1. Restructuring, Layoff & Flatter Organization
Downsizing

2. DOWNSIZING
A set of organizational activities undertaken by the management, designed to improve organizational efficiency, productivity, and/or competitiveness

3. Reason for Downsizing Changing market conditions
Mergers and acquisitions
To make daily operations of a business more efficient
Closure of business unit
Overstaffing
Reduce costs
Unprecedented disaster

4. Contd… Release least productive resources
Organization decline caused by loss of revenue and market share and by technological and industrial change
New organizational structures
Rightsize resources in relation to market demand

5. Effect of Downsizing on Organization
Effect on survivors
Survivor Syndrome
Survivor Guilt
Survivor Envy
Effect on implementers
Effect on organization

6. Restructuring
Restructuring is the corporate management term for the act of partially dismantling or otherwise reorganizing a company for the purpose of making it more efficient and therefore more profitable. It generally involves selling off portions of the company and making severe staff reductions.

7. Symptoms indicating need for Restructuring
New skills and capabilities are needed to meet current or expected operational requirements
Accountability for results are not clearly communicated and measurable resulting in subjective and biased performance appraisals
Parts of the organization are significantly over or under staffed
Organizational communications are inconsistent, fragmented, and inefficient
Technology and/or innovation are creating changes in workflow and production processes
Significant staffing increases or decreases are contemplated
Personnel retention and turnover is a significant problem
Workforce productivity is stagnant or deteriorating
Morale is deteriorating

8. Expected Results Improved productivity and morale
Reduced personnel turnover
Increased organizational effectiveness and efficiency

9. Types of Organizational Structures
Functional Organization
Divisional Organization
Matrix Organization
Process Based Organization

10. Functional Organization Structure

11. Advantages Disadvantages Promotes skill specialization
Reduces duplication of scarce resources and uses resources full time
Enhances career development for specialists within large departments
Facilitates communication and performance because superiors share expertise with their subordinates
Exposes specialists to others within same specialty
Emphasizes routine tasks; encourages short time horizons
Fosters parochial perspectives by managers and limits capacity for top-management positions
Multiplies interdepartmental dependencies; increases coordination and scheduling difficulties
Obscures accountability for overall results

12. Divisional Organization Structure

13. Advantages Disadvantages
Recognizes interdepartmental interdependencies
Fosters an orientation toward overall outcomes and clients
Allows diversification and expansion of skills/training
Ensures accountability by departmental managers and promotes delegation
Heightens departmental cohesion and involvement in work
May use skills and resource inefficiently
Limits career advancement by specialists
Impedes specialists’ exposure to others within same specialties
Puts multiple-role demands upon people and creates stress
May promote departmental objectives as opposed to overall organizational goals

14. Matrix Organization Structure

15. Advantages Disadvantages
Makes specialized, functional knowledge available to all projects
Use people flexibly
Maintains consistency by forcing communication between managers
Recognizes and provides mechanisms for dealing with legitimate, multiple sources of power
Can adapt to environmental changes
Can be difficult to implement
Increases role ambiguity, stress, and anxiety
Performance is lowered without power balancing between projects and functions
Makes inconsistent demands and can promote conflict and short-term crisis orientation
May reward political skills over technical skills

16. Process Based Structure

17. Advantages Disadvantages Focuses resources on customer satisfaction
Improves speed and efficiency
Adapts to environmental change rapidly
Reduces boundaries between departments
Increases ability to see total work flow
Enhances employee involvement
Lowers costs dues to overhead
Can threaten middle managers and staff specialists
Requires changes in command-and-control mindsets
Duplicates scarce resources
Requires new skills and knowledge to manage lateral relationships and teams
May take longer to make decisions in teams
Can be ineffective if wrong processes are identified

19. Layoff
Layoff is the temporary suspension or permanent termination of employment of an employee or (more commonly) a group of employees for business reasons, such as the decision that certain positions are no longer necessary or a business slow-down or interruption in work

20. Causes of Layoff Worker Characteristics Job Characteristics
Performance
Tenure
Education
Organizational Change Characteristics
Announced Layoffs
Upcoming Merger
Organizational Restructuring
Job Characteristics
Contingent vs. Permanent
Part-time vs. Full-time
Union vs. Non-Union
Organizational Technology
Changing Technology
Proximity of Job to Core Technology

21. Effects of Layoff on Employee
Loss of wages and benefits
Loss of role as worker and provider
Loss of dignity and self esteem
Loss of trust
Loss of control over life
Loss of the pattern of daily life

23. Retrenchment
Retrenchment means any termination which is not a disciplinary action inflicted on a workmen or VRS or retirement or superannuation or ending of a fixed term contract or termination of service due to continued ill health.

24. Difference between Retrenchment and Layoff
Lay off means failure, refusal or inability of employer due to shortage of raw material, coal, power, breakdown of machinery etc to provide employment. Termination means Dismissal, Retrenchment or Completion of a contract or Non Renewal of Contract etc. Termination is not always negative. All these activities are termed as termination.

25. Flat Organization
Flat organization (also known as horizontal organization) refers to an organizational structure with few or no levels of intervening management between staff and managers

26. Features of Flat Organization
Few or no Intervening Managers
Minimizes Bureaucracy
Empowering employees to take decisions
Better Communication flow between upper managers and baseline employees
Works best with small sized organizations

27. Benefits of Flat Organizations
Increases productivity
Middle manager salaries are eliminated
Base line employees get showcased
Faster Decisions taken
Better work culture

28. Quantity and Quality Quantity Quality Cost Factor Demand Profit Center
Cost Center

29. Role of HR in Downsizing
Proper Manpower planning should be done
HR should be involved in the planning stage of Downsizing
Make provisions for a smooth exit of the employee
HR should reassess employees for training programs
Proper communication is necessary
Re energizing employees