The Three Forms Of Restructuring

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MGT5STR - Strategic Management ASSIGNMENT 2 “Critically explain the three forms of restructure. In your answer detail why firms restructure, giving a comprehensive example for each form. Provide an explanation of the errors firms should avoid when restructuring. You should include references to current strategic management academic journals and examples of competing firms.” What is restructuring? Restructuring is a process for corporate companies where in there are changes made in ownership, alliances, business mix and asset mix to make sure that the shareholders’ value is enhanced to the maximum. In today’s world, restructuring has become one largest processes that a company follows. Companies are competing with each other in to…show more content…
Induce Higher Earnings: The basic goals of a corporate restructuring include higher earnings and the creation of a corporate brand name / value. The brand name of a corporation is largely affected by the corporation’s ability to generate enough cash. Provide proactive Leadership: The style of the management influences the restructuring process in a great manner. The successful companies have clearly displayed their ability in great leadership styles in which a manager can related on a one-to-one basis with his employees. Leverage core competency: As the concept of organizational learning is gaining momentum, corporations are highly concentrating on exploiting the rise on the learning curve. This process can take place only when the corporations focus on their core competencies. This is also considered as the best way to provide the shareholders’ with increased profits. Ensure clarity in vision, strategy and structure: Corporate restructuring needs to focus on the concepts of vision, strategy and structure. Corporations need to be very distinct about their goals and the ambitions that they plan to achieve. A major emphasis needs to also be made on issues such as time the frame and the means that influence their success. Empowerment of Employees: Empowerment or handing over power is a major part of any restructuring process. Delegation of work and decentralized decision making provides corporations with effective
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