Restructuring – an over-used lever for change in New Zealand’s state sector?

Abstract

Is restructuring the hammer of organisational change in New Zealand’s state sector? A State Services Commission (SSC) survey of state sector employees in 2010 identified that 65 per cent of the 4,600 staff sampled had been involved in a merger or restructure during the previous two years, a sharp contrast with a similar survey of the federal government of the United States, which found that only 18 per cent were affected. These statistics raise questions which form the basis of this paper: why, how and to what effect are state sector organisations restructured in New Zealand? Our research started with a review of empirical data on restructuring and of perspectives from the literature on restructuring in the public and private sectors. We then explored these perspectives in three separate focus groups in May 2011, with chief executives, human resource managers and Public Service Association (PSA) delegates and organisers. Not surprisingly, chief executives (CEs) who initiate restructuring have a considerably more optimistic view about its role and impact than those who are affected by it. Annex One is a reflection piece written by one of the most experienced New Zealand public service chief executives, Christopher Blake, Chief Executive of the Department of Labour, (and Chief Executive of the New Zealand Symphony Orchestra from 2012), provides a balance to the more sceptical argument presented in this paper. We conclude that restructuring has indeed become the ‘hammer’ of organisational change in New Zealand, a result of the ‘freedom to manage’ formula adopted in the late 1980s to break up a unified and ‘career for life’ bureaucracy that was seen to respond to slowly to the economic crises of the 1980s. Restructuring has become almost an addiction, reinforced by short, fixed term contracts for chief executives and a belief by those chief executives that their employer, the State Services Commission, expects them to be seen to be ‘taking charge’. Restructuring is a symbol and sometimes and substitute for action. It treats organisations as though they are mechanical objects with interchangeable parts rather than as living systems of people who have choices about the extent to which they will commit to their work. Organisational change receives considerably less scrutiny than funding proposals for major capital works. We advocate that restructuring should be subject to such scrutiny and chief executives need to act more like stewards of their organisations and less like owners.