What are the disadvantages of restructuring of the organization?

Answer 1

Organizational restructuring efforts have a weak negative effect on job performance. They have a more significant negative effect on organizational commitment, because employees tend to feel less emotional attachment to organizations that are restructuring. To reduce the negative effects of restructuring, organizations should focus on managing the stress levels of the employees who remain after the restructuring. Give employees a sense of control to help them learn to navigate their new work environment.

Employees panic about their job security and start looking for other work making them less focus on their actual work. Organizations should have a sense of transparency that allow employees to have some kind of idea about what's going to happen, this will put them at ease.

Investors fear that they will lose money and that stock prices may drop. Keeping investors informed about the specifics regarding the restructure will reduce their concerns.

Restructuring may lead to the downsizing of the workforce, meaning that the organization needs to decide on employees it will keep and let go. This means that the organization loses experience, skills and knowledge about the company's operations. The organization needs to prioritize staffing and facility needs to assist with handling and coping with those losses.

With restructuring, the organizations public image may shift. Increase in public scrutiny will take place especially if the amount of employees decreases. To keep the organizations public image under control when undergoing restructuring, a public relations consultant should be hired to do so.