Company restructuring: features and stages of implementation
Posted: Sun Dec 22, 2024 8:20 am
What are we talking about? Company restructuring is an internal transformation in financial and economic activity that does not affect the legal status and organizational and legal form. It consists of changing and improving the structure and (or) systems of the organization.
Why is it needed? Restructuring allows you to improve financial, production and economic performance indicators, as well as get rid of illiquid assets, optimize cash flows, reduce the tax burden and strengthen competitive positions.
In this article:
What is business restructuring and why is it needed?
Principles of company restructuring
Basic requirements for restructuring
Types of company singapore business mailing list restructuring
5 Ways to Restructure a Business
Methods of company restructuring
6 rules for restructuring an organization
Stages of developing a restructuring plan
Step-by-step implementation of company restructuring
4 typical mistakes in management accounting during restructuring
Risks of company restructuring
Evaluation of the effectiveness of restructuring
"Pitfalls" of the business restructuring procedure
Frequently Asked Questions about Company Restructuring
In-Depth Guide: How to Cut Your Ad Costs by 25% with Artificial Intelligence
Download for free
What is business restructuring and why is it needed?
Change is an integral part of a company's life. To remain competitive, a company must continually adapt to market demands.
This is not only an update of products and services, customer relations, but also a review of business processes, as well as the structure of the enterprise. A logical step in the evolution of business is reformation.
Restructuring a company is, in simple terms, a process of structural reorganization. The purpose of such a transformation is to ensure further development and achievement of the company's goals. This process takes into account both internal aspects and external factors that affect the performance of the business and its adaptation to changing conditions.
This procedure has many benefits, including:
profit growth;
reducing the risk of bankruptcy;
strengthening competitive positions;
the ability to make internal processes and financial flows more efficient;
a chance to get rid of unprofitable assets.
The reasons for making such changes can be varied, and the goals that the founders set for themselves can also differ. Restructuring a company affects established work processes, employee responsibilities, internal interactions and hierarchy. These changes can be perceived by the team as difficult and painful.
Restructuring is usually carried out to enable a company to better meet market conditions and operate more efficiently. This process can be either comprehensive, affecting all departments, or partial, affecting specific functions (for example, replacing an in-house legal department with an outsourcing agency).
What is business restructuring and why is it needed?
Source: shutterstock.com
Management may initiate restructuring in order to improve the company's investment attractiveness and increase its market value. This process is known as strategic restructuring.
It takes a significant amount of time due to the need to conduct a detailed audit and develop a comprehensive change plan that takes into account many factors.
When a company changes its size, it is usually accompanied by structural changes. Opening new offices, acquisitions or mergers with other organizations require adaptation of the organizational structure.
Scaling a company can include both expansion and reduction, which requires reform at different stages (sale of assets, division into independent divisions, reduction of the share of property).
Company restructuring is also used to improve business efficiency, but it is important to take into account that the legislation mainly considers this process as a way to solve financial problems (in particular, to pay off debts).
In addition, tax and judicial authorities may perceive this transaction as an attempt to withdraw assets or evade tax obligations.
Unlike reorganization, restructuring of a company does not lead to its liquidation.
Read also!
"9 Types of Customer Loyalty Programs"
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Principles of company restructuring
The restructuring of the company should be carried out taking into account the following principles:
Systematicity , which facilitates concentration on the main elements, establishing connections and comparing qualitative parameters.
A sequence that ensures the conduct of research using a specific technology, where each previous stage serves as the basis for the next.
Purposefulness , according to which all changes pursue a clearly defined goal that determines the choice and the order of decision-making.
Corporativity , which consists of the awareness of the set goals by all employees of the company and the unification of social, psychological and business interactions.
Conceptuality , according to which restructuring should have a single logical basis and be based on goals common to all structural units and management processes.
Stability and controllability , in which changes during the reformation must be planned in advance, controlled at each stage and have time limits.
One of the main principles of company restructuring is the division of assets and risks among different legal entities. That is, companies that own assets do not conduct business, while companies that trade do not own assets.
Why is it needed? Restructuring allows you to improve financial, production and economic performance indicators, as well as get rid of illiquid assets, optimize cash flows, reduce the tax burden and strengthen competitive positions.
In this article:
What is business restructuring and why is it needed?
Principles of company restructuring
Basic requirements for restructuring
Types of company singapore business mailing list restructuring
5 Ways to Restructure a Business
Methods of company restructuring
6 rules for restructuring an organization
Stages of developing a restructuring plan
Step-by-step implementation of company restructuring
4 typical mistakes in management accounting during restructuring
Risks of company restructuring
Evaluation of the effectiveness of restructuring
"Pitfalls" of the business restructuring procedure
Frequently Asked Questions about Company Restructuring
In-Depth Guide: How to Cut Your Ad Costs by 25% with Artificial Intelligence
Download for free
What is business restructuring and why is it needed?
Change is an integral part of a company's life. To remain competitive, a company must continually adapt to market demands.
This is not only an update of products and services, customer relations, but also a review of business processes, as well as the structure of the enterprise. A logical step in the evolution of business is reformation.
Restructuring a company is, in simple terms, a process of structural reorganization. The purpose of such a transformation is to ensure further development and achievement of the company's goals. This process takes into account both internal aspects and external factors that affect the performance of the business and its adaptation to changing conditions.
This procedure has many benefits, including:
profit growth;
reducing the risk of bankruptcy;
strengthening competitive positions;
the ability to make internal processes and financial flows more efficient;
a chance to get rid of unprofitable assets.
The reasons for making such changes can be varied, and the goals that the founders set for themselves can also differ. Restructuring a company affects established work processes, employee responsibilities, internal interactions and hierarchy. These changes can be perceived by the team as difficult and painful.
Restructuring is usually carried out to enable a company to better meet market conditions and operate more efficiently. This process can be either comprehensive, affecting all departments, or partial, affecting specific functions (for example, replacing an in-house legal department with an outsourcing agency).
What is business restructuring and why is it needed?
Source: shutterstock.com
Management may initiate restructuring in order to improve the company's investment attractiveness and increase its market value. This process is known as strategic restructuring.
It takes a significant amount of time due to the need to conduct a detailed audit and develop a comprehensive change plan that takes into account many factors.
When a company changes its size, it is usually accompanied by structural changes. Opening new offices, acquisitions or mergers with other organizations require adaptation of the organizational structure.
Scaling a company can include both expansion and reduction, which requires reform at different stages (sale of assets, division into independent divisions, reduction of the share of property).
Company restructuring is also used to improve business efficiency, but it is important to take into account that the legislation mainly considers this process as a way to solve financial problems (in particular, to pay off debts).
In addition, tax and judicial authorities may perceive this transaction as an attempt to withdraw assets or evade tax obligations.
Unlike reorganization, restructuring of a company does not lead to its liquidation.
Read also!
"9 Types of Customer Loyalty Programs"
Read more
Principles of company restructuring
The restructuring of the company should be carried out taking into account the following principles:
Systematicity , which facilitates concentration on the main elements, establishing connections and comparing qualitative parameters.
A sequence that ensures the conduct of research using a specific technology, where each previous stage serves as the basis for the next.
Purposefulness , according to which all changes pursue a clearly defined goal that determines the choice and the order of decision-making.
Corporativity , which consists of the awareness of the set goals by all employees of the company and the unification of social, psychological and business interactions.
Conceptuality , according to which restructuring should have a single logical basis and be based on goals common to all structural units and management processes.
Stability and controllability , in which changes during the reformation must be planned in advance, controlled at each stage and have time limits.
One of the main principles of company restructuring is the division of assets and risks among different legal entities. That is, companies that own assets do not conduct business, while companies that trade do not own assets.