Restructuring involves significant modifications to a company’s debt, operations, or organizational structure. It aims to enhance the business’s financial stability and efficiency, especially when dealing with financial difficulties.
Types of Restructuring§
Financial Restructuring§
Financial restructuring refers to the reorganization of a company’s financial assets and liabilities. This often involves altering the terms of debt repayments or recapitalization.
Operational Restructuring§
Operational restructuring focuses on improving the internal processes, systems, and practices of a company. It may include cost-cutting measures, reorganization of workflows, or changes in management.
Organizational Restructuring§
Organizational restructuring involves changing the company’s structure, such as merging departments, altering the chain of command, or shifting the business model.
The Restructuring Process§
Assessment and Planning§
Implementation§
Monitoring and Adjustments§
Applicability and Benefits§
Comparisons with Related Terms§
Bankruptcy§
Insolvency§
Reorganization§
Examples of Restructuring§
Case Study: General Motors§
Case Study: IBM§
References§
Summary§
Restructuring aims to reorient the business in a more sustainable direction by altering its debt, operations, or organizational structure. Implemented effectively, it can lead to improved financial health and operational efficiency.
