Catalog

	Table of Contents
p. 24 of 26 BACK | NEXT I. Introduction II. Changes in Development Environment and Agenda III. Themes for Organizational Effectiveness IV. Objective and Principles of Organizational Change V. Analysis of Options VI. Main Features of Organizational Change VII. Complementary Changes VIII. Challenges and Responses IX. Budget Implications and Implementation Plan X. Conclusions XI. Recommendations

Reorganization of the Asian Development Bank

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IX. Budget Implications and Implementation Plan

A. Budget Implications

99. The reorganization is broadly staff and budget neutral and is designed to maximize ADB’s effectiveness within the currently available resources.¹⁶ Efficiency gains are expected from the rationalization of functions and the reduction of transaction costs through:

1. integration of “programs” and “projects” into regional departments which will eliminate duplication and overlaps, streamline coordination and communication processes, and create significant strategic, functional and skills-related synergies, including with the RMs;

2. consolidating the functions related to maintaining ADB-wide policy coherence and technical excellence, and for safeguards compliance in one department which will streamline quality assurance and compliance processes, increase the efficiency and effectivity of internal checks and balances, and reduce the transaction costs associated with the current dispersion of these responsibilities across the institution; and

3. providing a more cohesive and better-consolidated knowledge management structure, which will result in more effective use of the important resources devoted to this area.

100. The above rationalization of functions will permit a more efficient allocation of staff resources. Staff currently assigned to operations front offices and programming functions will be moved to sector divisions. This will strengthen ADB’s front-line operational capacity through the mainstreaming of current coordination and support functions. Some staff positions relating to quality assurance and compliance will be consolidated in RSDD, while others will move to operations. The allocation of professional staff positions under the present and proposed organization structure is provided in Appendix 5. It should be noted that as the final staffing structure is determined through the budgetary process, the allocation for the new structure is only indicative.

101. However, the efficiency gains of reorganization are not a substitute for addressing ADB’s overall staff shortages. As argued in previous strategic and budget planning documents (i) the considerable expansion of ADB’s strategic and policy agenda, particularly the LTSF, (ii) the adoption of more programmatic and process-oriented approaches, and (iii) an increased focus on quality and safeguards, have dramatically increased the resource intensiveness and complexity of ADB operations. This has taken place in a severely constrained budget environment and led to extraordinary work pressures on staff. While the reorganization will rationalize staff allocation, the resource base will remain the same. This is not adequate to serve the expanded agenda.

102. In particular, regardless of the reorganization, ADB continues to face important resource gaps for meeting the requirements of existing priority strategies and policies. Many of the institution’s mandates still simply lack a critical mass of staff for effective implementation and delivery. Among others, this applies to private sector development, the governance action plan, environment sustainability, social development and safeguards, and regional cooperation. In addition, recently approved or expected new mandates over the 2001-2002 period (PSO and social protection strategies, performance-based allocation, and Libor-based loan products, for example) must be adequately resourced if they are to be implemented effectively. These and other staff requirement issues will be addressed in detail in the Work Program and Budget Framework (2002-2004) Paper and the 2002 Budget document.

B. Implementation Plan

103. It is intended that the reorganization becomes effective 1 January 2002. This implementation date is the most appropriate to maintain continuity of ADB operations. ADB’s financial year runs from 1 January to 31 December, and all operational cycles are geared to these dates. The first quarter of the year, for example, is the period of country programming missions as well as most loan fact-finding missions for the year’s program. In order to ensure a smooth transition, detailed planning and preparation will be needed on a number of fronts. Following Board approval of the proposals, such action will be initiated immediately.

104. In particular, following Board approval, staff will be informed of the process to be followed for new assignments. The basic principles to be followed will be to minimize disruption of the workflow as much as possible, and to maintain high staff morale.

105. Within the overall features of the reorganization presented above, there may be need for further minor adjustments and fine-tuning as implementation proceeds. These will be made by the Management in accordance with the overall structure presented here.

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