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Restructuring

In: Business and Management

Submitted By jshamnani
Words 755
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Schumpeter’s says Capitalism as a process of “creative destruction” which is necessarily inherent in business activities in a market economy.
The basic nature of restructuring is a zero-sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation. Corporate debt restructuring is the reorganization of companies' outstanding liabilities.https://en.wikipedia.org/wiki/Restructuring
When change is not handled well, additional loss of jobs can occur. In addition, demoralization of the work force; increased worker turnover; decreased cooperation and teamwork; and increased levels of stress, anxiety, absenteeism, illness, and mistakes can follow. For example - Some have been economically dynamic but socially disintegrated; others have been equitable but stagnant; several are both stagnant and unintegrated.
Even as the economic outlook appears to brighten, the fact remains that many organisations can no longer operate as they had been. A key feature of this changing landscape is the need for organisations to restructure.
Here are seven broad restructuring principles to help make any restructure a successful one.
1. Align structure to strategy
All restructures must align to strategy. This may seem self-evident, yet a significant number of organisations fail to do so. For example, if local conditions are a predominant factor, then stress local sales and marketing functions rather than a centralised behemoth that then tries to matrix with local elements.
2. Reduce complexity
Simply put, complexity costs. Whether it is a complex organisational structure, a complex product offering or complex transactional processes, the added cost of complexity can be a drag on performance.
To mitigate complexity, there are three considerations that help with

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