Clients typically rely on our corporate restructuring services if they experience deteriorating performance, have liquidity concerns, or have experienced the loss of key management or customers. In each case, we have the skills to manage international restructuring, whilst also expertly managing relations with trade unions and other labour representatives. We lead corporate boards and all other stakeholders through restructuring plans. These plans include downsizing, outsourcing, moving key functions to other countries and both the acquisition of businesses and their sale.
Reasons for Restructuring a Company – Bright Hub
There are several reasons you may have to reorganize the operations and other structures of the organization. Restructuring a company can improve efficiency, keep technology up to date, or implement strategic or governance changes made by, or mandated to, company owners. In today’s business environment, the only constant is change. Companies that refuse to change with the times face the risk of their product line becoming obsolete. Because of this, businesses experiment with new products, explore new markets, and reach out to new groups of customers on a continuous basis. Businesses seek to diversify into new areas to increase sales, optimize their capacity, and conversely shed off divisions that do not add much value, to concentrate on core competencies instead.
All such initiatives require restructuring. For instance, expansion to an overseas market may require changes in the staff profile to better connect with the international market, and changes in work policies and routines to ensure compliance with export regulations. Starting a new product line may require changes in the system of work, hiring new experts familiar in the business line and placing them in positions of authority, and other interventions. Hiving off unprofitable or unneeded business lines may require changes to retain specific components of such divisions that the main business may wish to retain.
Benefits of Restructuring a Company & Restructuring Process
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 to complete the company restructuring process can depend on whether the restructuring is reactionary, such as when bankruptcy proceedings require a company to make explicit changes within a specified period, or proactive, such as when a savvy business leader recognizes a change in consumer preferences and wants to position his or her company to be a leader in tomorrow’s market. Regardless of the reason for a company’s restructure, excellent planning is essential. Enlisting the guidance of a qualified professional at the planning stage is critical to ensure a successful restructure.
Concept and reasons of corporate restructuring – SlideShare
The concept of restructuring focuses on change . The oxford dictionary (2007) defines restructuring as ‘ giving a new structure , to rebuild/rearrange’. One can say that corporate restructuring is a structured decision making exercise undertaken to evaluate the current endowments of a co. by fine tuning the available skills, machinery ,& technology to meet the challenges of tomorrow. Restructuring is a corporate management term that stands for the act of partial dismantling or otherwise reorganizing a company to make it more efficient and therefore more profitable. It generally involves selling of portion of the company & making drastic staff reduction .restructuring is often undertaken as part of a takeover by another firm.
3. Corporate restructuring refers to a broad array of activities that expand or substantially modify its financial structure or bring about a significant change in its organizational structure or internal financing . (CHANDRA 2007) Corporate restructuring is the reorganization of a company to attain greater efficiency and adopt to new markets. Corporate restructuring refers to liquidating projects in some areas and redirecting assets to other existing or new areas. (Weston et al. 2005)
Organizational Restructuring: Reasons, Strategies & Benefits – WiseStep
Successful restructuring and reorganization of an organization requires good preparation in advance, good planning which will address all the programmatic needs, support services which are needed to advance those organizational goals, good planning of the workforce and brilliant communication skills. Organization leaders find it highly important to change how these units operate for a few reasons like changing priorities of units, enhancing effectiveness of organizations, addressing the budget reductions, initiating new programs etc. In this post we are going to discuss some of the reasons, strategies and benefits of organizational restructuring. Keep reading to find out more!
Reasons for Corporate Restructuring – LetsLearnFinance
orporate restructuring refers to the process where a company revamps the structure of company so that company turns profitable if it is a loss making company or become more profitable if it is a profit making company. Given below are some of the reasons due to which companies go for corporate restructuring –
Apart from increasing the profits other reason behind company going for restructuring is to make company more competitive as compared to other peers in industry.
If a company is highly leveraged than company go for debt equity restructuring in order to reduce the interest burden for the company.
Another reason behind restructuring is to reduce the cost of operations for the company so that company profit margin improves.
If a company is operating at below capacity than in order to utilize the excess capacities companies go for restructuring.
If a company is listed in stock market it feels that current market price does not justify true value for a company, and then also company will go for corporate restructuring so as to improve shareholders confidence in the company.
Another reason for corporate restructuring is when company is into too many businesses or over diversified; it may want to concentrate only on one business than corporate restructuring is the best way to solve that problem.