The Korea Local Administration Review

This study set out to measure the degree of reorganization and test empirically a variety of factors influencing the degree based on survey data of local public enterprises in South Korea. Based on face-to-face interview data with personnel and finance staff members at local public enterprises collected in 2017 and 2018, this study analyzed factors influencing the degree of reorganization with an ordered logit model. Major influencing factors were set based on previous studies and included internal bureaucratic, external environmental, and head factors of local public enterprises.
Of internal bureaucratic characteristics of local public enterprises, the degree of the organization's centralization, level of red tape, and degree of organizational autonomy were deemed to have direct impacts on reorganization. The empirical analysis results show that the degree of reorganization was greater at organizations where red tapes were perceived to be more serious. Organizations usually make attempts at various innovations and changes in reaction to external environmental factors as well as their internal characteristics. The findings show that the bigger the environmental uncertainty was, the greater the degree of reorganization was. In the study, it was assumed that the head(leadership) factors would have effects on the reorganization of local public enterprises that were generally small in size and high in the level of external control. Although there were no differences in the degree of reorganization according to the past careers of heads, reorganization tended to be concentrated in the early days of their service.
Unlike previous empirical researches on reorganization that focused on government agencies, this study contributes to test the empirical research on factors influencing the reorganization of local public enterprises.