The logic of organizational restructuring in the public sector

And the questions you should ask before embarking on the path of organizational restructuring.

Researchers in Korea undertook a fascinating quantitative review of all government reorganizations or restructuring across OECD countries from 1980 to 2014. Their aim was to identify any patterns, and also to determine the extent to which political factors drive governmental reorganizations. The trends they identified highlight some strategic level issues for senior leaders and reform practitioners to consider when determining whether to initiate an organizational restructuring and how to assess its likelihood of success.

A key pattern identified is around the timing and frequency of governmental organizational restructuring, which also highlights the political nature of such endeavors. The researchers found that the creation of new ministries (births), the elimination of ministries (deaths), or the changes in functions and responsibilities of ministries or merging of them (successions) tend to happen at the same time (see graph). The timing tends to coincide with the first two years of a newly elected government, validating theories that reorganizations are often politically motivated by the desire to demonstrate change from a previous government. Interestingly, the same trend and alignment of sub-ministerial reorganizations does not exist, indicating that the desire for change at that level is often driven by functional motivations.

Figure 1 Births, deaths, and succession of government re-organizations in 30 OECD countries (1980 - 2014)

When researchers compared the frequency of governmental reorganizations across countries, they also noticed that they were consistently more frequent in parliamentary systems than presidential systems of government. The reason for this is that in presidential systems the presidential and legislative branches are elected separately and have power over each other, meaning there are also a higher number of veto points, where a governmental reorganization can be stymied. Parliaments are less likely to stop governmental reorganizations initiated by the prime minister, because she is the leader of the ruling political forces in parliament which implies a more collaborative approach, and therefore fewer veto points. Thus, frequency of governmental reorganizations are inversely proportional to the number of veto points in a system.

For those in international organizations, it raises some interesting points to consider when determining whether it is politically viable to initiate a reform and the risk factors to be addressed. What is the primary aim behind the reform or restructuring initiative?

If a key driver of restructuring is the need to demonstrate a different approach from a previous administration, then considering an organization-wide administrative reform or restructuring early in a new executive's term makes sense. Success is more likely if you can enact that restructuring early in a mandate, so aiming to complete it within the first two years of a mandate is wise. That is often not easy, and appropriate operational and political planning is needed, as well as members of your team that understand how your organization functions.

If however, functional needs, such as changes in mandates, or improved performance and efficiency are the main drivers, and particularly if it is later in an executive's term, it might be wiser to break the reform into select targeted initiatives. Is restructuring necessary, or can you achieve your functional aims through business process improvements, realignment of roles and resources without redrawing your organizational structure?

A further set of issues to consider are the veto points in your organization. It's important to identify obstacles and challengers in any change initiative, but particularly in intergovernmental organizations, the number of veto points are considerable and a sophisticated political strategy is needed to enact organizational level restructuring. Undertaking a thorough analysis of your veto points might also lead to the conclusion that selective and targeted performance or process improvement initiatives stand a greater chance of success.

For more information, please read:

Ryu, Lanhee et al., "The politics of government reorganizations: Evidence from 30 OECD countries, 1980-2014." Governance (2019), pp. 1-17 DOI: 10.11111/gove.12458