The effects of organizational restructuring on the performance of business organizations

Abstract

This research aimed at studying the effects of organizational restructuring and the performance of business organizations in Kampala District: the case study being Bank of Uganda. The problem the research endeavored to solve was the gap on how managers should carry out restructuring in the organization the fact that many managers focus on cutting costs but not taking into consideration on who should leave or stay ending up losing the best employees which in turn makes the organization not to perform as expected even after the restructuring. The objectives of the study were: to examine the relationship between employee retrenchment and the performance of business organizations; analyze the relationship between redesigning jobs and the performance of business organizations; access the relationship between retraining employees and the performance of business organizations. The study involved 72 respondents including managers and employees of the organization and data was collected from the field through use of a questionnaire that contained both qualitative and quantitative questions. Qualitative data was analyzed by the Microsoft excels software and presented using pie charts( percentages) while the quantitative data as analyzed by the help of the statistical package for social sciences (SPSS) was transformed into tables (frequency and percentages) together with a summary of findings presented with mean and standard deviation Throughout the study, I found out that restructuring has a positive effect on the performance of business organizations. Economic conditions and technological advancement are the most aspects that lead to retrenchment and redesigning in the organization respectively and most employees are retrained so as to improve their abilities and to be more competitive in order to increase the organizations productivity. The most retrenchment strategy used by the organization is the turnaround strategy. Conclusions from the findings are: restructuring improves performance of business organizations though employees who are being retrenched leave the organization with a lot of intimate knowledge and even those who remain become disappointed especially when performance of the organization does not improve. Employees, who undergo retraining become competitive, develop their abilities hence increasing organizations productivity. The study recommends that senior managers should make employees aware of the retrenchment process to take place before even being carried out in the organization and also ensure that the restructuring process improves performance so as to avoid disappointments among employees. Employees should be educated on the importance of retraining to evade fear for retraining among employees.