Restructuring of United Bank limited

I believe that constant restructuring and change adversely affects both the staff and the organisation performance. United Bank Limited is one of the largest commercial bank in Pakistan with almost forty-six years of good standing to its valued clients. UBL provide the best customer service through a wide network of over 1000 domestic branches all over the Pakistan and 15 overseas branches as a part of global network. In 1998 the numbers of branches were over 1500 and staff was 16000.

But the bank was in continues loss and the management decided to downsizing of staff and reducing the number of branches so that those branches that are producing huge losses over the past five years should be closed and staff should be given golden shack hand scheme. By applying this act most of the senior staff with a huge experience have lost their jobs and about 4600 employees out of whom 80% were those with more than 20 years of experience have been shacked after giving a handsome lumsum amount.

By doing this they also closed more than 400 branches in remote areas, which were in loss. Actually by doing this act they over come the huge expenses of the bank and reduce the loss for the time being. The objective of restructuring of management was to reduce the salaries of old people and hire the new well-educated people, so management want to get double advantage.

The management decision was right by theoretically approach but practically approach that decision was wrong. This restructuring have very adverse after effects, as most of the senior staff that knows the banking very well and having a huge experience left the bank and then management hired new educated and fresh people. This fresh blood injected was a good change for the bank but they are not the same value as the experience people so bank suffer the lack of experience.

Most of the senior level positions were refilled by new inexperience people, which let the bank Back foot Those senior level positions were executive level, Assistant vice president, vice president, Grade one manager level people, operational managers, senior officers auditing. Effects of change on staff as well as organisation A big change in the organizational set up also creates lots of problems for the staff as well as the smooth running of any organisation. If staff is effected and demoralised and unstable how they can put their 100% abilities and how they can focus on the development and progress of the organisation.

Management hired new inexperience educated people without any proper training so the process of learning was so difficult for new people because most of the senior level positions were refilled by inexperienced people, these people were unable to guide the others that, how to deals with customers or telling the service tactics, there was no proper guidance that how to promote the sale and how to excel the product and how to enter into competition, The moral of staff were down and they feel insecure, because there is no people to motivate them or encourage them.

The year 2001 was a remarkable year in the history of united bank limited as well as the banking sector of Pakistan. The bank has steps into Internet banking and online banking. This was a huge project, which cost about Rs. 2. 3 billion. This was a huge investment by any bank. This was a huge change from the manual banking to computerized online banking. The management suddenly launched IT project, which also faced the problems for the staff because the staff were not prepared for this change.

Most of the staff has no strong IT background. Which definitely required new qualified as well as IT training sessions for old staff so that they can run their working smoothly and the concept of error free banking were achieved fully. This structural change adversely affects the moral and efficiency of the staff. Staff was not able to deal with the problems related to IT. During the period of one to three year bank suffered the loss at that time. Staff feel, insecure, unstable and the motivation level were very low at that time.

Because most of the staff were hired on contract basis for the period of three years after that permanent chances was linked with the performance of worker. This change was directly affected the effectiveness and efficiency of the staff and staff moral was down. A steady approach could be taken instead of getting rid of the staff heavily, step by step redundancies would have given opportunities to new comers to take advantages from experienced staff by learning different methods and techniques. It will be much better for the new comers. New comers feel satisfaction and work with more effective and efficient way.

Before launching the IT project, if management properly trained to the staff, they can run their working smoothly and the concept of error free banking were achieved fully and they perform their duties with effective and efficient manner. Organisational structure of united bank limited. Example. 2 Restructuring of "Burley Engineering" Burley Engineering is a UK based steel work Fabricator Company, They are specialized in designing, detailing, fabricating and erecting all type of steel structures. Burley engineering missed its sales target last year and reluctant some people as well.

Even in this year it will miss its sales target but the main surprise is that they have stopped taking work for this year because they are full of work, which makes them to think that there are some issues which needed to be addressed before making a strategy. Organisational structure of Burley Engineering: Other than this there are two service units one is accounts and other is IT unit. Business teams have estimators, designers, quantity surveyors and project engineers where all other units consist of the people of same expertise. It is the responsibility of team to win the job and complete it within estimated budget.

All other units are responsible for the performance of their own units. Project engineer of the team makes the whole project plan. The company has restructured with the objective to increase the profit and to reduce the cost. Before this structure the staff was linked into different departments, but the management has now combined the different groups as a units and every group is only concern with their own unit. Each division has separate profit and they are only responsible for their own work. Management objective for restructuring is to create the competition among the different unites and earn more profit.

Every unit has their separate sales target. Effects of constant restructuring of Burley Engineering steel works. Now the structure of the company has positive effects on staff and the company performance, the competition among the different groups increase the effectiveness and efficiency of the workers. Due to change in structure, every group now competes with the other group; there is healthy competition among the different units. The management introduces the reward system, which encourage the workforce to work with full potential.

The total profit of 1 % is distributed among the staff, which increases the efficiency and effectiveness of the staff. The moral of the employees are very high. Every person is now responsible for his own group and there is better communication within the groups. Different organizations have different structures. In earlier theories there was a bureaucracy system, due to changes in technology and increase the competition among the organisations. Organisation needs to change the structure to compete with the global market. Still many of the organisations are followed the old structure and they are performing very well.

Old structure is still very important but there is need for some changes in workforce according to the organisation needs. But constant restructuring in any organisation have adversely affects of employees as well as organisation performance due to constant restructuring the moral of the workforce go down and they feel unsecured and unstable that lead to the low efficiency of the workforce. Organisational structure affects the moral and job satisfaction of the workforce. When there is reward system within the organisation the workers will work with more effective and efficient manner.

Effective and appropriate structure will lead to satisfied work force which will reduce the staff turnover but at the same time restructuring on short period of time and with regular intervals can reduce the morale and it also create insecurity among the staff. Restructuring also has its effects on the loyalty of staff towards its company. From above advantages and disadvantages of restructuring are clear, so when making the decision about the structure management needs to be vigilant with the consequences it can come across.