Workplace Re-Organization and Its Effects 'Literature Review' chapter

Excerpt from 'Literature Review' chapter :

In the incipient stages, change causes reticence and this reticence is mostly obvious in the case of the more mature group of employees. While the younger staff members are more opened to change and will embrace it as a new career opportunity, the older population is simply looking to perform its current tasks into retirement. When reticence occurs among the younger population, it can be reduced through change management programs. The reticence of the more mature population cannot however be reduced as it a deep rooted within the individuals.

A second impact, obvious at the level of all employee groups, is that of strain creation. Fedir and Herold argue that organizational change creates two sets of strains. The first set is given by the possibility for the change to modify the job specifics. In other words, the employee is worried that modifications would be incurred in the way in which he/she conducts his daily work responsibilities. The second set of strains is created by the poor management of the change. In other words, employees accept the fact the organizational change would materialize in several impacts on their jobs. Yet, they need to feel a certain degree of security and this is given by an adequate managerial act. When the managerial team is unable to adequately manage the modifications brought about by the implemented change, the employees' emotional well-being would be negatively affected.

At the third level, the study by Donald B. Fedor and David M. Herold assesses the impact of change from the standpoint of the multitude of modifications it would imply. The two authors find that employees are more accepting of a minimal change which improves their working conditions. In such an instance, their loyalty to the firm increases. Vice versa, when a major modification occurs, the loyalty of the employees towards the employer decreases, even if the employees ultimately accept the change. "Somewhat ironically, while the participating employees reported reasonable acceptance of the change being implemented, they also seemed to become less committed to the organization. Moreover, the highest commitment occurred when the change was seen as good for the work unit, there as a lot of change at the work unit level, but little direct job impact. Ergo, employees like lots of beneficial change that also leaves them relatively untouched. In contrast, the greatest decrease in organizational commitment was reported when a somewhat minor change was seen as good for the work unit, but the personal job impact was high" (Fedor and Herold).

Wilfred J. Zerbe, Charmine E.J. Hartel and Lea M. Ashkanasy (2008) strongly believe that organizational change has a significantly strong negative impact of the emotional welfare of the employees. This belief is constructed on the fact that change is a primer generator of stress for both managers as well as employees. They base their conclusions on several previous studies which detailed on particular aspects of specific organizational changes, such as downsizing (Brockner, 1998 and Torkelson and Muhonen, 2003), job redesign (Mak and Muller, 2001) or mergers (Buono and Bowditch, 1989). All these studies indicated that organizational change has a negative connotation among employees, whose emotional well-being is affected to a deep level. The stress associated with the change would then take a negative toll on the employee's family life and on his mental and physical health. In the very words of the authors: "collectively, this research demonstrates that organizational change causes chronic occupational stress hat has carry-over effects on family functioning, psychological health, physical health, job satisfaction, organizational commitment, and loyalty. There are several social, cognitive and psychological consequences of organizational change that have a negative impact upon employees' affective well-being" (Zerbe, Hartel and Ashkanasy).

In spite of these findings, the three authors mention that the negative impact would only be felt in the short-term. In the long-term however, the company manages to integrate the modifications and become more competitive. This in turn leads to beneficial impacts for the staff members, such as reduced workloads, increased salaries or an increased job security.

In terms of the specific change of organizational restructuring, the three authors mention that the process follows in the same footsteps as any change process and generates a series of negative implications upon the emotional well-being of the staff members. "Organizational restructuring is associated with decreased job security, role conflict, ambiguity and uncertainty and decreased social support as work teams are redistributed" (Zerbe, Hartel and Ashkanasy, 2008).

The specific aspect of organizational change as organizational restructuring is less discussed than the actual change process, meaning as such that the specialized literature on the impact of organizational restructuring on employee well-being is limited. Yet, there are some sources which discuss the topic. Grace Lee and Albert Teo (2010) for instance look at the impacts from two standpoints -- the trust of the staff members on the job satisfaction. The findings indicate that organizational restructuring generally impacts these two elements in a negative manner as the employees' on the job satisfaction and their trust in the employer decreases with the implementation of change. Still, the authors conclude that these negative impacts can be counteracted with an adequate change management program.

Paul M. Hirsh and Michaela De Soucey (2006) come to a similar conclusion. They recognize the necessity of contemporaneous organizations to implement change in order to survive in the incrementally competitive business environment, but argue that organizational managers are not always aware of the full extent of the impacts of organizational restructuring. From their standpoint, restructuring is implemented when other organizational and external approaches have failed. They as such generate stress and a negative impact on the employees' well-being. "The language of restructuring is regularly used to mask, reframe, and sugarcoat economic slumps as possessing positive social outcomes" (Hirsh and de Soucey). The authors end their study by revealing some topics for future study, such as the impact of restructuring on organizational culture.

All in all, the approach taken by Hirsh and Soucey is consistent throughout the entire literature, which identifies the need for change, and its particular restructuring component, but which also argues that not all managers have comprehended the dimensions and implications of restructuring. On the short-term, the process generates tremendous negative impacts associated primarily with the stress of change. On the long-term however, the process can lead to significant positive outcomes. The editors at the Universal Teacher Publications mention the following benefits of organizational restructuring:

Decreased operational costs

Better trained staff members

Improved organizational culture

The creation of a new and more equitable employee payment structure

The creation of more adequate human resource policies (Universal Teacher Publications).


Barnett, W.P., Carroll, G.R., 1995, Modeling Internal Organizational Change, Annual Review of Sociology

Dawson, P., 2003, Understanding Organizational Change: The Contemporary Experience of People at Work, SAGE

Eric, P., 2008, Definition of Organizational Change, Associated Content, last accessed on June 3, 2010

Fedor, D.B., Herold, D.M., Effects of Change Management on Employee Responses: An Overview of Results from Multiple Studies, CPBIS, last accessed on June 3, 2010

Hamlin, B., Keep, J., Ash, K., Organizational Change and Development: A Reflective Guide for Managers, Trainers and Developers, Pearson Education

Hirsch, P.M., De Soucey, M., 2006, Organizational Restructuring and its Consequences: Rhetorical and Structural, Annual Review of Sociology, Vol. 32

Kaur, G., a Study of Organizational Change and its Impacts on Employee Job Satisfaction and Customer Satisfaction in a Few…

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