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Organizational Restructuring

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Overview

Organizational restructuring refers to the shift in its existing procedures, reporting structures, management, hierarchy within and cross-functional departments. 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. Such an initiation is taken by top management and requires participation of employees at all levels.

Need for organizational restructuring arises when:

  • Departments have excessive or limited number of employees
  • Internal communication process is inconsistent and inefficient.
  • New initiatives taken by the top management which need changes in workflow and processes
  • Higher end objectives are being set
  • No measurable results seen among departments and employees
  • Performance levels are going down
  • Restructuring leads to a decrease in operational costs
  • Operational efficiency shows a considerable increase
  • Unnecessary layering of management gets eliminated, thereby, bringing in effective decision making and communication
  • Quality standards increase

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. 

 

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