Company restructuring study

7/28/2019 Company restructuring study

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1.0 Executive Summary

This study report looks into the efforts that have been made by The Worldwide Toy Company to

restructure in the recent past. The research starts out with the company background, then an analysis

of research data. In the analysis section, the researcher uses quantitative methods to analyze data on

the perspectives of the company’s employees towards the organization so as to provide precise

answers to the study questions. Towards the end of the report, the researcher provides support for

the research methods used.



Section One: Characteristics

1.1 Company Background Summary

The Worldwide Toy Company has been facing steadily increasing competition from the company

rivals in the industry led the company to opt for desperate measures so as to remain relevant in the

game. Other players in the industry have gained a competitive edge and therefore posed a cut throat

competition for Worldwide Toys. This increased competition has led to a substantial decrease in the

company’s market share, accelerated by increased competition from rival companies in the industry.

The increased competition influenced the decision by the company’s management to opt for the

restructuring program. In spite of this, the employees expressed discontent with commitment of

middle managers to achieving the company’s objectives and goals.

1.2 Company Scenario

Among the key objectives of the company in its restructuring program was to reduce internal

bureaucracy. As such, major changes have been made on the representation of sales and marketing

staff to consumers including separating this department from production facilities. This

restructuring effort has seen the company strive to use more cost effective production methods in its

various departments; a move that sought to increase its competitive advantage and hence raise itsmarket share. Therefore, it is believed that the competitive edge of the company will arise from

more consumer friendlier prices.

In the recent past, the Worldwide Toy Company has experienced a significant restructuring

program. Among the outcomes on restructuring efforts is the reduction in staff by 25% (from 2510

employees to 1883 employees), and a 30% downsizing (from 37 to 26 departments) in its structural

departments. Table 1 shows the percentage staff lost as a consequence of restructuring indicating a

loss of employees across the managerial hierarchy of the firm.

Table 1: The percentage of staff reductions by managerial level and gender as a consequence of the restructuring.

Males

(% loss in cell)

Females

(% loss in cell)

Marginal Loss

(% loss in cell)

Senior Managers ↓35.0% ↓20.0% ↓28.7%

Middle Managers ↓37.6% ↓11.5% ↓26.7%

Junior Managers ↓21.2% ↓19.0% ↓20.1%



Line Workers ↓36.7% ↓17.7% ↓25.2%

Marginal Loss

(% loss in cell)

↓35.0% ↓17.6% ↓25.0%

1.3 Research Design

The use of quantitative methods is the most appropriate for the general survey component of the

research as it allows for the collecting of data from a large sample size (Morris, 2008, Oakshott,

2011). The quantitative method of data analysis allows collection of data from a large number of

correspondents within the minimal time limits possible. The method also allows for verification of

results with minimal incidences of researcher bias. Secondly, the use of quantitative method in

research analysis is supported in social science research. This is because larger data sets can be

analyzed without interference from the researcher. Lastly, descriptive statistics can be used in

developing hypotheses and their detailed examination (Waters, 2001, Wisniewski, 2005 and Davies,

2007). Table 2 indicates the relationships between the hypotheses and research questions. This table

also contains the key variables that will be used to determine each hypothesis that will be the basis

for quantitative questions.

Table 2: The questions and hypothesis used in this research project along with the variable and measures to be used.

Research Question Related Research Hypothesis

How supportive of managers and how

committed to managers do respondents feel

that Worldwide was during the planning and

implementation of the restructuring?

That managers were supportive and commited to Worldwide during the

planning and implementation of the restructuring

What were managers’ belief in need for the

restructure, acceptance of the new structure

and feelings of comfort with their place

within the new structure at Worldwide and

what were managers’ general levels of

perceived stress and intention to stay withWorldwide as a consequence of the

restructuring?

Belief in need for the restructure and acceptance of the new structure

will each be positively associated with managers’ feelings of comfort

with their place within the new structure.

Acceptance of the new structure and level of comfort about their placein the new structure will be positively related to intentions to stay with

Worldwide, but negatively associated with level of perceived stress.

Do the gender and management level of the

manager differ?

That Gender and management level affect the feelings about

Worldwide’s support and commitment to managers through the

restructuring process.

That Gender and management level affect the managers’ belief in need

for the restructure, acceptance of the new structure and feelings of

comfort with their place within the new structure at Worldwide and

managers’ general levels of perceived stress and intention to stay withWorldwide.



Can certain predictive relationships,

hypothesized based on behavioral and

organizational research change literature, be

supported in the case of the change process

at Worldwide?

Feelings of support and commitment will be predictive of how strongly

managers believed in the need for the restructure, accepted the new

structure, and felt comfortable with their place within the new structure.

The following variables, considered in order as sets, will be predictive

of perceived stress levels and intentions to stay at Worldwide: (1) gender

and management level; (2) organizational support for and commitmentto employees through the change process; (3) belief in the need for the

restructure and acceptance of the new structure; and finally (4) level of

comfort with place in the new structure.

Can patterns of ‘change resisters’ and

‘change accepters’ be identified from

managers’ belief in need for the restructure,

acceptance of the new structure and feelings

of comfort with their place within the new

structure and are these patterns related to

gender, management level, organisational

support of employees, organisationalcommitment to managers, perceived job role

stress levels and intentions to stay at

Worldwide?

1.4 Methods

This project is based on chose closed ended questionnaires as the research instrument. Since the

research is dealing with a substantial number of respondents, it was most appropriate to use the

closed ended questionnaires to reduce chances of inaccuracy and bias in the analysis of answers

provided (Singh, 2002, Burnside, 2008 and Dasborough, 2010). Additionally, descriptive statistics

can be used to verify the results analyzed from questionnaires in the quantitative technique

(Burnside, 2008). In this research, a large sample size is used. This ensures that there will be higher

levels of reliability on the research results since random sampling errors will be significantly

minimized.

1.4.1 Data Collection Method

The survey cover letter was designed with five aspects dealing with why the information is being

collected and by who, as well as reflecting the ethical and privacy in the treatment of individual the

results:

(1) that the survey is general purpose;

(2) the names of the researchers who was conducting the survey and your credentials;

(3) responses would be held confidential such that only the researcher would know who gave

which responses;



(4) participation was entirely voluntary; and

(5) forms needed to be competed within one week and returned to a specially provided

locked steel box.

A total of 184 questionnaires were sent to managers. Based on the results, the response rate of questionnaires was 56%, where a total of 103 surveys were returned. The questions were designed

to address each of the hypotheses with each question based on one of the measures and variables.



Section Two: Quantitative Data Results

2.1 Introduction

There was a high degree of question answering all but one showing 94% or above response, with

only the question in relation to stay indicting a reduced answer rate of 78.6% (Table 3). The lack of

response in the intention to stay is indicative of the feeling of 'wait and see' within the organisation.

Table 3: Case possesing summary.

Cases

Valid Missing Total

N Percent N Percent N Percent

understand_need_restruct 99 96.1% 4 3.9% 103 100.0%

training_new_job 99 96.1% 4 3.9% 103 100.0%

support_redundant 97 94.2% 6 5.8% 103 100.0%

include_dec_making 102 99.0% 1 1.0% 103 100.0%

minimise_job_loss 103 100.0% 0 0.0% 103 100.0%

open_implications 102 99.0% 1 1.0% 103 100.0%

belief_need_restruct 102 99.0% 1 1.0% 103 100.0%

accept_new_struct 102 99.0% 1 1.0% 103 100.0%

comfort_place_new_struct 101 98.1% 2 1.9% 103 100.0%

job_role_stress 101 98.1% 2 1.9% 103 100.0%

intention_to_stay 81 78.6% 22 21.4% 103 100.0%

2.4.1 Support and Commitment of Managers to Change (Question 1)

The results indicate that there was a belief that there was not the appropriate level of support offered

to employees from management as a consequence of the restructuring The normalcy testing data

indicates that there was some specific bias towards a negative reaction (Table 4). The skewing in

normalcy is a consequence of the wider distributions indicating diverse opinion, and marginal bias

generated particularly by the negative sentiment towards management's approach to the restructuring

(Figure 1). In terms of belief that management aimed to minimise job losses 75.7% of the sample

respondents believed that the management initiated the organisation's restructuring with

redundancies as part of the program. One aspect in which it can be identified that management



failed to offer support as in the area of retraining, with 84.4% of respondents believing that

managers were not appropriately trained for new job roles. One of the most significant effects was

the stress associated with job description with a wide distribution reflecting a diverse set of opinions

in the work place. Table five provides the distribution of the collected data.

Table 4: Normalcy test for the collected data.

Kolmogorov-Smirnov a Shapiro-Wilk

Statistic df Sig. Statistic df Sig.

understand_need_restruct .145 99 .000 .959 99 .004

training_new_job .151 99 .000 .949 99 .001

support_redunda nt .136 97 .000 .964 97 .009include_dec_making .147 102 .000 .958 102 .003

minimise_job_loss .161 103 .000 .955 103 .002

open_implications .160 102 .000 .960 102 .003

belief_need_restruct .051 102 .200* .994 102 .934

accept_new_struct .056 102 .200* .991 102 .719

comfort_place_new_struct .078 101 .141 .988 101 .529

job_role_stress .057 101 .200* .989 101 .589

intention_to_stay .077 81 .200* .988 81 .686

Table 5: The means and standard deviation of the collected data.

Aspect Mean Std Error

understand_need_restruct 4.6465 0.1766

training_new_job 4.0404 0.15723

support_redunda nt 4.9897 0.15195

include_dec_making 4.4412 0.18462

minimise_job_loss 4.4951 0.15043

open_implications 5.2843 0.18187

belief_need_restruct 50.4804 2.03725

accept_new_struct 49.4608 1.85918

comfort_place_new_struct 49.4455 1.93848

job_role_stress 42.3861 1.89057

intention_to_stay 50.0741 1.56009



Figure 1: Histograms with distribution curves for each of the survey questions.



2.4.2 Manager's Beliefs, Stress, and Job Security (Question 2)

The results indicate that the manager's feelings of comfort within the new structure is positively

associated with the acceptance and belief in the need for the restructuring. Table 6 provides the

correlation between the belief in the need for the restructure and acceptance of the new structure

and the level of comfort the manager feels in the new structure. The correlations indicate that their

is positive relationship between the comfort (0.291) and acceptance (0.313) and the belief in the

need for the organisations restructuring. This indicates that those who do not belie the restructuring

is necessary are not accepting of the changes and not comfortable within the organisation.

The resulting correlations form the results also indicate that the hypothesis that there would be a

positive relationship to wanting to world wide toys and a negative correlation between the level of

stress and the acceptance of the new structure. The results indicate that there is a negative

correlation between the managers perceived level of stress in terms of acceptance of the new

restructuring (-0.293) and comfort within the new structure (-0.389). Those who accept the new

structure are also highly likely to stay with the organisation (0.581). The intention of managers to

stay at Worldwide Toys was also highly correlated with the feelings of comport (0.292) with the

restructuring.

Table 6: Correlations between the survey aspects dealing with Manager's Beliefs, Stress, and Job Security.

belief_need_restruct accept_new_struct comfort_plac

e_new_struct

belief_need_restruct

Pearson Correlation 1 .313 .291

Sig. (1-tailed) .001 .002

N 102 101 100

accept_new_structPearson Correlation .313 1 .235

Sig. (1-tailed) .001 .009

N 101 102 100

comfort_place_new_struct

Pearson Correlation .291 .235 1

Sig. (1-tailed) .002 .009

N 100 100 101

job_role_stress

Pearson Correlation -.499 -.293 -.389

Sig. (1-tailed) .000 .002 .000

N 101 100 99

intention_to_stay

Pearson Correlation .164 .581 .292

Sig. (1-tailed) .073 .000 .004

N 80 80 79



2.4.3 Multivariate interactions 3 (Question 3)

The multivariate analysis between gender and level of management indicates that there is a

significant difference (Wilks lambda= 0. 928, MV, F (2,97)=3.765, P=.027, partial eta-squared= ,

072). This was particularity significant for commitment (P= 0.625) with limited significance in

terms of support support scores (P=.013, partial eat squared=.062). The support scores need to

quantified by the level of management that is being considered with male middle manage having a

higher support for restructuring than females which was not identified with senior

management( figure 2).

Figure 2 The estimated marginal means and management level indicating that there are gender differences. in support

for change.

2.4.4 Predictive relationships (Question 4)

The individual emotions towards commitment and support of the restructure with is strongly



correlated to their perceptions of organisational need and personal comfort within World wide Toys.

The multiple regression analysis indicates that higher commitment to the restructure is predictive of

commitment if the manager also perceived the need for the restructure 59 (SE=1.1441), β =0.308,

t(98)= 3.094, P=0.003). This predictive relationship was not found with support and commitment

with little rate of zero order correlation of 0.90 (B=0.165 (SE=1.568), β = .010, t(98)= 0.105, P=

0.917). The data also indicated that if a client accepts the new structure there is a strong predictive

correlation for comfort (P= 0.753).

In relation to job stress at Worldwide Toys the correlations indicate that the prediction of perceived

stress levels in relation to other surveyed questions were all negatively correlated, the results were

not significant falling below the threshold of 0.50 (Table 7). Table 8 indicates that and intentions to

stay at Worldwide were only significantly and possessively correlated with support and a belief inthe need for restructuring.

Table 7: Predictive correlations between the survey aspects dealing with job Stress.

Aspect Zero-order Correlation

with stress

Significance

(significant if > 0.50)

Support -0.337 .044

Commitment -0.257 .084

Belief in need for restructuring -0.499 0.000Gender -0.320 0.001

Management -0.091 0.314

Acceptance of the new Structure -0.293 0.469

Comfort -0389 0.030

Table 8: Predictive correlations between the survey aspects dealing with intentions to stay.

Aspect Zero-order Correlation

intention to stay

Significance

(significant if > 0.50)

Support 0.140 .982

Commitment 0.456 .000

Belief in need for restructuring 0.164 0.501

Gender 0.151 0.172

Management 0.167 0.133

Acceptance of the new Structure 0.581 0.000

Comfort 0.292 0.018

Given the results form the significance and hierarchical regression tests (Table 9), the following sets

are considered in ordered as sets, will be predictive of perceived stress levels and intentions to stay



at Worldwide:

Model for prediction df2

1) Gender and management level 76

2) The support and commitment component 74

3) Believe in the new structure 72

4) Comfort with new structure 71

2.4.5 Change Patterns (Question 5)

identified from managers’ belief in need for the restructure

acceptance

of the new structure and feelings of comfort with their place within the

new structure and are these patterns related to gender, management

level

organisational support of employees, organisational commitmentto managers, perceived job role stress levels and intentions to stay at

Worldwide



Figure 2:



3.2 Conclusion

Worldwide Toys has undergone a restructuring as a consequence of increased competition. The

individual emotions towards commitment and support of the restructure with is strongly correlated

to their perceptions of organisational need and personal comfort within World wide Toys. One

imperative observation from the study was that of a positive and significant correlation between the

willingness of manager’s to accept the structure and their commitment in continuing to work at

Worldwide Toys Company. This was further inversely correlated with the level of stress associated

with the new positions. On the other hand, statistically significant differences were found to exist

between sample responses relating to the company’s support and managers’ commitment with

gender as an independent variable. However, this was not the case as per the management level with

this being a clear indicator of a significant correlation between the firm’s support and the

commitment of its managers through the restructuring process and gender. The study therefore

concluded that an elastic and significant relationship exists between the organization’s overall

commitment and its managers’ views regarding the need for the restructuring. Organization support

and commitment was found to account for only 11.5% of the variation in the managers’ beliefs.



4.0 References

Burnside, R. (2008). Design, evaluation and analysis questionnaires for survey research. Journal of

Official Statistics, 24(3), 489-491.

Cooksey, R.W. (2007). Illustrating Statistical Procedures: For Business, Behavioral and Social

Research. Tilde University Press .

Dasborough, M. T. (2010). Design evaluation and analysis of questionnaires for survey research.

Organizational Research Methods, 13(4), 834-837.

Davies, M. (2007). Doing a successful research project: Using qualitative or quantitative methods,

London, Palgrave Macmillan.

Morris, D. C. (2008). Quantitative approaches in business studies, London, Financial Times,

Prentice Hall.

Oakshott, L. A. (2011). Essential quantitative methods for business management and finance,

London, Palgrave Macmillan.

Singh, S. (2002). Research methods in social science: A manual for designing questionnaires, Delhi,

Kanishka Publishing House.

Waters, D. (2001). Quantitative methods for business, London, Financial Times, Prentice Hall.

Wisniewski, M. (2005). Quantitative methods for decision makers, London, Prentice Hall.

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Company restructuring study