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Impact of Organization Restructuring on Motivation


Organizational restructuring may bring positive or negative impacts on the motivation of the members of the organization. Although changes of an organization may achieve cohesion among the members and increased morale due to a change in the culture, it may bring changes that are uncertain, and thus result in affecting the socio-psychological well-being of the members of the organization (Lee & Teo, 2005). Change may further complicate issues because it may require the organization to understand the specific needs of individuals in the organization, their behaviors and how they respond to new environment and systems.

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Reasons for restructuring

Organization restructuring may be as a result of a number of things, namely, need to densely connect the workforce and break the barriers existing between the units or the various departments of an organization (Stevenson, Bartunek, & Borgatti, 2003) and have the groups within the organizations work together more effectively (Connolly, 2000; qtd. in Stevenson, Bartunek, & Borgatti, 2003), need to adapt to demands of increasing global markets and realizing increased efficiency (Hirsch & Soucey, 2006), need to correct previously adopted systems and cultures and traditions, aligning the organization to its goals and objectives it is expected to achieve, improving in management and administration, and structural changes that have to do with adoption of new systems and equipments or approaches to work as well as maintaining success and creating competitive edge in complex organizations (Worral, Cooper & Campbell-Jamison, 2000).

Impacts of restructuring

In a one of the studies carried out on the subject of organizational restructuring, it was found that survivors were not able to assume new roles without relevant training and increased workload (Tombaugh and White, 1990; qtd. in Worral, Cooper & Campbell-Jamison, 2000). In effect, job security, satisfaction, job involvement and loyalty, were found to be strongly influenced by organization changes (Reilly et al. 1993). Elsewhere, dramatic changes in the North American, European and U.K workplace has caused working environments which are less stable and less secure in terms of job security, which have been the causes of social problems (Cooper, 1999). Social problems for example arise when restructuring cause distractions of working partners such as requirement for managers to work for more time (in an attempt to minimize cost by having less worker or maximizing the available workforce), and negatively influencing their relationship with family, among other things. This may negatively influence the motivation.

Organization restructuring may affect the organization’s culture, the missions and goals, the life cycle of an organization-the future and the present systems-and the incentive system (International Development Research Centre). These among others encompass the motivational elements of the workforce and the organization as a whole.

The stage of reorganization is also essential. At new or young stages, organizations believe that everything is possible and limitations may appear not to exist. The prevailing experimental atmosphere partly drives the motivation in these organizations and restructuring may not be descriptive because at these stages, the organizations are rarely guided by any established rules and procedures. In addition, few policy manuals exist and there might be unique patterns of behavior among the members of the organization. Normally, restructuring at this stage may be rare. However, rules, policies, regulations and procedures, and new responsibilities emerge as these organizations mature, and such restructuring may cause emergency of new motivational elements and patterns. At the growing stage, the type of rules, regulations, responsibilities, job schedules, values, missions, procedures among other things, may affect the organizational motivation in a positive or negative direction. In establishing these rules and regulations, procedures, policies, company objectives and missions, the organization should promote the employees as important part of an organization and seek to promote them through adding more responsibilities, rewarding their contributions, and empowering them through awarding to them studying opportunities among other benefits.

Motivation in an organization is partly influenced by the goals, mission, objectives and the roles of an organization. In other words, what the organization seeks to achieve and accomplish is a motivator of the members of an organization. For example, some organizations are motivated by the desire for prestige or be regarded as the best in the field, e.g. the research organizations, bigger market shares, e.g. in the private sector and the desire to serve and do good works, e.g. the non-governmental organization. Organizational restructuring that focuses on changing the goals, missions and roles of an organization, may influence the motivation of the members that are already working in the organization if they were already committed to achieving them.

Every established organization carries its established culture. Organizational culture refers to the formal or informal collectively accepted practices, values, behaviors, believes and other aspects of the organization. The organizational culture helps the organization to achieve its goals and missions and at the same time gives life to it. Organization culture has been associated with improved morale and high rates of return on investment, increased productivity (Ouchi, 1981) and superior corporate performance (Peter and Waterman, 1988). The organization culture is one of the reasons why it would be difficult for an organization to change, and if the organization is restructured, it would involve change of the culture. Therefore, restructuring of an organization can influence its culture. Organizational culture has influence on the motivation of people, and therefore its change can influence motivation. The culture of an organization can be assessed through four aspects (Bloor and Dawson, 1994; qtd. in International Development Research Centre), namely; the organization’s values-ideals and the concepts of quality, integrity, honesty and standards, which are held by an organization; the basic assumptions or what members considers best behavior for them and others; the perspectives held and used for proper action, for example perspective on how the organization deals with the customer complains; and the artifacts, which are the outward manifestations such as the dress, language, logo, rituals and others.

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The incentive system refers to the way the organization rewards and punishes the staff and the reason for the staff for joining the organization. The incentive system can affect the motivation of individuals by encouraging or discouraging them, as well as influencing the work group behavior according to Allcorn (1995). According to Brudney and Condrey (1993), a good incentive system may be necessary in stimulating innovation, fostering loyalty among the most productive people as well as encouraging productivity and creativity among people. Incentives do not only involve money, but money is part. An incentive system must reward the efforts of individuals, but care must be taken to make sure that this does not negatively impact on group work or teamwork which is essential to meeting the organization’s goals. In this light, the organization restructuring may change the reward system primarily focusing on reward of individual work than the team work may want to shift in favor of the latter, or vice versa. However, the organization must focus on implementing the changes that establishes reward systems for both. Incentives may differ from one another from one organization to the other, just the organizations are different. Private organizations have a tendency to offer financial incentives because of their capability to make more profits as compared to non-profit and governmental organizations. Because incentives options exists, for example bonuses for reached productivity targets, stock option plans and other monetary offers in the private sector, restructuring of organizations may or may not focus on incentives arrangements which in general favor team work or those that are truly reachable and therefore may make the members of an organization motivated to reach the new targets or expectations or otherwise. Organizations may therefore need to focus on the best type of incentive to apply before restructuring. Other incentive plans include employees working for lower-than-the-market rates for an exchange of ownership with shares in the organization. The need for an analysis arises because some incentives may appear attractive on the side of the organization, but may not motivate the employees because they may not buy out their values or traditions; they may involve sharing of losses; or may not be reachable on an average. It has been found that the company equipment, working environment and new technological or information systems and rules governing their usage, could also act as negative or positive incentives to the employees. For example some items featured in a query for researchers on the type of incentives that would increase their motivation included availability of internet connection for charting with other researchers on specific topics, subscription to major publications in their fields and access to better research materials. The relationship between restructuring of an organization and these aspects include the willingness of the new management or structures to establish and improve the working conditions, acquire proper and efficient job equipments, and revolutionize the organization through innovations that make members feel special or valued, among other things. Restructuring of an organization may again, by aiming to reduce costs or increase profits, eliminate elements that motivate individuals to work and this would negatively affect the organization. Other incentives that can be focused on restructuring involves praising people for best performance, increasing their range to test competence levels or range, and introducing opportunities for advancement of education or learning (International Development Research Centre).

Restructuring must also focus on the intrinsic factors that affect motivation of individuals such as security and values of people. Values include the desire of the employees to serve and therefore finding work in the non-governmental organizations or public service, while security may involve individuals’ proneness to termination of employment or leadership and the resulting benefits or penalties. Some organizations like the church-based ones may focus on individual’s service orientation incentives. It is therefore important that the organization considers the type of incentives it is favored to incline to even before restructuring or after restructuring. The private sector for example, is free to choose a range of incentives, but not all may result in proper motivation of employees, and that management of an incentive system is more than merely choice of it. The public organizations may have limitation on the management of the incentive system because it may be centralized, and monetary incentives may be a limited option, because some of them focus on providing important services and goods to people more than making profits. The non-profit making organization may be limited in choosing the option of monetary incentives but may choose recognition of excellent results, attachment to service and adding more responsibilities to employees, improving working conditions and investing in efficient systems as incentives. It is important that restructuring will focus on developing the appropriate incentive arrangement. Repeated or single restructuring may cause job uncertainties which may influence the psychological reaction of the workers thus can reduce motivation (Witte, Vandoorne, Verlinden, & Cuyper, 2005). In addition, the “wait and see” attitude may influence performance among other things (Witte, Vandoorne, Verlinden, & Cuyper, 2005)


Restructuring of an organization may be meant to bring positive effects and may be costly. However, the final results on the motivation of employees may affect production as well as the overall performance. It is therefore necessary to better understand the consequences of restructuring and analyze the possible impacts on the working environment and the overall side effects it brings in. managers need analyze the situation with a pre-knowledge on the possible results relating to the company values, perspectives, artifacts and the basic assumptions. Because new managers may be interested in quick changes in order to make sure that the poor performing organizations improve, it is essential that they understand the underlying problems and how they relate to motivational elements of an organization and make sure that the change to be incorporated encompasses positive elements of motivation.

Hirsch & Soucey (2006) who consider restructuring as important in the American’s export of managerial ideology to transnational context recommend a further examination to the impacts of restructuring on the culture of business in national contexts.

To ensure that the restructuring of an organization does not deteriorate the motivation of the employees which may negatively influence production or result in poor performance, the managers need understand what roles organizations play in the society, their missions and the goals they seek to accomplish and thus align the appropriate motivational elements with the occurring changes or restructuring. In addition, the organization should seek to establish motivational elements that seek to reward the individual as well as the group or team. The organization need adopt diverse ways of incentives so that it will encompass a wide range of individual interests. This is because various individuals may have different tastes on incentives. Public or governmental organizations need concentrate on those incentives which will seek to improve the working conditions and job responsibilities since some may be limited financially. Private ones can choose from a wide range, whereas the non-profit need invest in incentives focusing on individual’s attachment to roles of the organization and being proud in achieving them.

During restructuring to align to economic, political or any other needs, the organization need considering that all the sectors of the organizations may be affected. Therefore, reorganization in any sector needs to seek to connect to the other sectors to encourage team work. The internal factors such as job security, individual values and traditions need be incorporated in the new organization to ensure that individuals are motivated to feel part of the organization. The organizations’ rules, regulations, mission, objectives, procedures and processes need be seen as promoting the employees to new heights as well as valuing them as important to the organization.


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