Guide to Key elements of Organisational Restructuring
Keen to understand organisational restructuring and how this process can support the success of your business?
To help you determine whether an organisational restructure might be necessary for your company, the expert business solicitors here at Wilson Browne have explained below the different types of organisational restructuring and the key elements this process should include.
What is organisational restructuring?
Organisational restructuring (also known as corporate restructuring or operational restructuring) simply refers to an organisation making significant changes to its structure, business model, processes, or systems with a view to improving the business.
Why would an organisation restructure?
There are many reasons a company might choose to undergo an organisational restructure.
Often, however, organisational restructuring is required when a business is unable to pay its debt or can no longer sustain itself due to a changing business environment, like a pandemic or recession.
Alternatively, its products and services may be struggling to compete with rivals in the marketplace.
However, an organisation may also decide to restructure for more positive reasons. This can include a desire to upsize the company, change business direction, or a buyout has occurred and the buyer wishes to rebrand.
An organisational restructure can therefore present a great opportunity for improving the operational efficiency of a company, streamlining the business, and making it a more attractive prospect for customers, stakeholders, and potential buyers.
What are the different types of organisational restructuring?
To help you understand the purpose of organisational restructuring and whether this process is something your business should consider, we explore eight of the main organisational restructure types in more detail below.
Mergers and acquisitions
A merger and acquisition restructure refers to the company either merging with another organisation, acquiring another company, or being acquired by another company.
Legal restructuring
Legal restructuring covers any legal changes made to the organisational structure of the company, such as a change in ownership, legal business paperwork, or agreements.
Financial restructuring
Financial restructuring involves making significant changes to an organisation’s financial structure, often by renegotiating debt, closing unprofitable branches, or stopping production of unsuccessful product lines.
Repositioning
Repositioning focuses on altering your business model. This might mean you become a service provider instead of a manufacturer or you change approaches to target a different demographic.
Cost reduction
Also known as cost restructuring, this type of organisational restructure simply involves cutting costs, typically by making redundancies or downsizing.
Spin-off
A spin-off restructure refers to the creation of an independent company from the existing business. As the new entity will have its own shares, it can increase shareholder value.
Turnaround
A turnaround covers any substantial changes made to a company’s culture, products, services, or operations with a view to improving the way the business operates and realigning the current trajectory of the business with the company’s objectives.
Divestment
Divestment basically refers to the downsizing of a business where it sells one or more under-performing division, location, or subsidiary to focus its efforts on the more successful parts of the company.
What are the key elements of organisational restructuring?
Regardless of how you choose to restructure your organisation, each process should involve three core elements: planning, timing, and execution.
Planning
During the planning stage, a strong, realistic vision and clear leadership is essential to ensuring the restructure is carried out confidently and with a set focus from the outset.
Timing
Too many businesses leave restructuring until it’s too late. Cue, the importance of timing. Restructuring is only possible when you have the necessary resources and time to do so. As a result, having the foresight to pre-empt a restructuring strategy is often best.
Execution
Unfortunately, there’s no set template every organisation must follow when restructuring, so executing your plan can be the hardest part.
Fortunately, the expert team at Wilson Browne Solicitors can help you to plan, time, and execute even the trickiest of organisational restructures with tailored, professional guidance.
Receive professional guidance on organisational restructuring
Regardless of your exact reason for restructuring your organisation, you can rest assured that the award-winning team of company and commercial solicitors at Wilson Browne Solicitors will be on hand to help.
With the ability to identify and suggest effective solutions to alleviate a wide range of legal, commercial, and practical concerns during an organisational restructure, you can rely on our team to provide you with clear and pragmatic legal guidance.
We have years of experience supporting companies organisational restructuring strategies including those operating in the manufacturing, engineering, logistics, and medical industry. Instead of giving you a ready-made guide to organisational restructuring, we work with you to understand your business and provide tailored advice.
If you’d like to learn more about the way we work or the services we can provide for businesses undergoing an organisational restructure, please feel free to pay us a visit. We’ve opened Wilson Browne branches across the UK including locations like Corby, Kettering, Wellingborough, Higham Ferrers, Leicestershire, and Northamptonshire.
Alternatively, the first chat with our solicitors is always free, so please don’t hesitate to give us a call on 0800 088 6004. We also welcome enquiries submitted using our online contact form, so we hope to hear from you soon.