Abstract:
The business environment is continuously changing and organisations are dealing
with the after-effects of a global economic slowdown as well. Organisations are
under pressure to change the way they do business in order to remain
competitive in a more demanding and cost-controlled environment. Many
organisations have turned to restructuring as a strategic decision to realign
internal structures with changing macro-environmental factors. Through
restructuring they implement cost cutting by downsizing or re-engineering
processes and closing down unprofitable divisions. The finding from this research
is that, within the population studied, restructuring and damage to institutional
trust affect the level of employee engagement. This finding was supported by
statistical evidence which indicated that there is a high correlation between
corporate restructuring, institutional trust and employee engagement and that a
change in experience or perception of one of these constructs will affect the
others accordingly. The conclusion drawn was that retaining the trust and
commitment of employees is a central issue for companies in a highly competitive
and changing environment. The article provides clear evidence of the possible
negative implications of corporate restructuring and provides practical
suggestions for limiting the potential problems.
