**3. Definition of the "reorganization" or "redesign" factor**

The determinant effect of the "reorganization" factor is the response of public sector organizations to critical situations. This section defines the factor

**89**

menting change.

reach the market.

intra-business workflows and processes.

changing the overall business strategy.

**4. Factors of "reorganization"**

*Crisis Management and the Public Sector: Key Trends and Perspectives*

ask itself why it applies these processes and why it does so.

"reorganization," which illustrates the need for the factor, its contribution to the operational context of public administration through a bibliographic review, and a case study of the reorganization and the crisis of public sector organizations.

The "business process reengineering" ("BPR"), to the service of the reorganization or redesign [13], corresponds to a radical and "fundamental" redesign of business processes, so that substantial changes can be made to key areas that determine operational performance, such as production cost (better "cost of development"), productivity, service and product costs (better "delivery cost"), quality provided, customer service, and speed. The concept of redesign was originally designed for private sector businesses and then extended to bureaucratic processes of public administration. The term fundamental redesign means that the body/organization decides to completely abolish the process it is currently applying and is intending to accept another, new process. Radical redesign also refers to fundamentally changing all processes, while redesigning is about applying a new business process rather than improving or modifying an existing one. Spectacular improvements relate to the product of the business and not to the marginal improvements that can be made by improving the management of the processes applied. According to the above, in case that a company seeks to modernize itself by changing its processes, it should

In [14], the authors also argue that reorganization can be defined as the analysis and planning of in-company and inter-company workflows and processes. According to the same researchers [15], the concept of business reorganization is an integral part of a larger "idea" and therefore introduces the term business innovation process which implies the creation of a strategic vision and the engagement of human resources, technology, and other critical resources in planning and imple-

In [11] they argue that the concept of reorganization is fundamentally related to the re-examination and redesign of a company's business processes and organizational structure, with the aim of achieving clear improvement in key areas such as quality, productivity, customer satisfaction, and the time it takes for a product to

In [14] it reports that BPR is the analysis and planning from the beginning of

quality, and customer perception of the company's products/services.

In summary, a business restructuring can be regarded as a critical analysis, reassessment, and radical redesign of existing business processes to achieve significant improvements in performance metrics, from the perspective of relocating and

Through reorganization, the company sets goals, such as improving productivity, in order to increase product output, rationalizing the management of production costs and resources, making the most of the available human resources, optimizing

The term "process innovation" encompasses the consideration of a broader strategy, the design of the process, and its application to all complex technological and organizational structures [16]. Other authors focus on reviewing, restructuring, and redesigning the business structure, processes, working methods, management systems, and external relationships through which value is created and disseminated. For [17], BPR involves the simultaneous redesign of business processes and their support systems in order to achieve a radical improvement in time, cost,

*DOI: http://dx.doi.org/10.5772/intechopen.90855*

#### *Crisis Management and the Public Sector: Key Trends and Perspectives DOI: http://dx.doi.org/10.5772/intechopen.90855*

*Public Sector Crisis Management*

Internal factors

*Key phases of a crisis event.*

**Figure 2.**

• Incomplete information • Collapse of electronic systems • Accidents due to defective products

• Industrial accidents

External factors • Environmental disaster • Sabotage by external factors

• Natural disasters • Terrorism actions • Mergers and acquisitions

• Scams • Social crises

**Table 1.**

*Source: Mitroff [12].*

*Separation of crises.*

The "technical-economic factors" mainly consist of natural disasters, earthquakes, floods, fires, hurricanes, H1N1 virus, mad cow disease, etc., while the "human-organizational-social" factors may include, among others, political and/or

**Technical-economic factors Human-organizational-social factors**

• Inability to adapt to changes • Organization's communication crash

• Sabotage by external factors

internal factors) • Occupational issues

• Terrorist actions

• Scams

• Intentional damage (i.e., a product of sabotage from

They may also include characteristic cases regarding information leakage and

In the case of the "technical-financial factors," issues are raised from defective products that drive companies to withdraw them from the market, defective machinery that can be hazardous to human use or may result in injuries to personnel or other stakeholders (i.e., customers, partners), or in extreme cases even in an accident.

The determinant effect of the "reorganization" factor is the response of public sector organizations to critical situations. This section defines the factor

economic crises or even political instability in countries.

**3. Definition of the "reorganization" or "redesign" factor**

**88**

loss of human lives.

"reorganization," which illustrates the need for the factor, its contribution to the operational context of public administration through a bibliographic review, and a case study of the reorganization and the crisis of public sector organizations.

The "business process reengineering" ("BPR"), to the service of the reorganization or redesign [13], corresponds to a radical and "fundamental" redesign of business processes, so that substantial changes can be made to key areas that determine operational performance, such as production cost (better "cost of development"), productivity, service and product costs (better "delivery cost"), quality provided, customer service, and speed. The concept of redesign was originally designed for private sector businesses and then extended to bureaucratic processes of public administration. The term fundamental redesign means that the body/organization decides to completely abolish the process it is currently applying and is intending to accept another, new process. Radical redesign also refers to fundamentally changing all processes, while redesigning is about applying a new business process rather than improving or modifying an existing one. Spectacular improvements relate to the product of the business and not to the marginal improvements that can be made by improving the management of the processes applied. According to the above, in case that a company seeks to modernize itself by changing its processes, it should ask itself why it applies these processes and why it does so.

In [14], the authors also argue that reorganization can be defined as the analysis and planning of in-company and inter-company workflows and processes. According to the same researchers [15], the concept of business reorganization is an integral part of a larger "idea" and therefore introduces the term business innovation process which implies the creation of a strategic vision and the engagement of human resources, technology, and other critical resources in planning and implementing change.

In [11] they argue that the concept of reorganization is fundamentally related to the re-examination and redesign of a company's business processes and organizational structure, with the aim of achieving clear improvement in key areas such as quality, productivity, customer satisfaction, and the time it takes for a product to reach the market.

In [14] it reports that BPR is the analysis and planning from the beginning of intra-business workflows and processes.

The term "process innovation" encompasses the consideration of a broader strategy, the design of the process, and its application to all complex technological and organizational structures [16]. Other authors focus on reviewing, restructuring, and redesigning the business structure, processes, working methods, management systems, and external relationships through which value is created and disseminated. For [17], BPR involves the simultaneous redesign of business processes and their support systems in order to achieve a radical improvement in time, cost, quality, and customer perception of the company's products/services.

In summary, a business restructuring can be regarded as a critical analysis, reassessment, and radical redesign of existing business processes to achieve significant improvements in performance metrics, from the perspective of relocating and changing the overall business strategy.

## **4. Factors of "reorganization"**

Through reorganization, the company sets goals, such as improving productivity, in order to increase product output, rationalizing the management of production costs and resources, making the most of the available human resources, optimizing

financial performance and cash flow, and improving existing processes and operations. The strategic goal of reorganization is to increase the value of the business.

Looking at the business from a financial point of view, internal considerations can "force" a firm to restructure itself, such as the dire prospects of liquidity performance indicators, thus requiring active strategies in the structural characteristics of businesses. In addition, the inefficient functioning of internal structures is based on human resources and processes, which act as a barrier to critical administrative decision-making.

Another factor contributing to the reorganization is the repositioning of the overall business strategy implemented by changing the goals and direction of the organization, activities, redeployment, or layout of resources, adapting to the environment, and responding to market needs and to the satisfaction of shareholders and stakeholders.

Thus, the reasons for deciding whether or not to restructure may be either in the internal operating area of the business or in the external environment (micro– macro environment). With the use of SWOT [18] analysis of a business, where the strengths and weaknesses of the business are identified and compared with opportunities, and threats to the external environment are avoided, an organization running under a specific framework can be reorganized. The redesign procedural framework requires careful study and structured procedures so that the actions taken will enable the business or organization to achieve the desired result for the target product or customer. Criteria for implementing these processes are the company's new strategy and its goal of providing customer-oriented services. The other areas of redesign relate to more efficient operation of the production process, which adds a comparative advantage to the finished product. Elements of a restructuring or redesign program are the benchmarking of a firm's performance based on measurable parameters of strategic importance with performance indicators over other competing companies operating in the same area. Another element of the reorganization of organizations is the upgrading of human resources, which need to be equipped with appropriate tools for more efficient work and better and complete information. In this case, information systems are of particular importance throughout the reorganization process, as they dramatically change the efficiency and effectiveness of the business.

In general, we argue that key steps to be taken in business reorganization are as follow: (i) to reorder strategic goals, (ii) to create a leadership team to execute the strategic plan, (iii) to study and adopt best business practices, (iv) to develop technology networks, (v) to identify opportunities, potential problems, and threats, (vi) to use appropriate performance indicators, (vii) to implement a modern financial management model, and (viii) to implement an effective measurement results' system.

In general, the process of implementing the restructuring plan can be divided into four main stages (see also **Figure 3**):


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*Crisis Management and the Public Sector: Key Trends and Perspectives*

d.Evaluating results by establishing a reliable benchmarking mechanism, before and after a reorganization, and recording results and experiences for future use

The necessity of having the factor of redesign in critical situations in public organizations arises from the work of a number of researchers in the field of "public

According to [6, 19], restructuring of public administration refers to reforming its operational processes to achieve its strategic goals, while reforming its organizational structure and institutional framework to support new processes. The reasons for implementing redesign programs in public administration are summarized as

I. **Public sector lags the private sector**: The public sector has not been reformed at the same time as the private sector, still causing deficits and budget crises. II. **The crisis of legitimacy of the modern state**: This phenomenon stems from the inability of the modern state to effectively tackle rather complicated social phenomena, due to lack of transparency in public administration mechanisms and from the increased criticism originated from the people toward the political system. The consequence is the depreciation of the authority of the state and its establishment toward its constituencies, the citizens, being considered

*DOI: http://dx.doi.org/10.5772/intechopen.90855*

by the company

*Steps of a public organization's restructuring plan.*

administration."

**Figure 3.**

follows [20, 21]:

**5. Necessity of redesign in public organizations**

as an anachronistic and declining institution.

*Crisis Management and the Public Sector: Key Trends and Perspectives DOI: http://dx.doi.org/10.5772/intechopen.90855*

*Public Sector Crisis Management*

decision-making.

ers and stakeholders.

and effectiveness of the business.

into four main stages (see also **Figure 3**):

financial performance and cash flow, and improving existing processes and operations. The strategic goal of reorganization is to increase the value of the business. Looking at the business from a financial point of view, internal considerations can "force" a firm to restructure itself, such as the dire prospects of liquidity performance indicators, thus requiring active strategies in the structural characteristics of businesses. In addition, the inefficient functioning of internal structures is based on human resources and processes, which act as a barrier to critical administrative

Another factor contributing to the reorganization is the repositioning of the overall business strategy implemented by changing the goals and direction of the organization, activities, redeployment, or layout of resources, adapting to the environment, and responding to market needs and to the satisfaction of sharehold-

Thus, the reasons for deciding whether or not to restructure may be either in the internal operating area of the business or in the external environment (micro– macro environment). With the use of SWOT [18] analysis of a business, where the strengths and weaknesses of the business are identified and compared with opportunities, and threats to the external environment are avoided, an organization running under a specific framework can be reorganized. The redesign procedural framework requires careful study and structured procedures so that the actions taken will enable the business or organization to achieve the desired result for the target product or customer. Criteria for implementing these processes are the company's new strategy and its goal of providing customer-oriented services. The other areas of redesign relate to more efficient operation of the production process, which adds a comparative advantage to the finished product. Elements of a restructuring or redesign program are the benchmarking of a firm's performance based on measurable parameters of strategic importance with performance indicators over other competing companies operating in the same area. Another element of the reorganization of organizations is the upgrading of human resources, which need to be equipped with appropriate tools for more efficient work and better and complete information. In this case, information systems are of particular importance throughout the reorganization process, as they dramatically change the efficiency

In general, we argue that key steps to be taken in business reorganization are as follow: (i) to reorder strategic goals, (ii) to create a leadership team to execute the strategic plan, (iii) to study and adopt best business practices, (iv) to develop technology networks, (v) to identify opportunities, potential problems, and threats, (vi) to use appropriate performance indicators, (vii) to implement a modern financial management model, and (viii) to implement an effective measurement results' system. In general, the process of implementing the restructuring plan can be divided

a.Assessing the current state of the business such as products, various financial data, organization chart, competition, customers, suppliers, and banks

b.Identifying reorganization goals and preparing the work plan by defining the reorganization goal; planning the action plan; discussing, accepting, and adopting the plan from executives and employees; communicating the vision;

c.Implementation of the work plan with precise action schedules, identifying important milestones for the project, accurate task allocation, project monitor-

ing process, and correcting any divergences from expected results

and preparing executives and staff for the change process

**90**

**Figure 3.** *Steps of a public organization's restructuring plan.*

d.Evaluating results by establishing a reliable benchmarking mechanism, before and after a reorganization, and recording results and experiences for future use by the company
