ORGANIZATIONAL RESTRUCTURING • A social unit of people that is structured and managed to meet a need or to pursue collective goals, is called an “Organization”. • Organizational Structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational goals.
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ORGANIZATIONAL RESTRUCTURING
•A social unit of people that is structured and managed to meet a need or to pursue collective goals, is called an “Organization”.
•Organizational Structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational goals.
• Organizations are a variant of clustered entities.
• An organization can be structured in many different ways, depending on their objectives.
• The structure of an organization will determine the modes in which it operates and performs.
ORGANIZATIONAL RESTRUCTURING
A visual schematic of Organizational Chart
ORGANIZATIONAL RESTRUCTURING
• A business organization makes changes in personnel and departments and change how workers and departments report to one another to meet market conditions.
• Some companies shift organizational structure to expand to serve growing markets & other companies reorganize downsize or eliminate departments to conserve overhead.
ORGANIZATIONAL RESTRUCTURING
• Organization restructuring happens when the reporting hierarchy of a company changes.
• After organization restructuring certain groups will report to different departments, and some departments may be newly created or disappear altogether.
ORGANIZATIONAL RESTRUCTURING
Causes of Organizational Restructuring
• Changing Strategy
• Changing Structural Types
• Downsizing
• Expanding
ORGANIZATIONAL RESTRUCTURING
Changing Strategy • Companies reorganize structure to
accommodate the market shifts.• Some companies create new divisions to
facilitate new products or product lines.• Some companies trim production staff due to
surplus production• Some companies increases sales staff to drive
sales.
ORGANIZATIONAL RESTRUCTURING
Changing Structural Types• Companies often rearrange business structure to
follow a new business model.• Some companies shift organizational structure to
a regional model to assign local managers.• Some companies create a matrix grid to place
the key managers over various departments and divisions.
ORGANIZATIONAL RESTRUCTURING
Downsizing• Companies commonly downsize to remain
functional during a loss of revenue.• Most companies will close departments, drop
product lines, lay off managers and sell facilities to keep a company afloat.
• Some companies reorganize business structure to meet the needs of the new organization at its smaller size
ORGANIZATIONAL RESTRUCTURING
Expanding• Corporate expansion demands the creation of
new departments to accommodate new products or new facilities.
• For any expansion companies has to rearrange business structure to include the new staff.
• Companies often make changes in the basic organizational structure for any expansion.
ORGANIZATIONAL RESTRUCTURING
Merger and Acquisition
• Merger and Acquisition refers to the process of acquiring a company at a price called the acquisition price or acquisition premium.
• The key principle behind M & A is to create shareholder value over and above that of the sum of the two companies.
• Two companies together are more valuable than two separate companies
Merger and Acquisition
Distinction between Mergers and Acquisitions
• When one company takes over another and clearly establish itself as the new owner, the purchase is called an acquisition.
• When two firms, often of the same size, agree to go forward as a single new company rather than remain separately owned and operated, this is referred to as a merger.