Challenges of corporate restructuring at lake basin development authority, Kenya

Abstract

Organizations are being faced with rapidly and constantly changing technologies, customer expectations, rules and regulations. This means that the same organizations have to constantly change the way they operate in order to remain relevant and competitive through corporate restructuring. Restructuring poses challenges to the firms implementing it. Corporate restructuring is the process of reorganizing or redesigning the organization structure. This study was conducted to identify the challenges of corporate restructuring at Lake Basin Development Authority, Kenya, and the measures to deal with the challenges of corporate restructuring. The study was conducted through case study research design, primary data was collected using structured interview guide from the managers while secondary data was gathered from the Lake Basin Development Authority strategic plans. Data was analyzed using content analysis.The study established that challenges faced during restructuring included: financial constraints, misunderstanding and lack of trust, lack of constant monitoring in order to identify flaws that may be present in the current program and that need correct them early, poor communication, loss of key personnel, poor leadership and lack of continuous training and sensitization. The study concluded that organizations will only adapt to the changing environment by creating different sets of resources and organizational capabilities to as to continue being relevant and keep up with competition. The way they restructure is influenced by the pressures of the various rules and norms, therefore an organization should restructure based on the current situation it is facing. Challenges during and after restructuring needed to be addressed by proper planning for restructuring, two way communication and staff involvement in order to achieve the main goals of restructuring, which is to effectively and efficiently attain the goals of organizations. It was evident that most of these challenges affected the employees of an organization. The study recommends that the organization need to provide attractive reward packages, involve in participative management, provide accurate and timely communication. The study had a limited scope, time constraints and since it was a case study, the findings could not be generalized to a wider population. Similar study can be conducted in future to investigate the effect of corporate restructuring on different aspects of performance or the role of employee involvement during restructuring at Lake Basin Development Authority in order to eliminate the limitation of scope of the study. Further research can be carried out on the other forms of restructuring such as portfolio and financial restructuring to determine if they have the same challenges while implementing them. A similar study can also be done on challenges of corporate restructuring within Regional Development Authorities in order to take into consideration the issues of different organizational cultures, different management styles and different resource capabilities.