Decisions about restructuring usually depend on models that show how different approaches might affect the enterprise, by projecting the values of organizational attributes such as net income, market share, or shareholder value. Although these projections rarely include attributes like employee anxiety or fear, such factors are truly important. They help to determine productivity, voluntary turnover, the workload of the people in Human Resources, and many of the attributes that the experts do model, albeit indirectly.
Most important, restructuring-induced fear can create a need for future restructuring, through a variety of paths, some of which are subtle and rarely identified. Here's Part I of an exploration of some of the less obvious mechanisms by which restructuring-induced fear creates a need for future restructuring. Refer to the accompanying diagram of effects [Weinberg 1989], which displays these dynamics graphically.
- Degraded and disrupted relationships
- When we relocate people, eliminate positions, or merely change reporting structures, we disrupt relationships between people. Those who formerly relied on each other for advice, instruction, or services must sometimes find new contacts. Even the relationships that aren't totally eliminated can be degraded by restructuring-induced fear, in the form of competitive attitudes that can take hold when people come to believe that further restructuring is possible, and that everyone is in competition for a declining number of jobs.
- Although relationships between and among employees are valuable organizational assets, the value of these assets doesn't appear on financial statements. Unaware of the amount of these assets lost to restructuring, the depressive effects on results seem surprising to planners. The unexpectedly disappointing results can sometimes lead to further restructuring.
- Risk aversion
- When people believe that their When people believe that
their jobs are at risk,
their appetite for risk
in general declinesjobs are at risk, their appetite for risk in general declines. In effect, some people have difficulty keeping separate their own personal risk profile and the risk profile associated with their job responsibilities. This can affect the necessarily subjective judgments people make as part of their responsibilities, which creates a risk aversive approach to operating the enterprise. - After experiencing several serial restructuring events, people in organizations that formerly had a healthy approach to risk can find themselves being overly conservative in their strategies and tactics, because they have begun to confuse their own personal risk experience with the risk experience of the organization. In this way, the organization can become so risk averse that it is no longer capable of accepting the levels of well-managed risk that are so necessary in today's market environments. These organizations then find that they can innovate only by acquiring innovative organizations, which is an expensive method for attaining market leadership. The resulting high costs and low yields sometimes lead to further need for restructuring.
Next time we'll explore three more pathways by which restructuring-induced fear leads to restructuring addiction. Next in this series Top Next Issue
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Related articles
More articles on Emotions at Work:
- Responding to Threats: I
- Threats are one form of communication common to many organizational cultures, especially as pressure
mounts. Understanding the varieties of threats can be helpful in determining a response that fits for you.
- Responding to Threats: II
- When an exchange between individuals, or between an individual and a group, goes wrong, threats often
are either the cause or part of the results. If we know how to deal with threats — and how to
avoid and prevent them — we can help keep communications creative and constructive.
- Favors, Payback, and Thoughtlessness
- Someone at work who isn't particularly a friend or foe has asked you for a favor. What happens if you
say no? Do you grant the favor? How do you decide what to do?
- Staying in Abilene
- A "Trip to Abilene," identified by Jerry Harvey, is a group decision to undertake an effort
that no group members believe in. Extending the concept slightly, "Staying in Abilene" happens
when groups fail even to consider changing something that everyone would agree needs changing.
- Why Scope Expands: I
- Scope creep is depressingly familiar. Its anti-partner, spontaneous and stealthy scope contraction,
has no accepted name, and is rarely seen. Why?
See also Emotions at Work and Organizational Change for more related articles.
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- And on May 8: Antipatterns for Time-Constrained Communication: 3
- Recognizing just a few patterns that can lead to miscommunication can reduce the incidence of problems. Here is Part 3 of a collection of antipatterns that arise in technical communication under time pressure, emphasizing past experiences of participants. Available here and by RSS on May 8.
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