a success

Based on our consulting and coaching experience leveraging Management Kits resources, we believe that several aspects of this case example are highly relevant for anyone running organizational restructuring work in-house.

Listed below are 5 ways to make participatory organizational restructuring a cost-efficient and impactful driver of organizational performance.

1. A clear strategic vision, translated into organizational priorities

Any organizational redesign work should begin with a dedicated discussion of strategy. The clearer the strategic vision, the better. This vision, however, must be translated into clear priorities for the organizational design.

In the case example, the leaders’ priorities were clear:

Realign the organizational unit structure to be more customer-focused (in this case, following a regional model)

Restructure the old General Manager “jack of all trades” model to create dedicated leadership roles for operations and for the business: one focused on running the shop and pushing operational excellence and efficiency, one focused on strategically winning clients and developing key accounts.

Build links, structures, and a culture to support collaboration between roles and between units to push market penetration and innovation.

2. Know when the participatory approach has its limits

When it comes to cost cutting as part of organizational restructuring, at a certain point participatory approaches reach their limits. Headcount reductions and middle managers changing roles lead to difficult conversations - conversations that cannot be had in a full workshop setting.

Once the organizational structure and design have been defined by the work group and it comes to “putting names to roles”, a leader must make crucial decisions.

The leader making the decision can and should consult with stakeholders. She can and should be transparent about the decision process: who makes the decision, which criteria are applied, and when the decision is made and communicated, for example.

But, notwithstanding stakeholder consultations and process transparency, at the end of the day, decisions about assigning roles, hiring, and firing cannot be made in a participatory way.

3. Fine tune and test the redesigned organization

Well-facilitated participatory workshops are a great way to come up with solutions that capture the intimate organizational knowledge owned by the team.

At the same time, you need to make sure that workshop outputs are subsequently finetuned and pressure tested.

One good way to test organizational designs is to simulate how the new organization would handle critical questions and make important decisions. Questions include:

Who would participate in the decision-making process?

Who would have which role, and what are their contributions and deliverables throughout the process?

How do interfaces and process handovers work?

This simulation can be done in a follow-on session after the workshop, where the new design was drafted.

4. Dedicated program management

When planning and implementing organizational restructuring work in-house, it is crucial to dedicate sufficient program resources to the task. This can be carved out from the work team or come from an internal HR business partner, but it has to be done and it requires discipline and focus to see it through.

Exemplary tasks include:

Do the workshop planning on both the program and the individual workshop levels, including identifying participants, scheduling, etc.

Run critical preparation work, including setting the workshop agenda, working methodologies, roles, etc.

Connect loose ends, follow up on questions that come out of the workshops, keep track of task backlog

Cover workshop documentation work, communications, and sharing of results

5. Leverage change as an opportunity for organizational innovation

Organizational restructuring work is often done in times of crisis.

But crises always entail opportunities.

In the case example, the company’s HR team had an ongoing workstream on the future of work. One important initiative was to increase the levels of self-management in the organization and to move toward an organizational structure of interconnected circles.

With the upcoming change to unit structures and roles described above, there was an opportunity to launch critical elements of forms of organizing and decision-making as part of the transformation work.

Giving critical restructuring work to a specialized consultant can fast-track the redesign and program management work. But it is also expensive and risks losing the commitment of critical team members along the way.

Choosing the in-house option means investing a significant amount of time, energy and effort upfront - an investment that can pay off later through confidence in the solution and the building of team capabilities for redesign and implementation, not to mention the cost savings.

If done the right way, an in-house approach can give you the best of both worlds.

Reflecting on the process and the outcome with some distance, stakeholders of the process at SV group agreed that they would take the same approach again - even though the journey through the crisis involved difficult challenges and, in parts, painful change. Given the industry environment and the impact of Covid 19 there had not been much of a choice whether to drive change. However, there had been a choice on how to do it. And in this regard, the organization has learned how to pursue an in-house, participatory approach, and would follow the same process if the requirement arose.

Boost organizational effectiveness with Management Kits

We are grateful to SV Group for sharing their story. For any questions to SV, please reach out to Sonya Stocker, Head Training and Development, SV Group .

When and how to involve senior stakeholders in organization design projects

One key purpose of Management Kits is to empower managers to set up and run collaborative...

How to use principles to guide your organization design work

Defining principles at the beginning of your design work helps to align your team and stakeholders...

To build a purpose-driven company, get this one thing right

Enabling a Collaborative Approach to Organization Restructuring

Staples is a globally recognized office supply retailer with more than 34,000 employees. Over the course of 35+ years, Staples has navigated changing markets and a competitive landscape to establish itself as a multinational industry leader. In 2013, Staples announced a massive organization restructuring of its European operations, launching what was possibly the largest transformation endeavor in their industry. The changes involved were tremendous in scope and difficulty, including large-scale layoffs and significant revisions of roles and responsibilities. The employees of Staples’ European division faced intense pressure and substantial uncertainty, a combination that fueled the buildup of tremendous negative tension within the company. One senior vice president described how he allowed the challenging situation to detrimentally impact his leadership: “I had reverted to my own instincts, was short with my teams, really not patient with them, just wanting to get things done.” As a result, he saw that “the teams were getting quieter and quieter, and I was getting less and less feedback.” The strain became so pronounced between different locations and operational functions that the president of Staples Europe described it as being virtually “a state of warfare…where people were constantly barraging one another.” Under these deteriorating conditions, very little business was being accomplished.

For many Staples’ employees, the proposed changes were so far-reaching that they were difficult to accept. There were high levels of resistance that prohibited real change from taking place. Recognizing that their carefully conceived plan for organization restructuring was doomed to fail without proactive intervention, Staples Europe leadership turned to Arbinger for assistance. They needed a fundamental shift in mindset to cultivate greater collaboration between team members and to inspire employee dedication to a new vision for the company’s future.

Arbinger consultants carefully gathered relevant contextual details to inform their efforts and support Staples’ organization restructuring. This information was utilized to design customized workshop sessions for the senior levels of Staples Europe leadership. Arbinger facilitators met with the leadership team every three to six months from June 2013 to January 2015. This format provided flexible, ongoing support adapted to the evolving needs of the transitioning division. Every work session was carefully crafted to support a specific stage of the restructuring process. Subsequent meetings supported implementation efforts, and provided the opportunity for reflection, clarification, and further application refinement. Arbinger provided the leadership team with an overarching structural framework and workable vocabulary to facilitate a transformation in mindset. Team members learned to magnify their influence by taking greater responsibility for the impact of their work on various constituents. They were also equipped with tools to invite greater collaboration and sustain synergy, thereby becoming better capable of resolving the specific challenges of each restructuring phase. Rather than providing an externally mandated and ultimately unsustainable change in policy or procedure, Arbinger worked to unlock the capabilities that were already within the Staples Europe team but were curtailed by stress and high levels of uncertainty.

Because of their work with Arbinger over the course of several months, Staples Europe was able to better execute the multiple intricate components of their monumental organization restructuring. By focusing attention on the mindset that underlies productive behaviors, senior leadership was able to strengthen their working relationships. The president of Staples Europe described the change in this way: “I think the Arbinger Principles are very powerful really because they change your philosophy. They change the way you’re thinking about business. Instead of blaming each other, which has been our historical approach, we started asking ‘how can we help one another?’” He went on to describe how that adjustment, which can sound simplistic on the surface, helped create tangible impacts: “Just that simple shift in mindset has made an enormous difference in the quality of communications, the quality of our understanding, and our cooperation between units and locations.” Improving understanding, communication, and cooperation were crucial elements for their successful restructuring effort.

This change in the leadership team helped to spread an atmosphere of collaboration throughout the transitioning organization, helping to temper what had previously been runaway levels of stress and negative tension. The managing director of Staples’ retail operations in Belgium, the Netherlands, and Luxembourg, credited the new mindset among employees as an important contributing factor to the division’s success. Without a strategic and sustained shift in mindset, navigating the complexity inherent in a restructuring enterprise of such scope would have been exponentially more difficult. One senior vice president praised the Arbinger framework for offering “a neutral way of bringing up the issues” that had been inhibiting effective professional relationships, one that allowed teams to be “far more collaborative.” Arbinger was able to help the Staples Europe leadership team unleash the latent talent and cooperation waiting within their workforce.

Staples has better results thanks to the new mindset of all the players within the company. Roland Laschet – Managing Director | Staples Retail Benelux

Enabling Collaboration through Conflict Resolution Training

Improving results by changing systems through healthcare consulting, measuring impact in nonprofit to dramatically improve effectiveness.

Getting organizational redesign right

“If at first you don’t succeed, try, try, try again.” If W. E. Hickson, the British author known for popularizing that familiar proverb in the mid-19th century, were alive today, he might easily be applying it (disparagingly) to the efforts of modern corporations to redesign their organizations.

Recent McKinsey research surveying a large set of global executives suggests that many companies, these days, are in a nearly permanent state of organizational flux. Almost 60 percent of the respondents, for example, told us they had experienced a redesign within the past two years, and an additional 25 percent said they experienced a redesign three or more years ago. A generation or two back, most executives might have experienced some sort of organizational upheaval just a few times over the course of their careers.

One plausible explanation for this new flurry of activity is the accelerating pace of strategic change driven by the disruption of industries. As a result, every time a company switches direction, it alters the organization to deliver the hoped-for results. Rather than small, incremental tweaks of the kind that might have been appropriate in the past, today’s organizations often need regular shake-ups of the Big Bang variety.

Frustratingly, it also appears that the frequency of organizational redesign reflects a high level of disappointment with the outcome. According to McKinsey’s research, less than a quarter of organizational-redesign efforts succeed. Forty-four percent run out of steam after getting under way, while a third fail to meet objectives or improve performance after implementation.

The good news is that companies can do better—much better. In this article, we’ll describe what we learned when we compared successful and unsuccessful organizational redesigns and explain some rules of the road for executives seeking to improve the odds. Success doesn’t just mean avoiding the expense, wasted time, and morale-sapping skepticism that invariably accompany botched attempts; in our experience, a well-executed redesign pays off quickly in the form of better-motivated employees, greater decisiveness, and a stronger bottom line.

Why redesign the organization?

Organizational redesign involves the integration of structure, processes, and people to support the implementation of strategy and therefore goes beyond the traditional tinkering with “lines and boxes.” Today, it comprises the processes that people follow, the management of individual performance, the recruitment of talent, and the development of employees’ skills. When the organizational redesign of a company matches its strategic intentions, everyone will be primed to execute and deliver them. The company’s structure, processes, and people will all support the most important outcomes and channel the organization’s efforts into achieving them.

When do executives know that an organization isn’t working well and that they need to consider a redesign? Sometimes the answer is obvious: say, after the announcement of a big new regional-growth initiative or following a merger. Other signs may be less visible—for example, a sense that ideas agreed upon at or near the top of the organization aren’t being translated quickly into actions or that executives spend too much time in meetings. These signs suggest that employees might be unclear about their day-to-day work priorities or that decisions are not being implemented. A successful organizational redesign should better focus the resources of a company on its strategic priorities and other growth areas, reduce costs, and improve decision making and accountability.

The case of a consumer-packaged-goods (CPG) company that chose to expand outside its US home base illustrates one typical motivation for a redesign. Under the group’s previous organizational structure, the ostensibly global brand team responsible for marketing was not only located in the United States but had also been rewarded largely on the performance of US operations; it had no systems for monitoring the performance of products elsewhere. To support a new global strategy and to develop truly international brands and products, the company separated US marketing from its global counterpart and put in place a new structure (including changes to the top team), new processes, new systems, and a new approach to performance management. This intensive redesign helped promote international growth, especially in key emerging markets such as Russia (where sales tripled) and China (where they have nearly doubled).

Avoiding the pitfalls

That CPG company got it right—but many others don’t, and the consequences can be profoundly damaging. Leaders who fail to deliver the benefits they promise not only waste precious time but also encourage employees to dismiss or even undermine the redesign effort, because those employees sense that it will run out of steam and be replaced by a new one, with different aims, two to three years down the line.

We believe that companies can learn from the way successful redesigners overcome challenges. By combining the results of our research and the insights we’ve gained from working with multiple companies on these issues, we’ve identified nine golden rules. They cover everything from early alignment, redesign choices, and reporting structures to performance metrics, the nature of effective leadership, and the management of risks.

Individually, each of the rules is helpful. Our research shows, though, that 73 percent of the executives whose companies followed more than six of them felt that the organizational redesign had succeeded. Executives at these companies were six times more likely to “declare victory” than those at companies that adopted just one or two.

Following all nine rules in a structured approach yielded an even higher success rate: 86 percent (exhibit).

The rules, it’s important to make clear, are not self-evident. We tested more than 20 common approaches and found that upward of half of them weren’t correlated with success. We expected, for example, that benchmarking other companies and trying to adopt some of their structural choices might be an important ingredient of successful redesigns—but there is no evidence from the research that it is. Our rules, incidentally, are broadly relevant for different industries, regions, and company sizes. They also hold true for redesigns prompted by different types of organizational change, including end-to-end restructurings, postmerger integration, or more focused efforts (such as cost cutting or improvements in governance).

1. Focus first on the longer-term strategic aspirations

Leaders often spend too much time on the current deficiencies of an organization. It’s easy, of course, to get fixated on what’s wrong today and to be swayed by the vocal (and seemingly urgent) complaints of frustrated teams and their leaders. However, redesigns that merely address the immediate pain points often end up creating a new set of problems. Companies should therefore be clear, at the outset, about what the redesign is intended to achieve and ensure that this aspiration is inextricably linked to strategy. One retail company we know, strongly committed to creating a simple customer experience, stated that its chosen redesign option should provide “market segment–focused managerial roles with clear accountability” for driving growth. The specificity of that strategic test proved much more helpful than simply declaring a wish to “become customer-centric.”

2. Take time to survey the scene

Sixty percent of the executives in our survey told us they didn’t spend sufficient time assessing the state of the organization ahead of the redesign. Managers can too easily assume that the current state of affairs is clear and that they know how all employees fit into the organizational chart. The truth is that the data managers use are often inaccurate or out of date. A high-profile international bank, for example, publicly announced it was aiming to eliminate thousands of staff positions through an extensive organizational redesign. However, after starting the process, it discovered to its embarrassment that its earlier information was inaccurate. Tens of thousands of positions, already referenced in the press release, had been inaccurately catalogued, and in many cases employees had already left. This new organizational reality radically changed the scope and numbers targeted in the redesign effort.

Knowing the numbers is just part of the story. Leaders must also take time to understand where the lines and boxes are currently drawn, as well as the precise nature of talent and other processes. That helps unearth the root causes of current pain points, thereby mitigating the risk of having to revisit them through a second redesign a couple of years down the road. By comparing this baseline, or starting point, with the company’s strategic aspirations, executives will quickly develop a nuanced understanding of the current organization’s weaknesses and of the strengths they should build on.

3. Be structured about selecting the right blueprint

Many companies base their preference for a new structure on untested hypotheses or intuitions. Intuitive decision making can be fine in some situations but involves little pattern recognition, and there is too much at stake to rely on intuition in organizational redesign. Almost four out of five survey respondents who owned up to basing decisions on “gut feel” acknowledged that their chosen blueprint was unsuccessful. In our experience, companies make better choices when they carefully weigh the redesign criteria, challenge biases, and minimize the influence of political agendas.

Interestingly, Fortune magazine found that its Most Admired Companies had little in common when it came to aspects of their organizational design, beyond a flexible operating model. 1 1. Mina Kimes, “What admired firms don’t have in common,” Fortune , March 6, 2009, archive.fortune.com. This finding is consistent with our experience that off-the-shelf solutions aren’t likely to work. The unique mix of strategy, people, and other assets within a company generally requires an individual answer to things like role definition, decision-making governance, and incentives, albeit one based on a primary dimension of function, geography, or customer segment. The key is to get the right set of leaders reviewing options with an open mind in the light of redesign criteria established by the strategic aspiration.

Take a large public pension system we know. Its leaders convinced themselves that a new organization must be set up along product lines. Challenged to reconsider their approach, they ultimately arrived at a functional model—built around health, pensions, and investment—that has served the system well over the past five years and underpinned significant cost savings and the launch of innovative new products.

4. Go beyond lines and boxes

A company’s reporting structure is one of the most obvious and controllable aspects of its organization. Many leaders tend to ignore the other structure, process, and people elements that are part of a complete redesign, thereby rearranging the deck chairs but failing to see that the good ship Titanic may still be sinking.

Companies such as Apple and Pixar are well known for going far beyond lines and boxes, taking into account questions such as where employees gather in communal spaces and how the organizational context shapes behavior. One small but fast-growing enterprise-software player we know made some minor changes to senior roles and reporting as part of a recent organizational redesign. But the biggest impact came from changing the performance-management system so that the CEO could see which parts of the company were embracing change and which were doing business as usual.

Surveyed companies that used a more complete set of levers to design their organizations were three times more likely to be successful in their efforts than those that only used a few. The strongest correlation was between successful redesigners and companies that targeted at least two structural-, two process-, and two people-related redesign elements.

5. Be rigorous about drafting in talent

One of the most common—and commonly ignored—rules of organizational redesign is to focus on roles first, then on people. This is easier said than done. The temptation is to work the other way around, selecting the seemingly obvious candidates for key positions before those positions are fully defined.

Competition for talent ratchets up anxiety and risk, creating a domino effect, with groups poaching from one another to fill newly created gaps. This is disruptive and distracting. A talent draft that gives all units access to the same people enables companies to fill each level of the new organizational structure in an orderly and transparent way, so that the most capable talent ends up in the most pivotal roles. This approach promotes both the perception and the reality of fairness.

Powerful technology-enabled solutions allow companies to engage hundreds of employees in the redesign effort in real time, while identifying the cost and other implications of possible changes. One web-based tool we’ve seen in action—full disclosure: it’s a McKinsey application called OrgLab —helps leaders to create and populate new organizational structures while tracking the results by cost, spans, and layers. Such tools expand the number of people involved in placing talent, accelerate the pace, and increase the level of rigor and discipline.

6. Identify the necessary mind-set shifts—and change those mind-sets

Leaders of organizational-redesign efforts too often see themselves as engineers and see people as cogs to be moved around the organizational machine. Organizations, however, are collections of human beings, with beliefs, emotions, hopes, and fears. Ignoring predictable, and sometimes irrational, reactions is certain to undermine an initiative in the long run. The first step is to identify negative mind-sets and seek to change the way people think about how the organization works. Actions at this stage will likely include communicating a compelling reason for change, role modeling the new mind-sets, putting in place mechanisms that reinforce the case for change and maintain momentum, and building new employee skills and capabilities.

Would you like to learn more about our expertise in Organization Design?

One company in the payments industry—beset by changing consumer habits, technology-led business models, and regulatory pressure—understood the importance of shifting mind-sets as part of its recent redesign. The group’s sales team traditionally worked well with large retailers and banks. But looking ahead, the company knew it would be important to establish a new set of relationships with high-tech hardware and software players. Simply appointing a new boss, changing role descriptions, and drawing up a revised process map wasn’t enough. The company therefore embarked on a program that consciously sought to shift the thinking of its sales experts from “we create value for our customers” to “we create value with our partners.”

7. Establish metrics that measure short- and long-term success

Nobody would drive a car without a functioning speedometer, yet a surprising number of companies roll out an organizational redesign without any new (or at least specially tailored) performance metrics. Some older ones might be relevant, but usually not the whole set. New metrics, typically focusing on how a changed organization is contributing to performance over the short and long term, are best framed at the aspiration-setting stage. Simple, clear key performance indicators (KPIs) are the way forward.

During the redesign effort of one high-tech manufacturer, it set up a war room where it displayed leading indicators such as orders received, orders shipped, supply-chain performance, and customer complaints. This approach helped the company both to measure the short-term impact of the changes and to spot early warning signs of disruption.

One utility business decided that the key metric for its efficiency-driven redesign was the cost of management labor as a proportion of total expenditures on labor. Early on, the company realized that the root cause of its slow decision-making culture and high cost structure had been the combination of excessive management layers and small spans of control. Reviewing the measurement across business units and at the enterprise level became a key agenda item at monthly leadership meetings.

A leading materials manufacturer introduced a new design built around functional groups, such as R&D, manufacturing, and sales, but was rightly anxious to retain a strong focus on products and product P&Ls. To track performance and avoid siloed thinking, the company’s KPIs focused on pricing, incremental innovation, and resource allocation.

8. Make sure business leaders communicate

Any organizational redesign will have a deep and personal impact on employees—it’s likely, after all, to change whom they report to, whom they work with, how work gets done, and even where they work. Impersonal, mass communication about these issues from the corporate center or a program-management office will be far less reassuring than direct and personal messages from the leaders of the business, cascaded through the organization. An interactive cascade (one that allows two-way communication) gives people an opportunity to ask questions and forces top leaders to explain the rationale for change and to spell out the impact of the new design in their own words, highlighting the things that really matter. This can take time and requires planning at an early stage, as well as effort and preparation to make the messages compelling and convincing. When a top team has been talking about a change for weeks or months, it’s all too easy to forget that lower-ranking employees remain in the dark.

One financial-services company encouraged employee buy-in for an organizational redesign by staging a town-hall meeting that was broadcast in real time to all regional offices and featured all its new leaders on a single stage. The virtual gathering gave them an opportunity to demonstrate the extent of their commitment and allowed the CEO to tell her personal story. She shared the moment when she realized that the organization needed a new design and the changes she herself was making to ensure that it was successful. All employees affected by the changes could simultaneously talk to their former managers, their new managers, and the relevant HR representatives.

9. Manage the transitional risks

In the rush to implement a new organizational design, many leaders fall into the trap of going live without a plan to manage the risks. Every organizational redesign carries risks such as interruptions to business continuity, employee defections, a lack of personal engagement, and poor implementation. Companies can mitigate the damage by identifying important risks early on and monitoring them well after the redesign goes live. The CPG company mentioned earlier, for example, realized that rolling out its reorganization of sales and marketing ahead of the holiday season might unsettle some of those involved. By waiting, it made the transition with no impact on revenues.

Tracking operational, financial, and commercial metrics during a design transition is helpful, as are “pulse checks” on employee reactions in critical parts of the company. Clear leadership account-ability for developing and executing risk-mitigation plans is so important that this should be built into regular appraisals of managers.

In our experience the most successful organizations combine stable design elements with dynamic elements that change in response to evolving markets and new strategic directions. Corporate redesigns give organizations a rare opportunity to identify the stable backbone and set up those elements ripe for dynamic change. Successful leaders and successful companies take advantage of such changes to “rebuild the future”—but a landscape littered with failed efforts is a sobering reminder of what’s at stake. Following the nine simple rules described in this article will increase the odds of a happy outcome.

Steven Aronowitz is an associate principal in McKinsey’s San Francisco office, Aaron De Smet is a principal in the Houston office, and Deirdre McGinty is an associate principal in the Philadelphia office.

The authors wish to thank McKinsey’s Wouter Aghina, Lili Duan, Monica Murarka, and Kirsten Weerda for their contributions to this article.

Explore a career with us

The globally effective enterprise

The past and future of global organizations

Tom Peters on leading the 21st-century organization

A Complete Guide to Organizational Restructuring

One of the most common questions we are asked as an HR consulting firm is how to effectively navigate an organizational restructuring without impacting business continuity, eroding trust, or damaging the culture that holds the remainder of the organization together. A good friend told me once that people decide not to buy something for one of three reasons: man, money, or machine. It’s a sales analogy, but the same is true for restructuring projects; they all come down to a people problem, a price/money problem, or a product problem.

So the question is, how do we plan, organize and execute organizational restructuring projects and deliver the return on investment that we’ve set with the business as the project goal?

What is Organizational Restructuring?

In the simplest of terms, organizational restructuring is about having the right people, in the right place, doing the right jobs. The challenge isn’t the restructuring itself, it’s the underlying reasons that drive the restructuring in the first place. That and the fact that restructuring projects are by their very nature, disruptive . So, our first goal is to try to avoid disruption in the first place. Before embarking on a full organizational restructuring, we start with smaller, incremental changes to move the business toward the goal with less chaos. However, if we have determined a restructuring needs to take place, there are three basic approaches – which we implement individually or in combination.

What are the Types of Organizational Restructuring?

Now that we know what’s driving the project, what are our options? I mentioned it earlier – all restructuring falls into one of three categories: people, price, or product.

Reorganize Roles to Optimize for Skills and Process Efficiencies

The least invasive of the restructuring options, the classic reorg, is all about identifying what people do well and letting them do more of that, more efficiently. Oftentimes, there are no specific terminations or headcount reductions, but the effort is placed on defining effective processes and getting crystal clear on who is doing what, when, and how. A classic example of this is the implementation of a centralized call center to handle first level tech support in order to free up more seasoned engineers for product development or bug fixes. If you don’t have a job description or they are woefully out of date, this is the best place to start.

Move Jobs to a Lower Cost Location

Next is labor arbitrage, or moving (certain) jobs from high cost locations to lower cost locations. While we’re seeing less of this post-pandemic as more organizations are de facto working across more locations and have integrated arbitrage opportunities into their recruiting strategy, the opportunity is still there if your employees are in a location where wage rates are higher than average and the skills are readily transferable. While this is not a great strategy for highly skilled roles or roles that require highly experienced employees, it can work for roles where there is generally higher turnover, and fewer new skills to learn in order to be successful. Word to the wise, however, financial gains from labor arbitrage erode over time, so if you’re banking on a business case that is purely arbitrage, it must have a positive ROI within a year or so to be ultimately successful.

Outsource to a Third Party

Finally, we have outsourcing as the most impacting and most disruptive of organizational restructuring. In this case, responsibility for part of all of a function is handed over to another company in exchange for a fee. Business Process Outsourcing contracts can be very rewarding on both sides of the contract, provided that terms of service are clearly understood, the financial agreement can be reviewed at key milestones to ensure that everyone is doing what they need to to be successful and the employees who inevitably leave the organization are treated fairly on the way out. This kind of restructuring usually is the longest to implement and has the highest upfront cost because of the employee job loss, so if you’re considering outsourcing a function, make sure you’re in it for the long term. It’s hard to go back once you’ve started down this path.

Why Do Organizations Go Through Restructuring?

The key to running a successful change management and organizational restructuring project is defining a clear business case and evaluating the return on investment. People transition costs money – sometimes a lot of money. There needs to be a clear, positive ROI to the project to make it worthwhile. That being said, if there is a positive ROI (and we generally look for breakeven by the two-year mark for this), then a restructuring may offer the step change to help the organization embrace the change that’s needed for the business to continue to grow. While we say that, from an employee perspective, all change is bad, there are benefits to reorganizing and re-engaging with a new set of priorities and goals.

5 Signs Your Company Needs to Consider Organizational Restructuring

But how do we know when it’s time to engage in a full restructuring project? There are 5 key drivers that lead most companies to evaluate the business case for restructuring. Let’s look at each one.

1. Seeing a Decline in Revenue

Declining revenue or profit is the number one reason why organizations decide to restructure. In this case, the goal is either to reduce payroll expenses by cutting jobs or to redirect resources to focus on building revenue. For example, this could include cutting administrative roles and then adding headcount to support marketing and sales. Fair warning, however, there is something to be said for the old adage, you have to spend money to make money. No organization ever cut costs as the road to success, so restructuring here must start with strategy and process change before addressing organizational efficiencies.

2. Seeing an Alarming Client Turnover Rate

New customer acquisition is always more expensive than client retention, so it’s natural that when leadership sees a significant increase in client turnover – or churn – they will want to understand why and then figure out how to correct it – as soon as possible. Generally speaking, restructuring projects to address customer retention often include role redesign for account management, customer service, and sometimes even product development if the turnover is directly related to the quality of the product itself. Start with solid, in-depth, customer survey data first and use that to inform the process and people change that will be core to this kind of restructuring.

3. Growth Has Slowed or Stopped

A slow down in revenue growth can also indicate that a reorganization or restructuring is needed. More often than not, we see this start with headcount and budget “freezes” to protect profit, but if growth stagnates longer than a year, restructuring is in order. But again, the change needs to be strategic, focusing on cutting in those areas that aren’t driving the business and redirecting budget and additional headcount to departments that will drive new growth. Good data is important here – so measure twice, cut once.

4. Employees are Being Over or Underworked

Sometimes overlooked, especially if the overall financial performance is good, employee efficiency gains can be a great restructuring opportunity. Again here, data is key, so start with a benchmarking exercise to look at how much people are really working and what they’re working on. Are people working on the right stuff for the right amount of time? Once you have the answer to that question, then look at ways to reorganize job roles to get more efficiency from the same headcount. These sorts of reorgs can be perceived positively by employees if they feel that they have a say in the outcome and if they understand that the goal is to correct or prevent burnout and improve or protect employee retention rates.

5. Key Performance Indicators (KPIs) Are Not Being Met

For organizations that are data driven (we think they all should, but that’s another topic), KPIs can be a great indicator of where an organization is underperforming and can sometimes give clues as to what needs to be done to correct it. This is case by case, but if you are seeing dramatic changes in KPI performance – even if it can be explained by external factors, it’s probably worth looking at reorganization opportunities to drive ongoing sustainable change in how the work is getting done.

Does Organizational Restructuring Have You Stressed Out?

Reorgs and restructuring can be a daunting task, even for the experienced CEO or CFO. Getting it right means engaging in people and behaviors as well as the financial requirements to achieve the overall business goals. The good news is that you don’t have to do it alone. Contact us to see how we can help – from support for the business case preparation through to communications planning and execution and then implementation.

Building Engagement from the Inside

Gallup recently released an article that ranked employee engagement by state and even where it’s at its highest, it’s at […]

Case Study: Leadership Development and MBTI®

This project was part of a corporate leadership development program for hi potential talent and brought together about 50 senior […]

Above Footer Form

Fill out the form and one of our representatives will contact you within one business day.

Full Name *
Email Address *
Phone Number *
Business Name *
Number of Employees *
What Services Are You Interested In? *
Comments/Questions *
Phone This field is for validation purposes and should be left unchanged.

For News and Events

Organizational Restructuring

Reference work entry
First Online: 01 January 2018
pp 1223–1227
Cite this reference work entry

William McKinley 4

199 Accesses

This entry defines the construct ‘organizational restructuring’, reviews recent literature on organizational, financial and portfolio restructuring, and discusses directions for future research on restructuring.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Available as PDF
Read on any device
Instant download
Own it forever
Available as EPUB and PDF
Durable hardcover edition
Dispatched in 3 to 5 business days
Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

From patchwork to theory development: mapping and advancing research about business portfolio restructuring

Corporate distress and turnaround: integrating the literature and directing future research.

Amburgey, T.L., D. Kelly, and W.P. Barnett. 1993. Resetting the clock: The dynamics of organizational change and failure. Administrative Science Quarterly 38: 51–73.

Article Google Scholar

Balogun, J., and G. Johnson. 2004. Organizational restructuring and middle manager sensemaking. Academy of Management Journal 47: 523–549.

Google Scholar

Bethel, J.E., and J. Liebeskind. 1993. The effects of ownership structure on corporate restructuring. Strategic Management Journal 14(Special issue): 15–31.

Bowman, E.H., and H. Singh. 1993. Corporate restructuring: Reconfiguring the firm. Strategic Management Journal 14(Special issue): 5–14.

Capelle-Blancard, G., and Couderc, N. 2007. How do shareholders respond to downsizing? A meta-analysis . Unpublished manuscript, University Paris X Nanterre.

Chadwick, C., L.W. Hunter, and S.L. Waltson. 2004. Effects of downsizing practice on the performance of hospitals. Strategic Management Journal 25: 405–427.

Freeman, S.J., and K.S. Cameron. 1993. Organizational downsizing: A convergence and reorientation framework. Organization Science 4: 10–29.

Gibbs, P.A. 1993. Determinants of corporate restructuring: The relative importance of corporate governance, takeover threat, and free cash flow. Strategic Management Journal 14(special issue): 51–68.

Guthrie, J.P., and D.K. Datta. 2008. Dumb and dumber: The impact of downsizing on firm performance as moderated by industry conditions. Organization Science 19: 108–123.

Hannan, M.T., and J. Freeman. 1984. Structural inertia and organizational change. American Sociological Review 49: 149–164.

Haveman, H.A. 1992. Follow the leader: Mimetic isomorphism and entry into new markets. Administrative Science Quarterly 38: 593–627.

Hoskisson, R.E., and M.A. Hitt. 1994. Downscoping: How to tame the diversified firm . New York: Oxford University Press.

Jensen, M.C. 1986. Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review: Papers and Proceedings 76: 323–329.

Jensen, M.C., and W.H. Meckling. 1976. Theory of the firm: Managerial behavior, agency cost, and ownership structure. Journal of Financial Economics 3: 305–360.

Johnson, R.A., R.E. Hoskisson, and M.A. Hitt. 1993. Board of director involvement in restructuring: The effects of board versus managerial controls and characteristics. Strategic Management Journal 14(special issue): 33–50.

Kraatz, M.S., and E.J. Zajac. 1996. Exploring the limits of the new institutionalism: The causes and consequences of illegitimate organizational change. American Sociological Review 61: 812–836.

Krishnan, H.A., M.A. Hitt, and D. Park. 2007. Acquisition premiums, subsequent workforce reductions and post-acquisition performance. Journal of Management Studies 44: 709–732.

Luscher, L.S., and M.W. Lewis. 2008. Organizational change and managerial sensemaking: Working through paradox. Academy of Management Journal 51: 221–240.

McKinley, W., and A.G. Scherer. 2000. Some unanticipated consequences of organizational restructuring. Academy of Management Review 25: 735–752.

Mentzer, M.S. 1996. Corporate downsizing and profitability in Canada. Canadian Journal of Administrative Sciences 13: 237–250.

Nonaka, I., and H. Takeuchi. 1995. The knowledge-creating company: How Japanese companies create the dynamics of innovation . New York: Oxford University Press.

Zajac, E.J., and M.S. Kraatz. 1993. A diametric forces model of strategic change: Assessing the antecedents and consequences of restructuring in the higher education industry. Strategic Management Journal 14(special issue): 83–102.

Download references

Author information

Authors and affiliations.

Southern Illinois University, College of Business, 208A Rehn Hall, 1025 Linclom Drive, Carbondale, IL, 62901, USA

William McKinley

You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to William McKinley .

Editor information

Editors and affiliations.

GSBPP, Naval Postgraduate School, Monterey, CA, USA

Berkeley Research Group, LLC, Emeryville, CA, USA

David J. Teece

Haas School of Business, University of California, Berkeley, Berkeley, CA, USA

Copyright information

About this entry

Cite this entry.

McKinley, W. (2018). Organizational Restructuring. In: Augier, M., Teece, D.J. (eds) The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-00772-8_793

Download citation

DOI : https://doi.org/10.1057/978-1-137-00772-8_793

Published : 01 May 2018

Publisher Name : Palgrave Macmillan, London

Print ISBN : 978-0-230-53721-7

Online ISBN : 978-1-137-00772-8

eBook Packages : Business and Management Reference Module Humanities and Social Sciences Reference Module Business, Economics and Social Sciences

Share this entry

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

Publish with us

Policies and ethics

Find a journal
Track your research

Case Study: Successful Organizational Restructuring Led by Interim Executives

by Ioana Andrei | Jan 15, 2024 | Cases

In the dynamic landscape of modern business, organizational restructuring is a vital strategy for survival and growth. This article delves into the critical role of interim executives in spearheading successful restructuring efforts, drawing upon a variety of real-world case studies.

The Pivotal Role of Interim Executives

Interim executives, with their unique blend of experience and objectivity, are often brought in to navigate companies through transitional periods. Unlike traditional leaders, they are not encumbered by the company’s past or internal politics, allowing them to make unbiased decisions and implement changes swiftly and effectively.

Case Studies from SMW

Interim Digital Lead in Turkey : At a crucial juncture, an interim digital lead played a pivotal role in digitizing operations, overcoming cultural and logistical challenges. This initiative not only streamlined processes but also paved the way for sustainable growth.
Chief Digital Officer for a Global Financial Company : The interim executive successfully led a digital transformation, integrating advanced technologies that enhanced operational efficiency and customer engagement, thereby securing the company’s competitive edge in the financial sector.

Global Perspectives from Various Case Studies

Turnaround and Chapter 11 Bankruptcy Navigation ( Accordion ) : An interim CEO and CRO at a company facing bankruptcy adopted strategic initiatives, such as renegotiating leases and implementing operational improvements, leading to a successful restructuring and positive year-on-year growth. (hyperlink: https://www.accordion.com/our-insights/case-studies/serving-as-ceo-cfo-providing-turnaround-restructuring-support-manufacturing-company )
Strategic Merger of Non-Profit Organizations (Services for the UnderServed and Palladia) : In this merger, interim leadership was instrumental in harmonizing the operations and cultures of two large entities, ensuring a seamless transition and setting a foundation for future success.
Energy Sector Restructuring ( Newland Associates ) : Faced with a strategic evolution, a major energy company utilized interim management to handle sensitive downsizing while maintaining morale and mitigating talent loss, demonstrating the effectiveness of interim leadership in managing complex human resource challenges.

Common Themes and Lessons Learned

Across these case studies, several common themes emerge:

Agility and Speed : Interim executives are able to act swiftly, a critical factor in environments where quick decision-making can mean the difference between failure and success.
Expertise and Experience : These leaders bring a wealth of knowledge and a fresh perspective, often seeing opportunities and solutions that may not be apparent to internal stakeholders.
Objective Perspective : Free from internal biases and historical baggage, interim executives can make decisions based purely on what is best for the company.
Strategic Vision : Interim leaders often possess the strategic foresight needed to not only navigate current challenges but also to lay the groundwork for future success.

In conclusion, the strategic deployment of interim executives can be a game-changer in organizational restructuring. Their unique blend of agility, expertise, objectivity, and strategic vision equips them to handle the complexities of change management, driving organizations towards efficiency, innovation, and growth. This underscores the growing importance of interim management as a key strategy in today’s fast-paced business environment.

Case Study: A Critical Analysis of Restructurings by Sony Corporation

Restructuring is considered to be the corporate management term of reorganizing an organisations ownership, operations, legal and other structures within in order to make the company more profitable and more organized with its needs to be successful. There are many reasons for why restructuring includes the changes of the owner ships or the organisational structure , or a reaction towards a crisis or a change such as a change in the financial position , the company becomes bankrupt or it repositions or it bought out.

Sony had restructured themselves approximately five times over nine years. They have reorganized operation systems, they have restructured management teams, and they have added structures in the purpose to make profits. Due to all their problems they faced, Sony tried to correct them by changing structures and even eliminating some to try solving the problems.

Sony has restructured itself firstly by restructuring of electronics business, It has created the Ten-Company Structure, Sony also Unified-Dispersed Management Model, it also announced another round of organisational change of the board, Sony announced another restructuring exercise in 2001 and lastly in 2003 to reorganize Sony back to a seven business entity.

With regards to restructuring of Sony’s management, they felt that the “Group” structure was redundant therefore the new structure was to regroup the electronics business into eight companies. This restructuring exercise focused on the products that formed the “Others” group. Each of these divisions had their own goals and each division was responsible for all of its operations. The process was reduced from a number of six layers to minimum of four layers following the restructuring

Secondly in January 1996, they announced a new Ten-Company structure which replaced the eight company structure that was implemented in 1994. Under this new structure the Customer Audio and Video Company was split into three new companies namely: The show Companies, like the Home AV Company and the Personal AV Company. Then there was another new company called the Information Technology Company that was formed to enable more focus on Sony’s business interests in the IT and PC industry.

Thirdly Sony did some restructuring and created a Unified-Dispersed Management model. Sony’s electronic business was the focus of restructuring efforts therefore in April 1999 Sony announced changes in the organisational structure. The company wants to take advantage of the opportunities that are offered by the internet which is aimed at streamlining the business operations. Sony’s key business divisions were therefore reorganized into a network business. This concerned the drop of ten divisional companies into three network companies namely: Sony Computer Entertainment Company, the Broadcasting and Professional System Company, and Core Technology and Network Company.

By splitting the Sony headquarters in two separate units during the Unified-Dispersed Management it was aimed to reinforce the management capability of Sony’s demarcate roles of headquarters and the recently created network companies. In response to Sony’s financial problems they proclaimed that they were reshuffling their top management team and carry out ways that did cut some major cost exercises. Their manufacturing facilities were reduced and this resulted in an elimination of 17,000 jobs.

The restructuring that took place within the years was when the organisational board of directors were reorganized. During the month of May, the year of 1998, Sony transformed their work of its board of directors and it recognized and added some new positions such as the CO-Chief Executive Officer. Idei reshuffled the management system to facilitate quicker decision making and to improve the efficiency of Sony, it also got reshuffled in order to provide a greater role of clarity to the managers. This system separated the individual’s responsibilities for policies that were made to identify the responsibilities for the business operations.

The Fourth restructuring that took place was another round or organisational restructuring. Sony announced another round of organisational restructuring in March 2001 which was intended to transform into a Personal Broadband Network Solutions company, as a result of launching a wide variety of products and services under the broadband brand, this allowed the consumers across the world to gain access. Sony’s headquarters were also revamped into a Global Hub center under the new structural framework, this determined and showed that the roles were to devised into the whole companies management strategy.

Lastly In 2003 Sony announced another major restructuring exercise in order to strengthen its corporate value. Following this announcement Sony was reorganized into seven entities. These business units were given the power to structure short-term and long-term strategies. This restructuring was said to be carried out over a period of three years.

Why do you think Sony restructured itself as often as it did?

The purpose of restructuring Sony’s electronics business was intended to improve the company’s actual focus on the potential products and focus on the decision making process that would make the company more reactive to the changing environment within the market and then make decisions on those changes. This divisional company structure was the beginning of the company within a company system. Management restructuring took measure to reduce the company’s reliance on a single leader.

During this period of the Ten-Company Structure restructuring implication, changes in the marketing division, which belonged to the previous organisational set up, which created three new marketing groups for the company. The analyst said that because they consolidated Sony’s Japanese marketing operations in order to separate its universal procedures and processes so that the company could operate in a much more focused approach.

Centralizing all the R&D efforts of Sony was conducted during the restructuring of the Ten-Company Structure. The previous R&D structure was recreated and three new corporate laboratories were then established. Namely: Architecture Laboratory, Product development Laboratory and System & LSI Laboratory. In addition a new 021 laboratory was established in order to conduct a long term Research & Development for future technology products. This change was done in order to separate responsibilities and make it easier to manage.

The restructuring of the organisational structure aimed to achieve three main objectives which were: to strengthen the electronic business, to make and ensure that Sony’s three subsidiaries were private and to strengthen the overall management capabilities. The restructuring was intended to enhance the shareholder’s value through the creation of Value Management. This structure aimed at decentralizing the worldwide operations of the company.

The restructuring of the board of directors was intended make sure that Sony’s management was more responsive. Sony then again started announcing another change to the board of directors, he established yet another new position of co-chief executive officer. Idei reshuffled this management system again in order to make easy and speedy decisions, and to improve the company’s efficiency and provide the managers with much more clarified roles.

The fourth restructuring done of the organisational structure was implemented so that Sony could try becoming the leader within the media and technology industry and using the broadband era to accomplish that. This fourth restructure of the company concerned the designing of new headquarters to the functions as a hub for Sony’s strategy. Which in return would strengthen the electronic business and facilitate network based content distribution.

The fifth restructuring of reorganizing the business entities was aimed to try and create a much stronger corporate value. The fact that Sony reorganized the business entities to seven business , which consisted of four network companies and three business groups, this allowed the company to separate their long and their short-term strategies.

The actual mission of Sony is to secure the growth of the business in a sustainable manner, while at the same time constantly improving the company’s profitability. Therefore all the restructuring that was done was intended to reach a leading position in attractive markets and to focus on securing competitive share of electronic consumer goods. They also wanted to improve the company’s efficiency and cut costs in operation.

Looking at the restructuring that was done each one had a purpose and a reason why it was implemented and therefore because of its financial problems and other concerns it faced it was only natural for a business to implement certain strategies to try resolve to the problem. Although some businesses would not have gone through the same extent as Sony of continuing to restructure, they did however have their reasons and aimed to become better.

To what extent did Sony’s restructuring efforts centralize or decentralize decision-making within Sony.

Decentralized decision making is any process where the decision making authority is distributed throughout a larger group. It also means that a higher authority is given to lower level functionaries, executives, and workers. This can be in any organization of any size, from a governmental authority to a corporation. Centralized decision making is whereby a top manager retains most decision- making power to him/her self.

During the restructuring or the organisational structure from an eight divisional company to a ten-company structure, the decision making was centralized. Meaning the top manager, Norio Ohga, made the decisions on his own. Ohga’s made decision to centralize the R&D efforts of Sony and to revamp them and to create three new corporate laboratories. Other decisions made while centralized was the restructuring of the electronic businesses. Ohga’s aim at restructuring the electronic businesses was to enhance the company’s focus on potential products and make the decisions process for company more reactive to the changing market environment.

Ohga’s responsibility at this point was to run all the companies activities. He wanted them to report to him as if they were reporting to the shareholders once a year at a shareholders meeting. Ohga’s role will be to then review the strategies and examine the points he feels should be questioned and then provide advice where necessary. The main goal of the new system of a centralized decision making was to ensure that the decisions been made will at the end of the day strengthen the company.

With the Unified-Dispersed Management Model this restructuring effort of a new structure was aimed at decentralizing the universal operations. The company’s headquarters gave the network companies the authority to function as an autonomous entity in their corresponding businesses. Therefore to help more functional and operational independence, the company headquarter also relocated the support functions and the R&D labs to each network company.

In order to further boost the Sony’s electronic business, the management team created Digital Network Solutions under the purview of headquarters. The role of the Digital Network Solution was to produce a network business model by mapping out the strategies and develop the necessary technologies to exploit the opportunities offered by the internet. If decision making was centralized this decision would not have been made due to the fact that it would rely on one person to decision if it should be implemented or not.

Therefore a lot of decisions were implemented while been decentralized. This was because each business unit was experiencing different problems and with decisions making been decentralized they took matters in their own hands and implemented decisions accordingly. The main reason to create a DNS was to try and develop a network base that could provide the customers with digital and financial services. This decision helped Sony reach to their customers in more than one way and it saved them time.

With Decentralization it allowed Sony to take advantage of division of labor by involving them in the decision-making process within the organization. This enables the employees to improve their performances by trying to help the company improve unproductive areas immediately without the approval of top of the organization.

How culturally diverse do you think the different Sony businesses were, for example, consumer electronics, entertainment, insurance, etc?

The “business case for diversity”, theorizes that in a global marketplace, a company that employs a diverse workforce (which includes both men and women, people of many generations, people from ethnically and racially diverse backgrounds etc.) is better able to understand the demographics of the marketplace it serves and is thus better equipped to thrive in that marketplace than a company that has a more limited range of employee demographics.

A company that supports the diversity of its workforce can help improve the employee satisfaction rate, increase productivity and retention. This portion of the business case, often referred to as inclusion, as it communicates how an organization uses its various significant diversities. For example if your workforce is diverse but you employees do not take advantage experiences they learn then the company cannot monetize the benefits of having background of diversity offered.

With Sony the three sections each experience different work place differences. This is because each person with in their sections has their own experiences and a unique group identity. An organization’s culture tends to determine the extent to which it is culturally diverse. Therefore looking at Sony consumer electronics they count two-thirds of Sony’s revenue.

The cultural difference is mainly different only based on their locations and relationships that are formed within the different groups. The Current Sony Corporation has a unique history and the culture is firmly rooted within the relationship of her founders, Masaru Ibuka and Akio Morita . Ibuka and Morita are both characterized with business talents and are devoted electrical engineers. They both gave the company their insight and their visions for the company and identified ways that the company could make operations much easier and less complicated.

Ibuka gave suggestions to the engineers involved in projects from on the transistor radios to Walkmans. This created an umbrella strategy that Sony operates under, whereby the top management gave the company a general direction and try to develop and improve the company’s vision/idea. Therefore, although there is a intended direction, the actual product development is emergent and created greater flexibility for the company.

Research and development within Sony is very different from other companies with its greater flexibility. There is also the strong position system such as the adviser and trainee relationship . All this can be classified as the culture of the company in which the strategy is formed to be a combined behavior. With a strong visions and importance human resource, one can clearly identify the mission statement policies of the managers.

What do you think the dominate corporate culture is and why?

A corporate culture is the total sum of the values, customs, traditions, and meanings that make a company unique. Corporate culture is often called “the character of an organization” , since it embodies the vision of the company’s founders. The values of a corporate culture influence the ethical standards within a corporation, as well as managerial behavior. There are four different types of Corporate Cultures namely: The Power Culture, the Role Culture, the Task Culture and the Person Culture. The Power Culture is whereby an organisation revolves around and is dominated by an individual or a small group. The Role culture is whereby an organisation relies on committees, structures, logic, rules and analysis. A small group of senior managers make the decisions. They rely on systems, procedures and rules to control the organisation. The Task Culture is whereby an organisation is geared to tackling identified projects or tasks. The teams may be multidisciplinary and adaptable to each situation. Lastly the Person Culture is whereby an individual is the central focus and any structure that exists is to serve their individual needs. This may occur when a group of people decide that it is in their own interests to join forces and share work space, equipment, administrative support etc.

Looking at the above definitions the case study shows that Sony has more of a Task Culture. This is feature of organisations which are involves extending research and development activities, in order for them to be more dynamic. Sony is continually subjected to change within the environment and therefore had to create temporary task teams in order to meet the company’s future needs. The Information and expertise are considered to be the skills that are of valued within the company.

The fact that Sony restructured their selves so many times indicates that they were diverse enough to implement changes that they thought would help the company solve their financial problems . Sony revamped their R&D activities in order to establish and conduct research and development for future oriented projects. The concept of ‘ virtual companies ’-temporary groups was also introduced by Sony and consisted of people from different divisions for lunching the hybrid products.

Sony’s restructuring of the management models were aimed at achieving three objectives namely: strengthening the electronic business, privatizing three Sony subsidiaries and strengthening the management capabilities. The restructuring also intended to enhance the shareholder’s value through the creation of Value Management . At Sony there are close connection between the departments, functions and specialties, communication and integration.

These are the ways that the organisation can foresee and adapt to the changes much more quickly. That is why Sony decided to decentralize the decision making. Influences within the team culture are based on the expertise and the up-to-date information, which is where the culture is most in tune with results. Sony was indeed a Task Culture because the staff member’s felt very motivated due to the fact that they were empowered to make some decisions within their teams, they also felt valued by the company because they may have been chosen within that team and given the duty to bring the task to a successful at the end of the day.

Sony’s management team worked as a group the entire time and each problem they faced they tried to come up with solutions that would benefit the company. Over a nine year period Sony had been restructured up to five times. Sony’s main aim was to integrate the talents by placing common goals and priorities in order to increase and be well prepared in the competitive market. Sony has the potential to be innovative with the international operations and the competitively strong because of their culture, this is because they were the first Japanese companies to set up a main branch in the United States.

Another reason why the Sony Group is A Task Culture is because it focused on the employees. Sony’s human capital was considered to be the major asses, especially the engineers in the Research & Development departments. By been the leader within the industry is a tough tasks and is crucial for the firm to remain constant with their innovation from the engineers. Sony is an international corporation, therefore they bring together a large pool of talents and they implement the best of strategies for the organization .

Case Study: Business Strategy of Sony Corporation
Case Study: Frequent Restructuring at Sony Corporation
Case Study: An Analysis of Competitive Advantages of Honda Corporation
Case Study: Sony’s Business Strategy and It’s Failure
Case Study: Turbulent History of Chrysler Corporation
Marketing Strategy of Sony Corporation
Case Study: The Collaboration Between Sony and Ericsson
Case Study: Johnson & Johnson Company Analysis
Case Study: Critical Success Factors of Dell
Case Study: Restructuring Process of Volkswagen

How to Answer Organizational Restructuring Case Questions in Management Consulting Interviews?

Learn how to ace organizational restructuring case questions in management consulting interviews with our expert tips and strategies.

Posted May 11, 2023

If you are preparing for a management consulting interview, it is important to be familiar with organizational restructuring and how to approach case questions related to this topic. In this article, we will provide you with a comprehensive guide on how to answer organizational restructuring case questions in management consulting interviews. We will cover everything from basic concepts and key terms to best practices and case studies.

Understand the basics of organizational restructuring

Organizational restructuring refers to the process of changing the way a company is organized to achieve specific goals or improve performance. This can involve changing the organizational chart, redefining job roles and responsibilities, or even merging or acquiring other companies. The main reasons for restructuring are usually to improve efficiency, reduce costs, or adapt to changes in the market.

Another important reason for organizational restructuring is to address issues related to company culture. Sometimes, a company's culture can become toxic or stagnant, hindering growth and innovation. In such cases, restructuring can help to create a more positive and dynamic work environment, by introducing new leadership, values, and practices. However, it is important to approach cultural restructuring with sensitivity and care, as it can be a challenging and emotional process for employees. Effective communication and transparency are key to ensuring that everyone understands the reasons for the changes and feels supported throughout the transition.

Key concepts you need to know before answering restructuring case questions in interviews

Before you tackle an organizational restructuring case question in an interview, it is important to be familiar with key concepts such as organizational design, strategic alignment, and change management. Organizational design refers to the process of creating a structure that aligns with a company's goals and strategy. Strategic alignment involves ensuring that all parts of the organization are working towards the same goals. Change management is the process of planning and implementing changes to the organization in a way that minimizes disruption.

In addition to these key concepts, it is also important to understand the different types of restructuring that a company may undergo. This can include downsizing, which involves reducing the size of the organization by eliminating jobs or departments, or mergers and acquisitions, which involve combining two or more companies into one. It is important to understand the potential benefits and drawbacks of each type of restructuring, as well as the potential impact on employees and stakeholders. By having a comprehensive understanding of these key concepts and types of restructuring, you will be better equipped to answer restructuring case questions in interviews.

Free trial!

From 109 top coaches

Access a library of videos, templates, and examples curated by Leland’s top coaches.

Example resumes.

Example Cases

Casing Drills

Mock Interviews

Steps to follow when answering organizational restructuring case questions

When answering organizational restructuring case questions in an interview, there are certain steps you can follow to ensure you provide a thorough and effective response. These include: understanding the problem and defining the objective, analyzing the current organizational structure, identifying areas for improvement, developing a new organizational design, and outlining a plan for implementation and change management.

In addition to these steps, it is important to consider the potential impact of the restructuring on employees and stakeholders. This includes assessing the potential for job loss, identifying opportunities for retraining and upskilling, and communicating the changes effectively to all parties involved. It is also important to consider the financial implications of the restructuring, including the cost of implementing the changes and the potential return on investment. By taking a holistic approach to organizational restructuring, you can demonstrate your ability to think strategically and consider the broader implications of your decisions.

Different types of organizational restructuring and how to approach them in interviews

There are several types of organizational restructuring, including downsizing, expansion, mergers and acquisitions, and outsourcing. Each of these requires a different approach, and it is important to be familiar with each when preparing for an interview. For example, when discussing downsizing, you might focus on identifying redundant processes or roles and creating a plan for reallocating resources.

When it comes to expansion, you might want to highlight your ability to manage growth and scale operations effectively. This could include discussing your experience with project management, budgeting, and team building. Additionally, if the company is going through a merger or acquisition, you may want to emphasize your ability to navigate change and work collaboratively with different teams and stakeholders.Outsourcing is another type of organizational restructuring that is becoming increasingly common. If the company you are interviewing with is considering outsourcing certain functions, you may want to discuss your experience with managing external vendors and contractors. This could include discussing your ability to negotiate contracts, monitor performance, and ensure that service level agreements are met. Overall, it is important to tailor your approach to the specific type of restructuring that the company is going through, and to demonstrate your ability to adapt and thrive in a changing environment.

Finally, it is important to remember that organizational restructuring can be a challenging and stressful time for employees. If you have experience with managing teams through change, this could be a valuable asset to highlight in your interview. This could include discussing your ability to communicate effectively, provide support and guidance, and maintain morale during times of uncertainty. By demonstrating your ability to lead and inspire others, you can show that you are not only capable of navigating organizational restructuring, but that you can help others do the same.

How to analyze a company's current structure and identify areas for improvement

When analyzing a company's current structure, it is important to look at factors such as the company's goals and strategy, its market position, and operational efficiency. By identifying areas for improvement, you can propose changes to the organizational structure that will better align with the company's goals and needs.

In addition to these factors, it is also important to consider the company's culture and communication channels. A company with a strong culture and effective communication can often overcome structural inefficiencies, while a company with a weak culture and poor communication may struggle even with a well-designed structure.Another key aspect to consider is the company's leadership and decision-making processes. A company with strong, decisive leadership may be able to function well with a less-than-ideal structure, while a company with weak leadership may struggle even with a well-designed structure. Therefore, it is important to assess the leadership and decision-making processes when analyzing a company's structure and identifying areas for improvement.

The role of data analysis in answering organizational restructuring case questions

Data analysis plays a key role in answering organizational restructuring case questions. By analyzing data on the company's financial performance, market trends, and employee productivity, you can identify areas for improvement and propose changes that will have the greatest impact.

In addition, data analysis can also help in predicting the potential outcomes of different restructuring scenarios. By using statistical models and simulations, you can estimate the financial and operational impact of different restructuring options, and choose the one that is most likely to achieve the desired results. This can save the company time and resources by avoiding costly trial and error approaches. Therefore, data analysis is an essential tool for any organization that wants to make informed decisions about restructuring and ensure a successful outcome.

Understanding the impact of organizational restructuring on employees, customers, and stakeholders

Organizational restructuring can have a significant impact on employees, customers, and other stakeholders. It is important to consider the potential impact of proposed changes and develop a plan for mitigating any negative effects.

In addition, it is crucial to communicate clearly and transparently with all parties involved throughout the restructuring process. This includes providing regular updates on the status of the changes, addressing any concerns or questions, and ensuring that everyone understands the reasons behind the restructuring. By maintaining open lines of communication, organizations can help to minimize confusion and uncertainty, and build trust and support among employees, customers, and stakeholders.

Best practices for presenting your solution to a restructuring case question in an interview

When presenting your solution to a restructuring case question in an interview, it is important to be clear and concise. Start by summarizing the problem and your proposed solution, then provide supporting evidence and explain the rationale behind your decision. Use visuals, such as diagrams or graphs, to help illustrate your points.

Another important aspect to consider when presenting your solution is to anticipate potential objections or questions from the interviewer. Be prepared to address any concerns they may have and provide additional information or alternative solutions if necessary. This shows that you have thought through the problem thoroughly and are able to adapt to different scenarios.

Additionally, it is important to demonstrate your ability to prioritize and make tough decisions. In a restructuring case, there may be multiple solutions that could work, but it is important to choose the one that is most feasible and has the greatest potential for success. Be prepared to explain why you chose a particular solution over others and how you arrived at that decision.

Case studies of successful organizational restructures and what can be learned from them

There are many examples of successful organizational restructures that can provide valuable insights for interviewing candidates. By studying these case studies, you can learn about innovative solutions and best practices that can be applied to different situations.

Common challenges that arise during organizational restructures and how to handle them in interviews

Organizational restructures can be complex and challenging, and there are many potential obstacles that may arise. Common challenges include resistance to change, communication breakdowns, and legal or regulatory issues. It is important to be aware of these challenges and develop strategies for addressing them.

Tips for demonstrating your problem-solving abilities during an organizational restructuring case interview

Finally, when answering organizational restructuring case questions in an interview, it is important to demonstrate your problem-solving abilities. This can be done by providing a clear and well-reasoned solution, showing an understanding of the company's goals and needs, and being able to explain the rationale behind your proposed changes.

In conclusion, answering organizational restructuring case questions in management consulting interviews requires a thorough understanding of key concepts and best practices. By following the steps outlined in this article and being familiar with different types of restructuring and potential challenges, you can demonstrate your problem-solving abilities and provide effective solutions to complex organizational problems.

Browse hundreds of expert coaches

Leland coaches have helped thousands of people achieve their goals. A dedicated mentor can make all the difference.

Browse Related Articles

June 12, 2023

How to Answer the "Why Oliver Wyman?" Interview Question

Learn how to impress your interviewer and stand out from the competition by mastering the "Why Oliver Wyman?" interview question.

January 10, 2024

How to Answer the "Why EY Parthenon?" Interview Question

Learn how to ace the "Why EY Parthenon?" interview question for this competitive firm with our comprehensive guide.

How to Answer the "Why KPMG?" Interview Question

Are you preparing for an interview with KPMG? Well, you're in the right place! In this guide, we will provide you with valuable insights, expert tips, and effective strategies to help you ace the "Why KPMG?" interview question.

May 11, 2023

How to Answer Market Entry Case Questions in Management Consulting Interviews?

Learn how to ace market entry case questions in management consulting interviews with our comprehensive guide.

How to Answer Growth Strategy Case Questions in Management Consulting Interviews?

Learn how to ace growth strategy case questions in management consulting interviews with our comprehensive guide.

March 12, 2024

How to Answer the "Why Accenture?" Interview Question

Learn how to impress your interviewer and stand out from the competition by answering the "Why Accenture?" interview question with confidence and authenticity.

How to Answer the "Why Deloitte?" Interview Question

If you're preparing for a Deloitte interview, you may be wondering how to answer the common question, "Why Deloitte?" This article provides tips and strategies for crafting a compelling response that showcases your knowledge of the company and aligns with your career goals.

How to Answer Cost Reduction Case Questions in Management Consulting Interviews?

Learn how to ace cost reduction case questions in management consulting interviews with our comprehensive guide.

How to Answer Supply Chain Optimization Case Questions in Management Consulting Interviews?

Learn how to ace supply chain optimization case questions in management consulting interviews with these expert tips and strategies.

How to Answer M&A Case Questions in Management Consulting Interviews?

Learn how to ace M&A case questions in management consulting interviews with our comprehensive guide.

May 18, 2023

Cracking the Capital One Tech Case Interview: Essential Tips

Are you preparing for a Capital One tech case interview? Look no further! Our article provides essential tips and strategies to help you crack the interview and land your dream job.

How to Answer the "Why Roland Berger?" Interview Question

Learn how to ace the "Why Roland Berger?" interview question with our expert tips and advice.

Digital Scholarship@UNLV

Submit Research
< Previous

Home > Theses and Dissertations > 1250

UNLV Theses, Dissertations, Professional Papers, and Capstones

A case study of organizational change: college restructuring in response to mandated department eliminations.

Brandy Dyan Smith , University of Nevada, Las Vegas

Degree Type

Dissertation

Degree Name

Doctor of Philosophy in Educational Leadership

Educational Leadership

First Committee Member

Mario Martinez, Chair

Second Committee Member

Vicki Rosser

Third Committee Member

Graduate faculty representative.

LeAnn Putney

Number of Pages

Faced with unprecedented budget cuts, Western University had implemented vertical cuts in the Spring of 2010 resulting in the elimination of two departments within their College of Education. Western University was not alone in its struggle. Institutions nationwide were coping with similar financial constraints, with freezes, consolidations, and eliminations becoming commonplace and threatening institutional quality.

The issue of how colleges and the leaders, groups, and individuals within them cope, process, and reorganize following eliminations has quickly gained importance, although there are few empirical studies to guide such changes. The existing literature on restructuring, particularly adaptability and change processes, has focused on the institutional and individual levels (Rubin, 1983; Eckel, 2003). A need for the development of more detailed theoretical frameworks, gaining perspectives of individuals at multiple levels, and addressing outcomes in addition to processes emerged (Astin, Keup, and Lindholm, 2002; Eckel, 2003; Lattuca, Terenzini, Harper, & Yi, 2009; Rhoades, 2000). The incorporation of the Burke-Litwin Causal Model of Organizational Performance and Change yielded perspectives of individuals at different levels as well as a detailed frame.

A qualitative, explanatory case study was employed as the method for this investigation. The unit of analysis for this case is Western University's College of Education, with embedded subunits conforming to the levels of the Burke-Litwin model. In-depth, semi-structured interviews were conducted for this study, along with observation and document analysis.

Results reveal several propositions which can be applied both theoretically and practically. Individual perceptions, of both faculty/staff and leadership, differ based on their espoused roles, impacting the concerns and focus of the reorganization, their feelings toward reorganization, and the perceived magnitude of the change. The influence of the external environment, particularly key figureheads, may unfavorably impact the perceptions of the individuals experiencing the change, thereby shifting focus away from the change process. Also, processes and actions within a change process are symbolically important and should be aligned with leaders' actions and potential solutions.

Administrative agencies — Reorganization; Change; College restructuring; Department eliminations; Education; Organizational change; Reorganization; Universities and colleges — Administration; Universities and colleges – Departments

Disciplines

Educational Administration and Supervision | Higher Education Administration

File Format

Degree grantor.

University of Nevada, Las Vegas

Repository Citation

Smith, Brandy Dyan, "A case study of organizational change: College restructuring in response to mandated department eliminations" (2011). UNLV Theses, Dissertations, Professional Papers, and Capstones . 1250. http://dx.doi.org/10.34917/2821197

IN COPYRIGHT. For more information about this rights statement, please visit http://rightsstatements.org/vocab/InC/1.0/

Since May 03, 2012

Included in

Higher Education Administration Commons

Advanced Search

Notify me via email or RSS
Collections

Privacy Copyright

Downsizing Strategies: Explained with examples and case study

A downsizing strategy refers to the planned elimination of positions or jobs in a company as part of a strategic initiative to improve efficiency, productivity, or profitability. In other words, it’s a cost-cutting measure implemented to reduce the size of a company’s workforce.

Downsizing can occur for various reasons, including:

Economic downturns: If a company is not performing well financially, it may downsize to reduce expenses and remain viable.
Technological changes: Introducing new technology can sometimes render certain jobs redundant, leading to downsizing. McKinsey & Company estimates that as many as 375 million workers globally (14 percent of the global workforce) will likely need to transition to new occupational categories and learn new skills in the event of rapid automation adoption. If their transition to new jobs is slow, unemployment could rise and dampen wage growth.
Mergers and acquisitions: When two companies merge, or one Company acquires another, job functions can often overlap, leading to downsizing.
Organizational restructuring: Companies may choose to restructure their organization to improve efficiency or to shift their strategic focus, which can lead to downsizing.
Outsourcing: Companies may decide to outsource certain functions, which can lead to the downsizing of the related departments.

Implementing a downsizing strategy is a significant decision usually accompanied by challenges and implications. These can include decreased employee morale, potential harm to the Company’s reputation, and possible legal implications related to layoffs.

Thus, companies must approach downsizing thoughtfully, compassionately, and strategically. It’s often best if done as part of a larger strategic plan for the Company rather than as a knee-jerk reaction to immediate financial pressures.

Types of Downsizing Strategies

Downsizing strategies can be categorized based on different parameters, such as the method, speed, and function of downsizing. Below are a few types of downsizing strategies:

Attrition : Attrition involves not replacing employees when they leave. This is one of the least disruptive downsizing strategies and can be particularly effective when downsizing is part of a long-term strategy. However, there may be more efficient methods if rapid downsizing is needed.
Early Retirement : Organizations incentivize older employees to retire early in this approach. The incentive usually comes in the form of enhanced retirement benefits. This strategy can be more palatable for employees, but it might result in the loss of an experienced workforce.
Termination : This is the most direct form of downsizing, where employees are laid off or fired. While this can quickly reduce costs, it can also significantly affect morale and productivity among the remaining employees.
Outsourcing : In this approach, certain functions or tasks are contracted to external organizations. This allows companies to focus on their core competencies while potentially reducing costs.
Reduction in Hours : In some cases, companies might cut costs by reducing the hours that employees work. This can be less drastic than layoffs but can still significantly impact employees’ income and morale.
Salary Reductions : This involves reducing the salaries of employees. This method can preserve jobs but may negatively impact morale and increase turnover if employees seek higher-paying jobs elsewhere.
Operational Downsizing : This strategy involves reducing the scale of operations, which can result in a workforce reduction. It might include closing branches or departments or reducing service lines.
Functional Downsizing : This type of downsizing is specific to a department or organizational function. For instance, if a company decides its marketing function is too large, it might downsize just that department.

The choice of strategy depends on the specific circumstances and goals of the organization, including its financial health, strategic direction, and the characteristics of its workforce. It’s also important to note that downsizing, regardless of the chosen strategy, often significantly affects the remaining employees.

This includes decreased morale, increased workload, and a potential decrease in productivity, so these impacts should be carefully managed.

Examples of Downsizing Strategies

Here are examples of some companies that have implemented downsizing strategies:

General Motors : In the late 2000s, General Motors underwent significant downsizing due to the global financial crisis and its subsequent bankruptcy. This involved closing several plants and laying off thousands of workers.
IBM : In the mid-1990s, IBM implemented a major downsizing strategy to cope with increasing competition and a rapidly changing tech landscape. This included significant layoffs and the selling off of certain business units.
Boeing : In response to the COVID-19 pandemic and the subsequent drastic reduction in global travel, Boeing announced in 2020 that it would cut 10% of its workforce.
Hewlett-Packard (HP) : HP has undergone several rounds of downsizing in the 2000s and 2010s, including a significant restructuring in 2012 that eliminated around 27,000 jobs.
AT&T : Following its acquisition of Time Warner, AT&T implemented a downsizing strategy that included layoffs and buyouts as it sought to integrate and streamline its new business.
British Airways : Due to the impact of the COVID-19 pandemic on the travel industry, British Airways announced in 2020 that it would need to cut up to 12,000 jobs from its workforce.
In 2023, layoffs have yet again cost tens of thousands of tech workers their jobs; this time, the workforce reductions have been driven by the biggest names in tech, like Google, Amazon, Microsoft, Yahoo, Meta, and Zoom.

In each case, the downsizing strategy was chosen in response to significant business challenges, whether economic downturn, technological change, or the impacts of a global pandemic. The specific strategies used varied, with some companies opting for layoffs, others offering early retirement packages, and some closing or selling off parts of their business.

Case Study on Downsizing Strategy

Let’s examine the case of Eastman Kodak, a company with a long history that had to implement drastic downsizing measures as it struggled to adapt to the rise of digital technology.

Eastman Kodak, often simply referred to as Kodak, was a multinational company that produced camera-related products. It was a dominant player in the photographic film market for most of the 20th century. However, the Company struggled with the rapid transition to digital photography in the late 1990s and early 2000s. Despite inventing the first digital camera, Kodak failed to embrace this new technology fully and instead continued to focus on traditional film products.

Downsizing Strategy

As the Company’s profits and market share began to decline, Kodak initiated several rounds of downsizing to cut costs. From the mid-1990s onwards, Kodak started reducing its workforce drastically. In 1988, the Company had 145,300 employees. By 2007, the number had shrunk to 24,400. The reduction was achieved through a combination of layoffs, early retirement offers, and selling off business units.

Consequences

The downsizing helped Kodak stay afloat for a time, but it wasn’t enough to compensate for the Company’s strategic missteps. Kodak’s financial condition continued to worsen, and in 2012, the Company filed for bankruptcy.

The Company emerged from bankruptcy in 2013 as a much smaller entity focused on digital imaging and printing technologies but never regained its former prominence.

The Kodak case highlights the risks of using downsizing as a standalone strategy without addressing underlying strategic issues. While downsizing can reduce costs in the short term, it can’t compensate for the failure to adapt to major industry changes. Furthermore, extensive layoffs can damage a company’s reputation and morale, making it harder to attract and retain the talent needed for a successful turnaround.

Ultimately, Kodak’s downsizing strategy could not save the Company from bankruptcy because a successful strategic shift toward the digital imaging market did not accompany it.

Here’s Why Kodak Failed: It Didn’t Ask The Right Question!

Business Performance Analysis

Demand Based Pricing: Meaning | Examples | Types

B2B2C: Meaning | Examples | Business Model | Marketing

Inventory Management Techniques

How do you design the strategy of your PowerPoint?

The Art of Persuasion: Techniques for Influencing Buying Decisions

Organizational Culture: Defining | Improving | Examples

Organizational Restructuring: Meaning | Process | Examples

Type above and press Enter to search. Press Esc to cancel.

To read this content please select one of the options below:

Please note you do not have access to teaching notes, a case study of the smes’ organizational restructuring in taiwan.

Industrial Management & Data Systems

ISSN : 0263-5577

Article publication date: 1 December 2001

Business process reengineering (BPR) has been widely applied in many enterprises. However, most cases have targeted large enterprises. In Taiwan, small and medium enterprises (SMEs), which account for at least 95 per cent of all enterprises, have played an extremely important role in Taiwan’s economic growth. The question of whether those SMEs can successfully implement BPR in order to strengthen their management structure is an important issue. Undertakes a detailed case study of an SME whose profits had fallen dramatically and which successfully implemented organizational restructuring (OR). Discovers that, although the SME in question did not make use of information technology to achieve the goal of organizational restructuring, by adopting use of BPR concepts and methods it achieved its goal of transformation. The model used for the implementation procedure of OR should provide a useful reference for other SMEs in Taiwan seeking to achieve perpetual operation, because most SMEs will eventually encounter similar problems.

Small‐ to medium‐sized enterprises
Organizational restructuring

Fu, H. , Chang, T. and Wu, M. (2001), "A case study of the SMEs’ organizational restructuring in Taiwan", Industrial Management & Data Systems , Vol. 101 No. 9, pp. 492-501. https://doi.org/10.1108/EUM0000000006282

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

SUGGESTED TOPICS
The Magazine
Newsletters
Managing Yourself
Managing Teams
Work-life Balance
The Big Idea
Data & Visuals
Reading Lists
Case Selections
HBR Learning
Topic Feeds
Account Settings
Email Preferences

An Agile Approach to Change Management

Sarah Jensen Clayton

Six lessons on moving quickly under pressure.

In the wake of Covid-19, organizations are fundamentally rethinking their product and service portfolios, reinventing their supply chains, pursuing large-scale organizational restructuring and digital transformation, and rebuilding to correct systemic racism from the ground up. Traditional change management process won’t cut it. The author borrows from agile software development processes to reinvent the change management playbook.

The business world has arguably seen more disruption in the last nine months than in the last nine years, bringing new and urgent demand for change. Initiatives are being launched by the dozen, adoption can’t happen fast enough, and the stakes are higher than ever. In the midst of a Covid-induced recession, and with some industries on the brink of extinction, change isn’t about fine-tuning — it’s existential.

Sarah Jensen Clayton is a senior partner with Korn Ferry. She works with leadership teams to define, align around, and activate enterprise and ecosystem change.

Partner Center

AI tutors are quietly changing how kids in the US study, and the leading apps are from China

Evan, a high school sophomore from Houston, was stuck on a calculus problem. He pulled up Answer AI on his iPhone, snapped a photo of the problem from his Advanced Placement math textbook, and ran it through the homework app. Within a few seconds, Answer AI had generated an answer alongside a step-by-step process of solving the problem.

A year ago, Evan would be scouring through long YouTube videos in hopes of tackling his homework challenges. He also had a private tutor, who cost $60 per hour. Now, the arrival of AI bots is posing a threat to long-established tutoring franchises such as Kumon, the 66-year-old Japanese giant that has 1,500 locations and nearly 290,000 students across the U.S .

“The tutor’s hourly cost is about the same as Answer AI’s whole year of subscription,” Evan told me. “So I stopped doing a lot of [in-person] tutoring.”

Answer AI is among a handful of popular apps that are leveraging the advent of ChatGPT and other large language models to help students with everything from writing history papers to solving physics problems. Of the top 20 education apps in the U.S. App Store, five are AI agents that help students with their school assignments, including Answer AI, according to data from Data.ai on May 21.

There is a perennial debate on the role AI should play in education. The advantages of AI tutors are obvious: They make access to after-school tutoring much more equitable. The $60-per-hour tutoring in Houston is already much more affordable than services in more affluent and academically cutthroat regions, like the Bay Area, which can be three times as expensive, Answer AI’s founder Ric Zhou told me.

Zhou, a serial entrepreneur, also suggested that AI enables more personalized teaching, which is hard to come by in a classroom of 20 students. Chatbot teachers, which can remember a student’s learning habits and never get grumpy about answering questions, can replace the private coaches that rich families hire. Myhanh, a high school junior based in Houston, said her math grades have improved from 85 to 95 within six months since using generative AI to study.

For now, AI tutors are mostly constrained to text-based interactions, but very soon, they will literally be able to speak to students in ways that optimize for each student’s learning style, whether that means a more empathetic, humorous, or creative style. OpenAI’s GPT-4o already demonstrated that an AI assistant that can generate voice responses in a range of emotive styles is within reach.

When AI doesn’t help you learn

The vision of equitable, AI-powered learning isn’t fully realized yet. Like other apps that forward API calls to LLMs, AI tutors suffer from hallucinations and can spit out wrong answers. Answer AI tries to improve its accuracy through Retrieval Augmented Generation (RAG), a method that finetunes an LLM with certain domain knowledge — in this case, a sea of problem sets. But it’s still making more mistakes than the last-generation homework apps that match user queries with an existing library of practice problems, as these apps don’t try to answer questions they don’t already know.

Some students are aware of AI’s limitations. Evan often cross-checks results from Answer AI with ChatGPT, while Myhanh uses Answer AI in an after-school study group to bounce ideas off her peers. But Evan and Myhanh are the types of self-driven students who are more likely to use AI as a learning aid, while some of their peers may handily delegate AI to do their homework without learning anything.

For now, educators aren’t sure what to do with AI. Several public school districts in the U.S. have banned access to ChatGPT on school devices, but enforcing a ban on generative AI outright becomes challenging as soon as students leave school premises.

The reality is, it’s impossible for teachers and parents to prevent kids from using AI to study, so it may be more effective to educate kids on the role of AI as an imperfect assistant that sometimes makes mistakes rather than prohibit it completely. While it’s hard to discern whether a student has learned to solve a math problem by heart based on the answer they write, AI is at least good at detecting essays generated by AI. That makes it harder for students to cheat on humanities assignments which require more original thinking and expression.

Chinese dominance

The two most popular AI helpers in the U.S., as of May, are both Chinese-owned. One-year-old Question AI is the brainchild of the founders of Zuoyebang, a popular Chinese homework app that has raised around $3 billion in equity over the past decade. Gauth, on the other hand, was launched by TikTok parent ByteDance in 2019 . Since its inception, Question AI has been downloaded six million times across Apple’s App Store and Google Play Store in the U.S., whereas its rival Gauth has amassed twice as many installs since its launch, according to data provided by market research firm SensorTower. (Both are published in the U.S. by Singaporean entities, a common tactic as Chinese tech receives growing scrutiny from the West .)

The success of Chinese homework apps is a result of their concerted effort to target the American market in recent years. In 2021, China imposed rules to clamp down on its burgeoning private tutoring sector focused on the country’s public school curriculum. Many service providers, including brick-and-mortar tutoring centers and online study apps, have since pivoted to overseas users. The U.S. is unsurprisingly their most coveted international market due to its sheer size.

The fact that tutoring apps are likely to be using similar foundational AI technologies has leveled the playing field for foreign players, which can overcome language and cultural barriers by summoning AI to study user behavior. As Eugene Wei wrote in his canonical analysis of TikTok’s global success,”[A] machine learning algorithm significantly responsive and accurate can pierce the veil of cultural ignorance.”

The reliance on the same group of LLMs also makes it hard for these study apps to differentiate solely on the quality of their answers. Some of the legacy players, like Zuoyebang and PhotoMath, can use a combination of generative AI and search in their extensive libraries of problem sets to improve accuracy. Newcomers will need to find alternative ways to set themselves apart, like enhancing user personalization features.

“An AI agent needs to proactively engage with students and tailor its answers to individual learning needs,” said Zhou. “A raw language model isn’t a ready-to-use AI agent, so we try to differentiate by fine-tuning our AI to teach more effectively. For example, our AI bot would invite students to ask follow-up questions after presenting an answer, encouraging deeper learning rather than just letting them copy the result.”

More TechCrunch

Get the industry’s biggest tech news, techcrunch daily news.

Every weekday and Sunday, you can get the best of TechCrunch’s coverage.

Startups Weekly

Startups are the core of TechCrunch, so get our best coverage delivered weekly.

TechCrunch Fintech

The latest Fintech news and analysis, delivered every Sunday.

TechCrunch Mobility

TechCrunch Mobility is your destination for transportation news and insight.

Elon Musk’s xAI raises $6B from Valor, a16z, and Sequoia

Elon Musk’s AI startup, xAI, has raised $6 billion in a new funding round, it said today, in one of the largest deals in the red-hot nascent space, as he…

Indian EV startup Zypp Electric secures backing to fund expansion to Southeast Asia

Indian startup Zypp Electric plans to use fresh investment from Japanese oil and energy conglomerate ENEOS to take its EV rental service into Southeast Asia early next year, TechCrunch has…

A venture capital firm looks back on changing norms, from board seats to backing rival startups

Last month, one of the Bay Area’s better-known early-stage venture capital firms, Uncork Capital, marked its 20th anniversary with a party in a renovated church in San Francisco’s SoMa neighborhood,…

Families of Uvalde shooting victims sue Activision and Meta

The families of victims of the shooting at Robb Elementary School in Uvalde, Texas are suing Activision and Meta, as well as gun manufacturer Daniel Defense. The families bringing the…

Y Combinator’s Garry Tan supports some AI regulation but warns against AI monopolies

Like most Silicon Valley VCs, what Garry Tan sees is opportunities for new, huge, lucrative businesses.

How Maven’s AI-run ‘serendipity network’ can make social media interesting again

Everything in society can feel geared toward optimization – whether that’s standardized testing or artificial intelligence algorithms. We’re taught to know what outcome you want to achieve, and find the…

Women in AI: Miriam Vogel stresses the need for responsible AI

Miriam Vogel, profiled as part of TechCrunch’s Women in AI series, is the CEO of the nonprofit responsible AI advocacy organization EqualAI.

What are Google’s AI Overviews good for?

Google has been taking heat for some of the inaccurate, funny, and downright weird answers that it’s been providing via AI Overviews in search. AI Overviews are the AI-generated search…

The ups and downs of investing in Europe, with VCs Saul Klein and Raluca Ragab

When it comes to the world of venture-backed startups, some issues are universal, and some are very dependent on where the startups and its backers are located. It’s something we…

Scarlett Johansson brought receipts to the OpenAI controversy

Welcome back to TechCrunch’s Week in Review — TechCrunch’s newsletter recapping the week’s biggest news. Want it in your inbox every Saturday? Sign up here. OpenAI announced this week that…

Deal Dive: Can blockchain make weather forecasts better? WeatherXM thinks so

Accurate weather forecasts are critical to industries like agriculture, and they’re also important to help prevent and mitigate harm from inclement weather events or natural disasters. But getting forecasts right…

Spyware app pcTattletale was hacked and its website defaced

pcTattletale’s website was briefly defaced and contained links containing files from the spyware maker’s servers, before going offline.

Synapse, backed by a16z, has collapsed, and 10 million consumers could be hurt

Synapse’s bankruptcy shows just how treacherous things are for the often-interdependent fintech world when one key player hits trouble.

Women in AI: Sarah Myers West says we should ask, ‘Why build AI at all?’

Sarah Myers West, profiled as part of TechCrunch’s Women in AI series, is managing director at the AI Now institute.

This Week in AI: OpenAI and publishers are partners of convenience

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

Evan, a high school sophomore from Houston, was stuck on a calculus problem. He pulled up Answer AI on his iPhone, snapped a photo of the problem from his Advanced…

AI tutors are quietly changing how kids in the US study, and the leading apps are from China

Startups Weekly: Drama at Techstars. Drama in AI. Drama everywhere.

Welcome to Startups Weekly — Haje‘s weekly recap of everything you can’t miss from the world of startups. Sign up here to get it in your inbox every Friday. Well,…

From Plaid to Figma, here are the startups that are likely — or definitely — not having IPOs this year

Last year’s investor dreams of a strong 2024 IPO pipeline have faded, if not fully disappeared, as we approach the halfway point of the year. 2024 delivered four venture-backed tech…

Feds add nine more incidents to Waymo robotaxi investigation

Federal safety regulators have discovered nine more incidents that raise questions about the safety of Waymo’s self-driving vehicles operating in Phoenix and San Francisco. The National Highway Traffic Safety Administration…

Pitch Deck Teardown: Terra One’s $7.5M Seed deck

Terra One’s pitch deck has a few wins, but also a few misses. Here’s how to fix that.

Women in AI: Chinasa T. Okolo researches AI’s impact on the Global South

Chinasa T. Okolo researches AI policy and governance in the Global South.

Disrupt 2024 early-bird tickets fly away next Friday

TechCrunch Disrupt takes place on October 28–30 in San Francisco. While the event is a few months away, the deadline to secure your early-bird tickets and save up to $800…

Big tech companies are plowing money into AI startups, which could help them dodge antitrust concerns

Another week, and another round of crazy cash injections and valuations emerged from the AI realm. DeepL, an AI language translation startup, raised $300 million on a $2 billion valuation;…

Harlem Capital is raising a $150 million fund

If raised, this new fund, the firm’s third, would be its largest to date.

US pharma giant Cencora says Americans’ health information stolen in data breach

About half a million patients have been notified so far, but the number of affected individuals is likely far higher.

Last day to vote for TC Disrupt 2024 Audience Choice program

Attention, tech enthusiasts and startup supporters! The final countdown is here: Today is the last day to cast your vote for the TechCrunch Disrupt 2024 Audience Choice program. Voting closes…

Signal’s Meredith Whittaker on the Telegram security clash and the ‘edge lords’ at OpenAI

Among other things, Whittaker is concerned about the concentration of power in the five main social media platforms.

Lucid Motors slashes 400 jobs ahead of crucial SUV launch

Lucid Motors is laying off about 400 employees, or roughly 6% of its workforce, as part of a restructuring ahead of the launch of its first electric SUV later this…

Google invests $350 million in Indian e-commerce giant Flipkart

Google is investing nearly $350 million in Flipkart, becoming the latest high-profile name to back the Walmart-owned Indian e-commerce startup. The Android-maker will also provide Flipkart with cloud offerings as…

Jio Financial unit to buy $4.32B of telecom gear from Reliance Retail

A Jio Financial unit plans to purchase customer premises equipment and telecom gear worth $4.32 billion from Reliance Retail.

IMAGES

Four Stages Of Organizational Restructuring Process
(PDF) A case study of SMEs organizational restructuring in China
Infographic: Organizational Restructuring
Innovative application of knowledge management in organizational
(PDF) Communicating Change in Organizational Restructuring: A Grounded
(PDF) The strategic context of organisational restructuring

VIDEO

ORGANIZATIONAL BEHAVIOUR CASE STUDY 1
Case Study: Organisational Restructuring
CASE STUDY OF ORGANIZATIONAL BEHAVIOR (ISSUES IN COMPANY)
ORGANIZATIONAL CASE STUDY
Describe your strategy for handling a large-scale organizational restructuring or downsizing
Webinar

COMMENTS

PDF A CASE STUDY OF SUCCESSFUL ORGANIZATIONAL RESTRUCTURING
A CASE STUDY OF SUCCESSFUL ORGANIZATIONAL RESTRUCTURING 7 pays for services. By 2020, the New York State Department of Health anticipates that Medicaid funding will be conducted through managed care that integrates primary health care with mental health and substance abuse services under one roof. Payment will be value-based and tied to outcomes.
Organizational restructuring
Norman H. Martin. John Howard Sims. Beneath the general principles, attitudes, and ideals of "human relations" lie the actual tactics and day-to-day techniques by which executives achieve ...
PDF A case for restructuring before spin-off
A. case for restructuring Exhibit 1 of 1. Because before the spin-o process is so daunting, managers are often reluctant to make improvements to business units or other assets ahead of spin-off. Better to wait until the deal closes, they think, and then focus on making any big changes. Our research suggests just the opposite is true: companies ...
Organizational transformation
Norman H. Martin. John Howard Sims. Beneath the general principles, attitudes, and ideals of "human relations" lie the actual tactics and day-to-day techniques by which executives achieve ...
Organizational Restructuring: 7 Strategies for HR (+ Free Template
Grupo Argos - Case Study Creating a data-driven HR organization through effective upskilling. ... Organizational restructuring is a strategic process aimed at enhancing efficiency, adapting to new market demands, or improving competitiveness. It can significantly alter a company's structure, strategy, and operations. ...
Organizational restructuring case example
5. Leverage change as an opportunity for organizational innovation. Organizational restructuring work is often done in times of crisis. But crises always entail opportunities. In the case example, the company's HR team had an ongoing workstream on the future of work. One important initiative was to increase the levels of self-management in ...
Organizational restructuring
Beneath the general principles, attitudes, and ideals of "human relations" lie the actual tactics and day-to-day techniques by which executives achieve, maintain, and exercise power.
Retail Organization Retstructuring Case Study
In 2013, Staples announced a massive organization restructuring of its European operations, launching what was possibly the largest transformation endeavor in their industry. The changes involved were tremendous in scope and difficulty, including large-scale layoffs and significant revisions of roles and responsibilities.
Getting organizational redesign right
A successful organizational redesign should better focus the resources of a company on its strategic priorities and other growth areas, reduce costs, and improve decision making and accountability. The case of a consumer-packaged-goods (CPG) company that chose to expand outside its US home base illustrates one typical motivation for a redesign.
A Complete Guide to Organizational Restructuring
4. Employees are Being Over or Underworked. Sometimes overlooked, especially if the overall financial performance is good, employee efficiency gains can be a great restructuring opportunity. Again here, data is key, so start with a benchmarking exercise to look at how much people are really working and what they're working on.
Organizational Restructuring
Balogun and Johnson reported a case study of organizational restructuring in an electric utility, and provided evidence of the same cognitive bifurcation to which McKinley and Scherer referred. While senior managers at the executive level provided a broad framework for the restructuring, middle managers were left to sort out the messy details ...
Case Study: Successful Organizational Restructuring Led by Interim
In the dynamic landscape of modern business, organizational restructuring is a vital strategy for survival and growth. This article delves into the critical role of interim executives in spearheading successful restructuring efforts, drawing upon a variety of real-world case studies. The Pivotal Role of Interim Executives
Case Study: Successful Organizational Restructuring Led by ...
The case studies examined earlier provide valuable insights. To further enhance the effectiveness of interim managers in these roles, several key strategies and lessons can be drawn. 1. Embrace ...
Organizational Restructuring Process & Templates to Help Plan
Pingboard can help with all of these steps during your restructuring process: Build multiple versions of your potential organizational structures. Share these org charts with specific people for collaboration. Search through your organization to find people with specific skills and experience to fill new roles.
Change Management for Organizational Restructuring
Organizational restructuring is an integral part of organizational change, and it's important for managers to stay on top of the latest techniques in order to achieve optimal efficiency. ... 10 Successful Rebranding Case Studies & Lessons Learnt. We have listed some most successful rebranding case … KFC Crisis Management Case Study ...
Case Study: A Critical Analysis of Restructurings by Sony Corporation
Case Study: A Critical Analysis of Restructurings by Sony Corporation. September 15, 2012 Abey Francis. Restructuring is considered to be the corporate management term of reorganizing an organisations ownership, operations, legal and other structures within in order to make the company more profitable and more organized with its needs to be ...
The Missing Ingredient in Kraft Heinz's Restructuring
But sometimes this recipe doesn't work — and the story of Kraft Heinz is a prime example. Earlier this year, the company suffered a massive loss in less than 24 hours — $4.3 billion, to be ...
How to Answer Organizational Restructuring Case Questions in Management
Table of Contents Understand the basics of organizational restructuring Key concepts you need to know before answering restructuring case questions in interviews Steps to follow when answering organizational restructuring case questions Top mistakes to avoid when answering organizational restructuring case questions Different types of organizational restructuring and how to approach them in ...
A case study of organizational change: College restructuring in
The existing literature on restructuring, particularly adaptability and change processes, has focused on the institutional and individual levels (Rubin, 1983; Eckel, 2003). ... Brandy Dyan, "A case study of organizational change: College restructuring in response to mandated department eliminations" (2011). UNLV Theses, Dissertations ...
Downsizing Strategies: Explained with examples and case study
Organizational restructuring: Companies may choose to restructure their organization to improve efficiency or to shift their strategic focus, which can lead to downsizing. Outsourcing: Companies may decide to outsource certain functions, which can lead to the downsizing of the related departments. ... Case Study on Downsizing Strategy. Let's ...
A case study of the SMEs' organizational restructuring in Taiwan
Undertakes a detailed case study of an SME whose profits had fallen dramatically and which successfully implemented organizational restructuring (OR). Discovers that, although the SME in question did not make use of information technology to achieve the goal of organizational restructuring, by adopting use of BPR concepts and methods it ...
An Agile Approach to Change Management
In the wake of Covid-19, organizations are fundamentally rethinking their product and service portfolios, reinventing their supply chains, pursuing large-scale organizational restructuring and ...
Restructuring, Redeployment and Job Churning within Internal Labour
A longitudinal case study collected data over an 18 month fieldwork period (2013-2015), which covered the implementation of two major restructuring events. In 2011 SteelCo announced 1200 redundancies, followed in 2013 by the announcement of a further 500 job cuts.
AI tutors are quietly changing how kids in the US study, and the
Some students are aware of AI's limitations. Evan often cross-checks results from Answer AI with ChatGPT, while Myhanh uses Answer AI in an after-school study group to bounce ideas off her peers.