To cope with ever-changing market conditions, companies often have to reorganize. But leaders tend to get conflicting advice about when and how to do so.
Does the company need a new structure, or should it tweak the existing one?
Will the benefits of a reorganization outweigh the costs?
Can the work be accomplished before conditions change again?
How far should the changes go?
The Country at the Moment Is facing economic challenges due to the Current Pandemic
Businesses have Crashed!!!!
Organization Processes have Collapsed!!!!!!!
Restructuring and Re-organization is Urgently Needed
A key strategic issue for any company that is restructuring is the quality of employees who remain. Companies often lose their best people, who quickly find other opportunities rather than wait for the haphazard results of a typical reorganization.
Unfortunately, a company can be crippled following a downsizing if the wrong mix of employees remain. Indeed, scores of beleaguered companies seeking to reshape themselves have been damaged for years by focusing on reducing head count rather than on ensuring that the best qualified people staff the new organization.
Restructurings are never easy. When they are carried out with an eye toward reducing head count and expenses by some arbitrary percentages, employees invariably respond by trying to protect their own positions and security. Objective standards and strategic goals quickly fall by the wayside. But when a restructuring is driven by strategy, the company can emerge revitalized
In determining whether you need to scrap your existing organizational structure or modify it, two factors matter:
- The level of dynamism or turbulence of your industry
- The urgency of your need for a strategic reorientation.
When your company is facing major industry disruption, restructuring is necessary. As John Chambers, the executive chairman of Cisco, has said, true transformation can’t happen without radical, holistic change
Whether you are restructuring or re-engineering, the way you group and allocate activities and resources must play to your strengths and differentiate your company from competitors. That might seem obvious, but not all firms have the discipline to follow this guideline—or even understand which practices are most suited to their situation.
Structural change works best when it reinforces a company’s unique points of differentiation rather than attempts to mimic competitors’ strategies.
When a company restructures, many other aspects of the organization must change too.
These include management processes, IT systems, the culture, incentives and rewards, and leadership styles.
This has to happen quickly, if not simultaneously, especially in fast-moving markets. Restructurings that are conducted in isolation often result in misalignment that can paralyze the company.
WHY DO ORGANIZATIONS RESTRUCTURE?
Corporate restructuring can be driven by a need for change in the organizational structure or business model of a company, or it can be driven by the necessity to make financial adjustments to its assets and liabilities. Frequently, it involves both. Companies restructure for a variety of reasons:
- To reduce costs
- To concentrate on key products or accounts
- To incorporate new technology
- To make better use of talent
- To improve competitive advantage
- To spin off a subsidiary company
- To merge with another company
- To decrease or consolidate debt
BENEFITS OF RESTRUCTURING
Just as there are many reasons companies might restructure, there are many benefits of restructuring a company. Some benefits are financial, such as reviving a declining business, increasing a company’s value, and preparing it for sale or transfer to the next generation.
Other benefits involve gaining a competitive advantage, such as helping a company position itself for growth, allowing for the addition of new accounts or enabling expansion into other geographical areas.
Two words, however, sum up the overall benefits of corporate restructuring: Survival and Success.
The time it takes an Organization to restructure depends on whether the restructuring is Corrective, such as when financial Standings require a company to make drastic changes within a specified period, or proactive, such as when a management recognizes a change in consumer preferences and wants to position the organization in leading in future markets.
Regardless of the Circumstances for a company’s restructure; Adequate planning is Important
Engaging the guidance and Service of a qualified professional at the planning stage is critical to ensure a successful restructure.
Often companies do not allow enough time for planning and implementing the restructure.
Companies face many difficulties dealing with the frequent changes in today’s economy, and company restructuring can be a short and long-term answer to maintaining company viability.
Whether the reason for company restructuring is to save the business or strategically reposition itself for the future, Managements experts at Mecer Consulting Limited can help business owners deal with these challenging issues.
In the last two decades, we’ve endeavored to help organizations revive their companies and save them from total collapse
We have been in Organization Re-engineering and restructuring consulting for Close to 20 years, Our Custom made services have impacted Companies, Organizations and individuals Positively.
We have made Direct contact in Training and Other Business Consulting with over a 100,000 People with some of the finest staffs and consultants in the industry
Mecer Consulting Limited uses refined and tested processes to re-engineer and restructure organizations, we have some of the best change management personnel in the industry