Question

Describe what is meant by the terms restructuring and reengineering, and discuss when and why they would be used.

Answer 1

The Restructuring refers to the reorganization of the given structure, process or the functions to bring the desired change in terms of higher level of efficiency, lower cost and improved productivity. The re-engineering deals with the doing a process in a different way so that more benefits are created and wastes are minimized. Both these methods are used to bring the change in the organization, but used differently in different settings.
Where there is a need to change the organization structure, then the restructuring is done. For example, a change from vertical to flat organizations, requires restructuring. Besides, the downsizing process in the organization, also requires restructuring. In contrast to it, if the accounts department wants to implement zero based budgeting from the traditional budgeting, then it is re-engineering. Even the streamlining of the process to prevent the waste, is the part of re-engineering. Here, restructuring has more to do with the change in position of the personnel, whereas the re-engineering changes the process or the way of doing the work. Hence, these two methods work differently.