Corporate Restructure

b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

Is corporate reorganization an available option? If so, how should it be structured? What issues would be associated with this alternative?

To accomplish the goals outlined during the planning phase managers need to link employees, responsibilities, and resources together through organisation. Henri Fayol stated that “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”.

The corporate reorganization should be structured as a divisive “D” reorganization and the restructuring process should conform to section 355 of the tax law in order to minimize the tax consequences of the reorganization.

While it was foreseen that the company would initially take financial setbacks because of the reorganization, it was not believed that the financial risks would be drastic. However, the impending report that Mr. Elesser has to present to the board will detail a net income that will be nearly 26 million dollars in the red for 2004 (see exhibit 2)3. The blunt force restructuring met resistance on numerous fronts. First of all, the various components of the company did not operate under the same uniformed leadership objectives. Each division was set up to look out for their own interests and markets. When the restructuring plan that focused on a more centralized management process, many of the things that worked for one division did not necessarily work for other divisions of the company. This left some divisions at a severe disadvantage. Another obstacle that worked against the restructuring was the employee unions in which the company had to deal. The unions were not on board with the various downsizing and restructuring methods. In addition, the company had to deal with a couple of different unions which posed a problem with negotiating tactics. Benefit costs were also a significant investment that did not hold up well under the auspice of restructuring.

We must consider new ideas that will return us to financial health once again. Listed below are some examples of organization changes / structures that we should consider.

1. How does true "reengineering" differ from "reorganizing," "downsizing," and other concepts of organizational restructuring?

Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.

They also include certain changes in its financial position which could be due to different factors such as financial performance or raising debt.

In the cases analyzed, we might infer that during a period of economic difficulties companies had gone through deep discontinuity. As such, this determined the need for a turnaround to realign the companies’ strategies with the external and internal environment. These changes impacted the four companies analyzed previously.

The purpose of this report was to examine organization restructuring. Research for the report included literature based on organizational restructuring and the various processes involved in restructuring. The major findings indicate that the two methods commonly used for organizational restructuring to be downsizing and reengineering of business processes(Cummings & Worley, 2008). Downsizing assist the company to reduce its workforce, and this saves cost in terms of payroll reduction. Reengineering allows a company to change and adapt to the way it

Restructuring strategies that change corporate focus is a set of strategies, which lead to considerably different level of business scope and relatedness in the corporate portfolio over time (Zhao, Michalisin, & Stubbart, 2011).

economy. The immediate effects of the economic condition impact that causes physical damage in global dynamic’ ripples cascade seen around the world. There are several critical primary financial management experiences every organization must face in the wake of economic reporting such as financial planning capital budgeting and capital structure. Financial planning is probably the most dynamic of the process for a Chief Financial Officer to understand the company’s performance. All this is taking place, and an effective financial decision making requires an understanding of working goals of the organization. In other words, it relates the ability to raise funds and the ability to manage risk in buying productive assets. This is a global environment in which tomorrow’s CFOs will operate (). Focusing on approach to working compatibly within a changing environment as the organization redistributes its goal.

Reorganization is the process of extending the life of a company that is facing liquidation by restructuring it in order to carry out activities which minimizes reoccurrence of past situations. Type A reorganization involves consolidation and merging and it gives greater flexibility since there is no restrictions of voting stock. Nontaxable status is not affected by removal of unnecessary assets. Additionally, this type of reorganization saves on time as approval from shareholders, which often brings complexity can be avoided. In a type B, assets and contracts which cannot be transferred are not lost, there is no substantially all requisite and liabilities of target’s corporation are isolated in a subsidiary.

Finance Strategy and Transformation helps the clients in defining the role of finance to drive the strategic business imperatives. It assists the CFO to clearly articulate his Finance vision and strategy, analyse the performance of the finance function, and develop a future state operating model that is fit for purpose. This involves an across-the-board review of the finance function, matching performance to business requirements and diagnosing areas for improvement across the finance landscape.