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Corporate Restructuring

Corporate restructuring involves radically rethinking a company's key business processes to focus on the customer, core competencies, and adaptability to changes. It requires dividing the organization into strategic business units focused on individual competencies. Processes are restructured by creating cross-functional, self-managed teams and closely tying activities to suppliers and customers. Restructuring also demands cultural changes to shift employee values, norms, attitudes and behaviors. Methods of restructuring include external actions like acquisitions or asset sales, and internal changes through portfolio analysis and new organizational structures to improve customer service.

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82 views8 pages

Corporate Restructuring

Corporate restructuring involves radically rethinking a company's key business processes to focus on the customer, core competencies, and adaptability to changes. It requires dividing the organization into strategic business units focused on individual competencies. Processes are restructured by creating cross-functional, self-managed teams and closely tying activities to suppliers and customers. Restructuring also demands cultural changes to shift employee values, norms, attitudes and behaviors. Methods of restructuring include external actions like acquisitions or asset sales, and internal changes through portfolio analysis and new organizational structures to improve customer service.

Uploaded by

Harin Lydia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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CORPORATE RESTRUCTURING

Concept of Corporate Restructuring


To survive and compete, present day
organization. should do away with their
existing culture, policies, structure and start
with a clean sheet.
They have to put more emphasis on the
business process as a whole and do everything
to keep the customer.

PROCESS OF RESTRUCTURING
1. CUSTOMER FOCUS:
To succeed in a highly competitive world, every
business will have to listen to the customer, find out
what he needs and deliver more than what he
expects.
2. CORE BUSINESS PROCESS:
The organization must divide itself into strategic
business units. Focusing on an individual core
competency. Then, it should divide the individual SBU
into core business processes by deciding what
product attributes, technologies, designs, skills etc
are most important from the customers point of
view.

Once the key processes are identified it is necessary to
decide which areas need to be restructured and order
in which they should be handled, since restructuring all
the process simultaneously is not possible.
3. STRUCTURAL CHANGES THROUGH
REEINGEERING:
This approach involves radical rethinking and
transformation of key business processes leading to
coordination and flexibility in responding to changes in
the environment.


There are 4 key elements in reengineering

Organization should define distinctive
competencies.
The organization should asses the core processes
that adds value to the distinctive competencies.
The organization should organize work around
processes rather than functions by creating cross-
functional, self managed teams.
It ties up the firms activities closely with suppliers
and customers.
4. CULTURAL CHANGES:
A strategic change often requires changing
the culture of an organization. A culture
change refers to a change in employees
values, norms, attitudes, beliefs and
behaviours

METHODS OF RESTRUCTURING
1. EXTERNAL RESTRUCTURTING:
Asset based restructuring is undertaken
through (i) acquisition/takeovers, mergers,
(ii)asset swaps
(iii)demerger/spin off
Capital restructuring is carried through
(i)leveraged buyouts
(ii)shared buybacks
(iii)Conversion of debt to equity

2. INTERNAL RESTRUCTURING:
This involves portfolio or organizational
restructuring.
Portfolio changes are effected after the SWOT
analysis of the company.
Organizational changes are adopted to ensure
better service to the customers.

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